Categorized | Beer, News

Carlsberg To expand In Northampton As Leeds Closes

To raise capacity by 1.5 mln hcl at remaining UK brewery

* Increase takes net UK capacity cut in 2011 to 1.5 mln hcl

* UK market still tough amid overcapacity, falling demand

COPENHAGEN, Dec 2 – Danish brewer Carlsberg (CARLb.CO) will expand its Northampton site to offset half the capacity cut that will come from closing its operation in Leeds in 2011 as it adjusts to a tough British market.

carlsberg

Under pressure to cut costs to stay competitive, the world’s fourth-biggest brewer said a year ago it was to close its Tetley’s brewery in 2011 and concentrate production in Britain at Northampton.

Carlsberg will expand annual capacity at Northampton, 100 km north of London, by a third to 6 million hectolitres by mid-2011, it said on Wednesday.

“The current capacity in Leeds is around 3 million hectolitres. So this means we in all take half of that out of the British market,” said Kasper Madsen, head of supply chain at Carlsberg, adding the British market remained tough due to overcapacity and falling demand.

The net reduction of 1.5 million hectolitres is equal to 20 percent of Carlsberg’s current capacity in Britain.

Madsen declined to say how much the Northampton brewery expansion would cost, but said investment levels were “normal, not on the high side”. He also declined to specify costs of the Leeds closure.

Carlsberg, the fourth-biggest brewer in Britain, last month posted a rise in quarterly profit on the back of cost control. But sales fell more than expected and the company said it expected 2010 to be equally challenging.

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