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Newly Merged Molson, Carling to Close 7 Breweries

From Reuters

Molson Cos. and Carling O’Keefe Breweries said Wednesday that they will close seven of 16 breweries across Canada over the next three years after completing the proposed merger of their North American beer operations.

The companies, which became Canada’s No. 1 brewer under the merger announced last week, will eliminate 500 full-time jobs and slash their payroll by another 900 employees through attrition and early retirement incentives.

The merger and consolidation, coming at a time of flat consumer growth in Canada, is part of an effort to make greater headway into the competitive U.S. market.

“The new efficiencies will allow us to be more cost competitive in the U.S.,” Molson spokesman Barry Joslin said.

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The Toronto-based companies also announced that they will invest $186 million (220 Canadian dollars) to improve production efficiency and packaging capacity at the remaining nine breweries.

Molson and Carling, a unit of Australian-based conglomerate Elders IXL Ltd., announced the merger last week. They employ a total of 7,500 people.

Canada’s national beer companies were required to build breweries in all regions of the country because of provincial beer regulations which limit the distribution of beer to the province where it is made.

The savings “will be substantial,” Joslin said. “It will translate into higher earnings.”

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