Molson Coors to close UK brewery
Overcapacity looms with loss of Heineken contract
The repercussions are beginning to be felt for Molson Coors’ British brewing network with the imminent loss of contract brewing volumes for Heineken UK.
The company announced at the end of November to its workforce at the Manor Park brewery in Alton, Hampshire that it plans to close the brewery at the end of May 2015.
It is now entering into a period of collective consultation with employees at the site, to identify alternative proposals for the site and to mitigate job losses. The consultation involves 108 employees.
Molson Coors added that to date it has been unable to find alternative replacement volume. According to a company spokesperson, for the past seven years production on behalf of Heineken has equated to 75% of Manor Park’s production. The balance has been comprised of Molson Coors’ brands – namely Carling, Grolsch and Coors Light.
Manor Park has an annual capacity of 2.6 million hectolitres and has been running close to maximum capacity in recent years. It has been a keg beer only brewery.
Molson Coors has been aware of a looming overcapacity issue across its three industrial scale breweries, in Burton-on-Trent and in Tadcaster, North Yorkshire, following notification from Heineken that it intended to terminate its contract brewing arrangement with the expiration of the current agreement in April 2015.
Total volumes that have been brewed on behalf of Heineken are estimated at between two and three million barrels annually. In advance of the end of the contract brewing agreement, the Dutch brewer has been investing to modernise and expand Royal, its brewery in south Manchester.
Molson Coors is currently completing a five-year, £75 million redevelopment of the Burton Brewery. The last year’s work concerns modernisation of the fermentation and filtration functions in the north brewery. These projects follow on from a £21 million investment in a high-speed KHS supplied bottling line.
In contrast, recent investment at both Alton and Tadcaster has been minimal. Asked if Tadcaster was to begin a similar consultation process, the Molson Coors spokesperson commented, “Tadcaster continues to operate as business as usual.”