USA: The board of directors of Molson Coors Brewing Company announced on February 11 that the company will close its brewery in Memphis, Tennessee, in early 2007.

The closure is among the initiatives that are expected to achieve the $175 million in cost synergies outlined when the Molson Coors merger was announced in July 2004. It is consistent with the company's plans to structure its U.S. and Canadian brewery network to optimize brewing and packaging operations, leverage the facilities' proximity to customers and reduce related distribution and overhead costs.

Plans for shifting production from Memphis to other brewing and packaging facilities and the sequence of the shutdown are being finalized. However, the company expects a phase-out of the operation to begin during the second half of 2005. Cost savings are anticipated to be in the range of $32-$35 million annually when the closure is complete in early 2007. To effect this change, the company will invest $70-$90 million in capital expenditures in its North American brewery network, along with restructuring and other costs that will be finalized nearer the closing of the Memphis facility.

"I thank the Memphis community and its leaders for their support of our company over the last 15 years. Most important, I thank our employees in Memphis for their dedication and hard work. The beer business today is incredibly competitive and, unfortunately, tough decisions like this one must be made to compete and grow," said Leo Kiely, chief executive officer of Molson Coors Brewing Company.

The company is providing resources to its Memphis employees to aid in their transition, including outplacement services, tuition reimbursement, and financial planning and retirement planning services.

The Molson Coors Memphis brewery employs approximately 410 people, and has a brewing capacity of approximately 3 million barrels annually. It brews Coors Light for export, Zima XXX, Blue Moon and Keystone Light.

Molson Coors Brewing Company is the fifth-largest brewer in the world. It sells its products in North America, Europe, Latin America and Asia. Molson Coors is the third-largest brewer in the U.S., the second largest in the U.K. and the leading brewer in Canada. The company's brands include Coors Light, Molson Canadian, Carling, Kaiser, Coors, Killian's Irish Red and Zima XXX.

12 February, 2005