InBev suspends 5% of local beer production

InBev Romania, the third largest beer producer on the Romanian market and producer of the Bergenbier brand, will suspend operations of its brewery in Blaj over the next six months and send 110 of the around 180-200 employees of the plant on technical unemployment. The Blaj-based plant produced over one hectolitres of beer last year, accounting for around 30% of the company's overall production, according to ZF estimates.

"The measure comes amid a decline in demand, and has been prompted both by the economic context and by seasonal factors," say representatives of InBev Romania, a company with 173 million euros in turnover. The malt production facility, located close to the plant, will, however, remain operational in the next six months.

This is the first major factory closure to be announced by a beer producer, with the beer market amounting to 1.6 billion euros in 2008, after beer sales fell by over 10% in the first half of this year, with July seeing the steepest decline in the past few years.

InBev Romania holds two plants on the Romanian market after in the autumn of 2007 it transferred the production capacity of the Baia Mare seasonal facility to the company's main facility near Ploiesti.

Currently, InBev's European assets, including those in Romania, are put up for sale.

Company representatives said employees sent on technical unemployment would receive everything they are entitled to under the legislation and under the collective labour agreement within the next six months, without specifying the value of salaries.

"In order to minimise effects on the other departments, we will resort, where possible, to personnel rotation. The main arguments in favour of this decision are avoiding redundancies, improving the supply-demand ratio and preserving InBev's competitive position on the market," said InBev representatives.

With InBev having secured its necessary stocks for the next few months, considered off-season months in the beer industry, this temporary closure of the Blaj plant is a means of cutting costs for the Blaj plant, which will also allow the company to cut prices. If it runs short on stocks, the beer producer has the option of importing from InBev plants in neighbouring countries.