Kompania Piwowarska reacts to decreasing demand
9 September 2009
Poznań, September 8th, 2009
Today the Management Board of Kompania Piwowarska started consultations with the Employee Council and trade unions about the intention to cease production in the Kielce Brewery and to introduce changes in the distribution networks, comprising closing down the distribution sections in the depots in Olsztyn, Toruń and Zielona Góra, as well as reducing the headcount in Kielce. The planned changes would result in the redundancy of approximately 190 Kompania Piwowarska's employees. New jobs will be created in Białystok, Poznań and Pruszcz Gdański.
Managing director's comment
Gary Haigh, managing director of Kompania Piwowarska, said: ‘This plan has come about as a result of economic reasons. From the beginning of the year, we have witnessed a sales decline in the whole beer category, including KP sales. While our market share is growing, this is because our competitors have been affected by sales declines even more than KP. We are expecting the beer market to keep slowing down and the companies that will be successful long-term are those that react quickest to this dramatic change in the environment to match their production capacity to the market needs and improve the efficiency of their manufacturing and distribution networks. These moves have been taken in this challenging context and will help to sustain our market leadership position in the Polish market."
Economic rationale of the restructuring
The decline in beer sales has resulted from the general economic slowdown (decreased personal consumption) and the significant price increase driven amongst other things by the recent dramatic rise excise tax. The decision to cease production in the Kielce brewery stems from Kompania Piwowarska's surplus production capacity. It would be too costly to maintain production capacity that will be redundant in a few years' time. On the other hand, lowering the load on machinery in the other breweries would result in non-economical usage if they are not operating at maximum capacity.
The Management Board's decision to close down three depots was based on an in-depth analysis of the whole supply chain, especially the depots' idiosyncrasies, the distribution of customers as part of the existing distribution infrastructure, the geographic distribution of supplies and possible extension of the storage area.
All laid-off employees will receive severance pay as laid out in the Group Layoff Act or the agreement currently in place at KP regarding vacating jobs owing to circumstances beyond the employer's control, depending on which of the two documents will offer more benefits to an employee. The severance pay will be calculated based on the employee's age and number of years of service. The agreement guarantees an equivalent of two weeks' remuneration for each year of service in the company as well as an age-related severance pay (if over 41 years). Moreover, all laid-off employees will receive annual bonuses for F10 in due proportion, as per KP policy. Kompania Piwowarska also guarantees to support employees in their search for new employment.
To the editor:
Kompania Piwowarska - leader of the Polish beer industry
Kompania Piwowarska is the largest brewer in Poland. Hundreds of years of experience in brewing, state-of-the-art technology and rigorous adherence to the World Class Manufacturing principles guarantee the highest quality beer. The company's product portfolio includes Tyskie - Poles' favorite beer, Żubr - the second largest Polish beer brand, Lech, Dębowe Mocne, Redd's, Wojak and international premium brands Pilsner Urquell, Peroni Nastro Azzurro and Miller Genuine Draft. Kompania Piwowarska was established in 1999 as a result of a merger of Tyskie Browary Książęce and Lech Browary Wielkopolski. In 2003 Dojlidy Brewery in Białystok was acquired by KP and in 2008 a brewery in Kielce. In the fiscal year F09, ended on 31 March 2009, KP sales volume amounted to 15.1 mill hectoliters.
SABMiller - one of the largest brewers in the world
Kompania Piwowarska is part of SABMiller plc. SABMiller plc is one of the world's largest brewers with brewing interests or distribution agreements across six continents. The group's wide portfolio of brands includes premium international beers such as Grolsch, Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as market-leading local brands such as Aquila, Castle, Miller Lite, Snow and Tyskie. SABMiller is also one of the largest Coca Cola bottlers outside the US. In the year ended on 31 March 2009 the group reported US$ 3.4 billion in adjusted pre-tax profit and group revenue of US$ 25.3 billion. SABMiller plc is listed on the London and Johannesburg stock exchanges.
Corporate Affairs Director, the company spokesman
KOMPANIA PIWOWARSKA SA
11 Szwajcarska St., 61-285 Poznań
Tel. +48 61 66 77 509
Fax +48 61 66 77 881
Cell phone +48 601 599 198
This SABMiller subsidiary news release has been translated from its local market language to English language for publication on www.sabmiller.com. We have attempted to provide an accurate translation of the original material but due to the difficulties of translation slight differences may exist.
Note, the news release was first published in its local market on 8th September, 2009.