The Danish Brewery Group is to close its Randers brewery in Denmark and transfer production of its Thor beer brand to its other breweries in århus and Faxe.
The company announced yesterday that it was in negotiations with the employees at Randers concerning the closure of the company. Some 150 employees are likely to be affected by the move.
DBG said that the decision to close the brewery and transfer production was meant to improve capacity utilisation, and that it would help boost the group's profits by DK15 million (€2m) a year from 2004. The closure will entail the write down of fixed assets of DK20 million and additional expenses of DK20 million.
"Against this background, the management of the Danish Brewery Group expects a profit before tax for 2003 in the range from DK210-235 million compared to the previous expectations of a profit of DK250-275 million," the company said in a statement.
Despite the closure of the brewery, the company insisted that the Thor brand would live on. "It is simply not commercially viable to maintain a separate brewery for the volume represented by the Thor products," said Poul Møller, managing director of DBG.
"But we guarantee that Thor Pilsner will continue to exist with exactly the same taste and quality as before. It should be possible to brew Thor beer in århus and to produce soft drinks at one of the other breweries of the Danish Brewery Group, but the final decision has not yet been made."
DBG owns five breweries including the one in Randers, and has been operating well under capacity for some time. The decision to close the Thor brewery rather than any of the others was taken because Thor was considered to be too cost-intensive to continue working at current capacity levels and too small to take on production from other breweries.
"The closedown [expected to be completed in the third quarter of 2003] is part of a general strategic plan of the Danish Brewery Group, which is now almost complete and which we expect to publish by the end of the month," said Møller. "However, we have decided to announce the above decision now because it affects so many people. It is a very unfortunate situation for the employees, but we believe that it is better for everybody to have as much warning as possible."
Møller added that the DBG management was open to alternative offers for the brewery, but that he did not expect to find a buyer for the site or indeed any other alternative to closure.
As well as its Albani, Ceres, Faxe, Maribo and Thor breweries in Denmark, the DBG owns the Lithuanian breweries Vilniaus Tauras and Kalnapilis. It is Denmark's second-largest brewery group behind Carlsberg, with 62 per cent of sales coming from international activities. It claims to be the leading Nordic beer exporter, selling its brands in more than 75 countries throughout the world.