Molson Coors Brewing Company today announced that the company will close its brewery in Memphis, Tennessee, in early 2007. The brewery employs 410 people.

The closure is among the initiatives that the company hopes will help it achieve the C$175m in cost synergies outlined when the Molson Coors merger was announced in July 2004.

A statement said the move is "consistent with the company's plans to structure its US and Canadian brewery network to optimise brewing and packaging operations, leverage the facilities' proximity to customers and reduce related distribution and overhead costs."

The newly-formed North American brewer said plans for shifting production from Memphis to other brewing and packaging facilities and the sequence of the shutdown are being finalised. However, the company expects a phase-out of the operation to begin during the second half of 2005. Cost savings are anticipated to be in the range of C$32-$35m annually when the closure is complete in early 2007.

In order to facilitate the changes, the company is expecting to invest between C$70 and C$90m in capital expenditures in its North American brewery network, along with restructuring and other costs that will be finalised nearer the closing of the Memphis facility.

"I thank the Memphis community and its leaders for their support of our company over the last 15 years. Most important, I thank our employees in Memphis for their dedication and hard work. The beer business today is incredibly competitive and, unfortunately, tough decisions like this one must be made to compete and grow," said Leo Kiely, chief executive officer of Molson Coors Brewing Company.

The company is providing resources to its Memphis employees to aid in their transition, including outplacement services, tuition reimbursement, and financial planning and retirement planning services.

The Molson Coors Memphis brewery employs approximately 410 people, and has a brewing capacity of approximately 3m barrels annually. It brews Coors Light for export, Zima XXX, Blue Moon and Keystone Light.