E-Malt.com News article: US, TN: City Brewing Co. agrees to buy former Coors brewery in Memphis

City Brewing Co. in La Crosse has signed an agreement to buy the former Coors brewery in Memphis, Tenn., La Crosse Tribune cited on March, 30 an announcement by the company and seller Chism Hardy Enterprises LLC.

The $30 million acquisition would provide a third brewery for City Brewing, which began in 1999 at the former G. Heileman Brewery in La Crosse. It bought the former Latrobe Brewing Co. brewery in Latrobe, Pa., in 2006.

The company’s La Crosse and Latrobe breweries make beer, flavored malt beverages, teas and energy drinks for other companies under contracts.

The acquisition of the Hardy Bottling Co. plant in Memphis offers City Brewing the ability to rapidly increase capacity for brewing, packaging and distribution for its existing customer base, and to expand to new customers and markets, company officials said.

Connie Michaels, vice president of human resources, said buying the Memphis brewery won’t affect recently announced plans to expand production in La Crosse, where $13 million in projects are planned over three years. It also won’t affect production at the Latrobe brewery, she said.

Michaels said the Memphis deal hinges on tax breaks that City Brewing will seek at a meeting of the Memphis-Shelby County Industrial Development Board.

Carolyn Hardy, who had been manager of the Coors brewery in Memphis, and other investors bought that facility in 2006. They shut down the brewing operation in favor of bottling nonalcoholic drinks, the Commercial Appeal newspaper in Memphis reported.

In March 2006, City Brewing said it might buy the Memphis brewery, which Coors had said would close. But two months later, it said the Memphis acquisition was off, after that brewery’s union membership rejected a City Brewing contract offer that would have paid them what La Crosse brewery employees receive.

The Memphis plant today has about 80 employees, and no union, Michaels said. City Brewing hopes to increase employment there to about 500 within five years, she said.

City Brewing today has about 535 employees at the La Crosse brewery and about 186 at the Latrobe brewery.

The company says it is the fourth-largest brewer in the nation, and is the largest dedicated contract manufacturer of brewed products in North America. It has more than 6 million barrels of annual brewing capacity between its La Crosse and Latrobe breweries, and that would increase to more than 10 million barrels with the Memphis acquisition. There are 31 gallons in a barrel.

“It’s intriguing,” said Benj Steinman, editor and publisher of the Beer Marketer’s Insights newsletter. “It suggests that City Brewing has more capital at its disposal than I realized.” It appeared earlier that Pennsylvania-based brewer D.G. Yuengling & Son would buy the Memphis plant for a lower price, Steinman said.


30 March, 2011