… Heineken to close the Dunston brewery …
The Dunston brewery near Newcastle was acquired by Scottish & Newcastle (S&N) in 2004, with the purchase of the assets of the Northern Clubs Federation Brewery. All beer production – including Newcastle Brown Ale – was transferred to Dunston from the former Tyne brewery when it finally closed in 2005.
At the time of the acquisition, says Heineken, it was hoped that the amalgamation of the two sites would provide a sustainable, long term future for Dunston, but a significant downturn in the economy and the UK beer market has resulted in a surplus in brewing capacity in the industry.
S&N has carried out a detailed review of all its brewing sites and concluded that, for Dunston, closure is the most viable option going forward. As part of the review, Heineken is also proposing changes on other production sites, including Hereford, Tadcaster and Royal Brewery in Manchester – which probably mean just one thing: more job losses.
The Dunston brewery, which was built in 1978 and has a production capacity of 1.4 million hl, is currently running at around 60 percent capacity, according to Heineken.
Heineken, whose brands in the UK include Foster’s, John Smith’s and Kronenbourg 1664, has a 26 percent share of the UK market, where beer sales fell 6.2 per cent in the first half of 2009.
Last year Heineken paid over EUR 6 billion including debt for S&N.
In order to compensate for the decline in consumption, Heineken has put up beer prices to restore margins and added Amstel and Tiger beers to its regular UK portfolio. It has also managed to grow its cider volume by almost 4 percent on the strength of brands such as Strongbow, Bulmers Original and Bulmers Pear.
