Danish brewer Carlsberg will expand its Northampton site to offset half the capacity cut that will come from closing its operation in Leeds in 2011.
Under pressure to cut costs to stay competitive, the world's fourth-biggest brewer said a year ago it was to close its Tetley's brewery in 2011 and concentrate production in Britain at Northampton.
Carlsberg will expand annual capacity at Northamp
ton by a third to six million hectolitres by mid-2011, it said on Wednesday.
"The current capacity in Leeds is around three million hectolitres. So this means we in all take half of that out of the British market," said Kasper Madsen, head of supply chain at Carlsberg, adding the British market remained tough due to overcapacity and falling demand.
The net reduction of 1.5 million hectolitres is equal to 20 percent of Carlsberg's current capacity in Britain.
Madsen declined to say how much the Northampton brewery expansion would cost, but said investment levels were "normal, not on the high side". He also declined to specify costs of the Leeds closure.
Carlsberg, the fourth-biggest brewer in Britain, last month posted a rise in quarterly profit on the back of cost control. But sales fell more than expected and the company said it expected 2010 to be equally challenging.
Carlsberg generates roughly half of group sales and earnings in the mature western European market. Madsen said the Leeds closure and the Northampton investments were part of efficiency efforts throughout western Europe.
