E-Malt.com News article: Poland: Brewer Kompania Piwowarska to suspend two production lines and to reorganize one distribution centre

Kompania Piwowarska, SABMiller’s Polish subsidiary, has decided to suspend two production lines and to reorganize one distribution centre in order to reduce costs, SABMiller’s official website informed on February, 26.

Despite good results in sales in the previous year, Kompania Piwowarska is already experiencing and reacting to the effects of the global crisis. The analysis of present situation, threats, market trends and prospects for future actions shows that the slowdown in the brewing market will continue. The expected lower sales are a result of a worse financial situation of the customers and increased financing difficulties of our distributors. Moreover, the current weakening of the rate of zloty will increase the costs of operating, and the introduction (March 1, 2009) of a drastic increase in the excise, as much as 13.6%, will cause higher beer prices, the brewer said.

All of those factors negatively impact the company and make the future less foreseeable, which requires the company to be more flexible in order to react and adjust to the new circumstances. As a result, the parent company expects that the surplus of Kompania Piwowarska's production capacity will reach 2 million hectoliters or more in 2009.

After an analysis of the present economic situation and the prospects for change in the Polish market, Kompania Piwowarska has made decisions aiming to secure overall work spaces and reduce operating costs in the long run. It has been decided to reduce production capacity by suspending operations of two bottling lines with highest production costs within the whole KP, which are located in Kielce and to reorganize labor in the Opole distribution centre. As a result of those decisions, contracts with over 70 workers of the brewery in Kielce will be terminated, as well as with over 10 distribution workers in Opole.

In accordance with the law, the employer has begun consultations with workers unions and will cooperate with them during the whole process of changes planned to last until the end of March 2009.

Kompania Piwowarska is the largest brewing company in Poland. In fiscal year ended March 31, 2008 KP's sales reached 14.5 million hectolitres of beer.


27 February, 2009