Tadcaster to benefit as S&N reveals closure

SCOTTISH & Newcastle is to close its Reading brewery with the loss of up to 362 jobs and will move production to more competitive sites such as the John Smith's brewery at Tadcaster in North Yorkshire.

The UK's biggest brewer, which has agreed to a 7.8bn takeover by European rivals Heineken and Carlsberg, said the Reading site would close by early 2010.

S&N said the closure of the former Courage brewery was the most viable option going forward.

The group has already shut down a bottling plant at Reading with the loss of around 250 jobs and moved some of the production to the Tadcaster brewery in Yorkshire.

It has also shut two breweries in Newcastle and Edinburgh in order to cut costs.

Once the Reading brewery shuts the company will focus on just three breweries – Tadcaster, the Royal Brewery in Manchester and Dunston in Gateshead.

A spokesman for S&N said the Tadcaster brewery was safe from closure, and production would be moved up there over time.

"We can't speculate today whether more jobs will be created in Tadcaster, it will be part of the consultation. It's also too early to say what production will go where.

"We will be investing in Tadcaster, Manchester and Gateshead and there could well be an increase in jobs."

The group plans to spend 15m upgrading facilities at its three remaining breweries.

Tadcaster, which dates back over 200 years, currently employs around 300 people and is home to Yorkshire bitter John Smith's.

S&N said the closure of the Reading brewery would address a general over-capacity in the UK brewing sector and would save the group around 13m a year following a one-off cost of 22m.

Group operations director Stephen Glancey said: "The nature of the Reading site, the amount of investment required to make it competitive and its relative cost compared to other UK facilities means there is a strong business case for closure.

"We will, of course, do all we can to mitigate the effects of the closure on the people affected."

The closure of the 58-acre site will leave S&N, which also makes Foster's, Kronenbourg 1664 and Newcastle Brown Ale, with around 3,000 UK staff. It will begin talks with union officials in the next few days.

The company added: "S&N will work closely with local agencies to ensure that the impact on the local economy and community is minimised."

The Edinburgh-based group said its plans had been "shared with the Heineken and Carlsberg consortium as part of the due diligence".

Heineken and Carlsberg, which had their fourth approach for S&N finally approved by the S&N board last month, plan to break up the company when the deal is completed, with the UK business going to Heineken.

The Unite union said it was outraged by the announcement, saying that workers were still reeling from the effects of cuts announced by the company last year.

"There seems to be absolutely no rational reason for closing this brewery," said a spokesman.

Iain MacLean, national officer of Unite, said the union would fight the decision to close the brewery and it could not rule out industrial action.

"Management have failed to provide the union with a rational business case for this closure," he said.