InBev, is to close its Labatt's Toronto brewery by the end of the year, with repercussions for some 265 employees.

The brewery will cease major brewing operations on November 4.

InBev said Labatt's decision to close the Toronto brewery is based on excess capacity, particularly in Central Canada, and the competitive disadvantage which this creates.

About 265 employees will be affected by the closure and will be provided fair and equitable severance packages as well as support services.

As a result of the Toronto brewery closure, new investments will be made and jobs will be created at Labatt's London, Ont. Brewery, a statement said.

"All necessary steps will be taken to ensure that Toronto brewery production is transitioned to the rest of the brewery network before the closure takes place," the company added.

InBev expects total one-off costs related to the site closure, which has a capacity of 2.4m hectoliters, of €50m. About half of these expected one-off charges are non-cash costs. The total capital expenditure (CAPEX) needed for the relocation of production will be approximately €19m.

The EBITDA and EBIT benefits are expected to be €8m and €7m respectively for 2006 and €11m and €9m respectively for 2007.