UK: Wells & Young's to cut jobs after Corona Extra loss
Wells & Young's will be forced to cut jobs as a result of losing the rights to Corona Extra and Red Stripe lagers in the UK.
The beer venture between Charles Wells and Young & Co's Brewery conceded in its half-year statement today (25 November) that the contract losses were "disappointing". The group did not detail the number of jobs expected to go, but said: "This will have an impact on Wells & Young's in terms of overhead costs, the size of the company and, regrettably, its people."
The chairman of Wells and Young's, Paul Wells, previously told just-drinks that job losses were possible following the change. Diageo will take back Red Stripe in early 2011, while Grupo Modelo has assigned its Corona Extra to Molson Coors after a 15-year partnership in the UK with Wells & Young's.
The loss of the brands overshadowed a strong performance for Wells & Young's in the 26 weeks to 27 September. Net sales rose by 1.5% and pre-tax profits rose by 18% on the same period of last year.
Young & Co, with owns 40% of Wells & Young's, said that the loss of Corona and Red Stripe in early 2011 will not damage the beer venture's profits for its full-year. "Beyond that, we are confident that Wells & Young's management will respond in such a way so as to minimise any profit shortfall."
The group owns Young's and Charles Wells ale brands and also holds the UK licences for Kirin Ichiban and Estrella Damm.
Young & Co, which counts pubs as its core business, today reported net sales up by 0.7% to GBP67.7m (US$106.7m) for the half-year. Net profits soared by 73% to GBP14.6m due to tax gains. Pre-tax profits increased by 4% to GBP11.9m.
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