UK: Interbrew to close Boddingtons Brewery

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Interbrew UK is to close the Boddingtons Brewery in Manchester with the loss of approximately 55 jobs. The move is part of a restructuring of the company's ale production operations.

The reorganisation is a result of a number of factors, Interbrew said today, including: the need to review production facilities for Draught Bass as the contract with Coors Brewers expires in February 2005; the continued decline in volume sales of cask ales; and the requirement to improve production and distribution efficiencies in a highly competitive marketplace.

Interbrew UK said it will retain production of its two major cask ale brands - Boddingtons and Draught Bass - in their respective Manchester and Burton-upon-Trent heartlands, but intends to close the Boddingtons Brewery in Manchester as the existing arrangements for production at the city centre site are no longer viable.

The company is seeking to retain Boddingtons cask production in the Manchester area and will be talking to a number of regional brewers. The preferred option is to transfer production of Boddingtons cask ale to Manchester-based Hydes Brewery, Interbrew said.

Production of cask Draught Bass will move to Wolverhampton & Dudley Breweries' Marston's Brewery in Burton-upon-Trent in March 2005 when the current contract with Burton-based Coors Brewers expires. Interbrew UK already has existing arrangements with Marston's to bottle Draught Bass.

Interbrew UK is intending to transfer brewing of all non-cask ales currently produced at Boddingtons to its breweries in Samlesbury in Lancashire, Magor in South Wales and the Tennent Caledonian Breweries' Wellpark brewery in Glasgow. These non-cask ales which include Boddingtons nitrokeg and Gold Label Strong Ale account for 90% of the production output at Boddingtons.

The company plans to discuss options for production of two other cask ales produced at Boddingtons Brewery - Flowers Original and Flowers IPA - with southern-based regional brewers.

In a statement, Steve Cahillane, chief executive of Interbrew UK and Ireland, said: "To reach this position on Boddingtons Brewery has been extremely difficult, particularly because of the tremendous commitment shown by all of the employees at the brewery. Following the agreement to retain both cask and non-cask production of Boddingtons at the site two years ago, every effort has been made by employees and Interbrew UK to improve efficiency and viability of Boddingtons Brewery. With the support of the workforce at the brewery, efficiencies have been achieved and the marketing investment behind Boddingtons has helped slow the decline in sales of cask Boddingtons.

 "But in a competitive environment it is not sustainable to continue brewing non-cask ales at Boddingtons and transport them to our other brewery sites for packaging when we have the production capacity available at our other UK breweries. Cask ales only account for 10% of the production output at Boddingtons Brewery and the fact remains that the cask ale category has been declining and the cask market remains tough. As a result, the existing arrangements for production at Boddingtons Brewery are not viable.

"We have considered the option of contract brewing for other brewers at the site, but there is already over-capacity in the industry in terms of cask ale production; and we have also considered sale of the site with new owner (sic) being given contract to brew Boddingtons, but the cost of maintaining and improving the site is likely to prove as prohibitive for a potential buyer as it is for Interbrew UK. It is, therefore, unlikely that we would find a suitable buyer."

"We remain committed to retaining and supporting our ale portfolio and that commitment is not diminished as a result of our intention to move production of our ales to other brewery sites.  Indeed, in reaching the conclusion that it is necessary to relocate production, we are seeking to ensure that both Boddingtons and Draught Bass cask ales continued to be brewed within their respective heartlands." 

Following consultations, should a decision be taken to close the Boddingtons Brewery, the plan would be to cease production by the end of February 2005. Should these circumstances arise, the company said, it will offer all possible support including full job search support, both elsewhere within Interbrew UK and outside the company, and provide counselling service for all of those who are affected.

Sectors: Beer & cider

Companies: Anheuser-Busch InBev

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