POLAND: SABMiller brewer Piwowarska to cut jobs

Poland's largest brewer and SABMiller subsidiary, Kompania Piwowarska, plans to cut more than 80 jobs as the economic downturn hits beer market growth in the country.

Piwowarska said this week that it intended to terminate the contracts of more a than 70 employees at its Kielce brewery and more than a dozen at its Opole distribution centre.

The brewer said it had made the decision after "having analysed the current economic situation and the prospects of change in the Polish beer market".

Jobs will be lost at Piwowarska as part of a plan to reduce beer production. "It has been agreed that our production capacity will be reduced through the suspension of the operation of two packaging lines at the Kielce brewery," said the brewer, adding that these lines are the most costly to run throughout the business.

Poland's gross domestic product is expected to decline by 5.6% in 2009, according to a European Commission estimate.

SABMiller said in January that its organic beer volumes in Poland rose by 2% for the nine months ended 31 December, but Piwowarska said this week that it has seen a deterioration in growth in recent months.

"The slowdown in the beer market in Poland will certainly persist," said the group, which owns the Tyskie beer brand.

It said it expected beer volumes to flatten, due to lower consumer spending power and financial problems for its distributors. It added that a weakening exchange rate will increase costs and that a near-14% tax rise on beer, set to be implemented on 1 March, will mean higher prices.

Piwowarska has opened a consultation on the job losses with labour unions and hopes to finalise the cuts by the end of March.