S&N announces UK plant closure

By Neil Merrett

- Last updated on GMT

Related tags England

Brewer Scottish & Newcastle (S&N) expects to close its
Berkshire Brewery in England by 2010, in a bid to organise its
production capabilities within the UK market to drive cost
efficiency improvements, the company said.

Back in November, S&N announced that it would be scaling down its operations at the site situated near London. However, following further review, the company says that a complete closure of the plant was now the most "viable"​ action it could take to improve competitiveness within the country. The company said it therefore expected to generate annual cost savings of about £13m from the scheme. The company's original restructuring plans were put in place as part of the UK-based brewer's bid to fight off takeover talks from Carlsberg and Heineken. With these talks now taking place, S&N's operations director Steven Glancy said the closure plan remains vital to safeguarding the future of the operations in the country. "It is well documented that there is general over capacity in theUKbrewing sector, and these proposals have been put in place to address this issue,"​ he stated. "The nature of theReadingsite, the amount of investment required to make it competitive and its relative cost compared to otherUKfacilities means that there is a strong business case for closure."​ The current production output of 6mn hectolitres and the respective packaging work from the Berkshire plant, will be transferred progressively to S&N's other UK breweries. These sites include Tadcaster in Yorkshire, The Royal Brewery in Manchester and the Dunston plant in Gateshead. S&N said that talks with all employees affected by the closure would start today, with union discussions also set to kick off this week. After months of resisting, S&N last month agreed to open talks with a consortium formed by Carlsberg and Heineken over an 800 pence per share deal to buy and split its operations. If the talks succeed, Heineken would gain S&N's UK, Irish, Portuguese, Finnish, Belgian, US and Indian operations as part of the agreement, while Carlsberg would take full ownership of the profitable Baltic Beverages Holding (BBH) segment.

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