SCOTTISH & Newcastle yesterday revealed that it is to close another major brewery with the potential loss of 362 jobs.
The Reading site is the third UK brewery that S&N – which is due to be taken over by European rivals Heineken and Carlsberg for £7.8 billion in April – has closed in recent years.
The shutdown, due to be completed by early 2010, will transfer brew
ing and packaging to S&N's three remaining UK breweries: Tadcaster in Yorkshire, the Royal Brewery in Manchester and Dunston in Gateshead.
Stephen Glancey, S&N's operations director, said: "It is well documented that there is general over-capacity in the UK brewing sector, and these proposals have been put in place to address this issue.
"The nature of the Reading site, the amount of investment required to make it competitive and its relative cost compared to other UK facilities mean that there is a strong business case for closure."
S&N's Berkshire Brewery, by the M4 on the outskirts of Reading, covers 58 acres and has an annual output of six million hectolitres. Its key brands are Foster's and Kronenbourg 1664.
S&N said the closure plans had been "shared" with Dutch brewer Heineken and Carlsberg of Denmark as part of the consortium's due diligence during its takeover offer for the Scottish brewer.
As part of the takeover, Heineken will take control of S&N's UK operations, making it the biggest brewer in the UK with a market share of about 26 per cent.
S&N said yesterday that, if fully implemented, the closure would yield annual savings of £13 million. It will involve a one-off cost of £22m.
The Fountain Brewery in Fountainbridge, Edinburgh, was closed in February 2004, and the Tyne brewery in Newcastle was closed in April 2005.
One S&N insider said yesterday: "Everybody knows the UK brewing industry has too much capacity. In recent years S&N has been shutting breweries where there is this problem and opening them in growing markets. For instance, we sold our Champigneulles brewery in France in 2006 and transferred production to Obernai near Strasbourg."
Unions were up in arms about yesterday's death-knell for Reading, and suggested the possibility of strikes.
Iain MacLean, national officer of Unite, said: "Our members are still reeling from the effects of a major outsourcing deal which Coors announced in December. At this point we cannot rule out industrial action. Management have failed to provide the union with a rational business case for this closure."
The Reading shutdown announcement follows the closure of bottling facilities on the site in November last year, and the transfer of three million hectolitres of production to Coors Brewers under a contract brewing agreement.
The full article contains 459 words and appears in The Scotsman newspaper.
