Scottish & Newcastle Reading brewery to close

Scottish & Newcastle (S&N), the UK’s largest brewer, has announced it is to close its brewery near Reading by early 2010 and is to move production to more competitive sites.

The 23-hectare brewery site is located near Junction 11 of the M4 motorway, employs 362 people mainly producing Foster’s and Kronenbourg 1664. Current annual output of 6 million hectolitres is 20% below capacity.

The closure will lead to annual savings of £13 million at a one-off cost of £22 million. The brewer said it will spend £15 million upgrading facilities at sites taking on work from Reading.

Stephen Glancey, group operations director, said it is well documented that there is general over-capacity in the UK brewing sector and these proposals have been put in place to deal with this issue.

S&N said the move to close the site follows its announcement in November of the closure of bottling facilities at the site and the transfer of 3 million hectolitres of production to Coors Brewers Ltd, under a contract-brewing agreement.

As well as Foster’s and Kronenbourg 1664, S&N’s well-known brands are Strongbow, which makes up for more than 3 in every 5 pints of cider sold in the UK and Australian lager, Foster’s, and Britain’s number one ale brand, John Smith’s.

S&N was recently the subject of a £7.8 billion takeover deal which saw the group divided between Carlsberg and Heineken, with Heineken adopting much of its European operation and Carlsberg enjoying the benefit of a 100% holding in key asset BBH, the Baltic regional brewery giant, which was one of the major bargaining tools available to Scottish & Newcastle throughout the discussions.

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