C&C to shut two plants with the loss of more than 260 jobs

Bulmers and Magners cider maker C&C plans to shut two of its plants with the loss of more than 260 jobs in a shake-up of the troubled business.

C&C signalled in its last financial statements that it was seeking to cut costs by €15 million a year and it has been reviewing its operations in Ireland and Britain since early last year.

Following this, it is understood that the group intends to close its water-bottling plant in Borrisoleigh, Co Tipperary, at which it employs 140 staff, and its cider-making facility in Shepton Mallet, in Somerset, England, where more than 120 people work.

C&C is likely to tell workers and their trade union representatives about these plans later this week. It will have to consult employees in the Republic for a month before going ahead with the closures, which sources say are scheduled for July.

Redeployment

Production will shift to its base in Clonmel, Co Tipperary, where an extra 80 jobs are expected to be created. It is not clear whether those losing their jobs in the other plants would be offered redeployment.

The company would not comment last night on its plans.

Some people will continue working at Borrisoleigh, which will remain as a warehouse and distribution centre. Its logistics operations are also likely to face changes.

C&C will continue to pulp fruit at the Shepton Mallet plant, but it will then ship the pulp to Clonmel, where all its cider will be produced. This indicates it will continue to buy apples from farmers in the area.

Its operation at Clonmel will produce Bulmers, Magners and Tipperary Water. It is understood there is no threat to Tennent Caledonian Breweries in Glasgow.

Speculation has been mounting about the future of C&C's various facilities since early 2015. One investor, New York- based Matt Fine, a manager with investment firm Third Avenue, suggested to shareholders last April that the group could sell Shepton Mallet.

C&C has been grappling with poor distribution and heavy competition in England and Wales for some time. In late 2014, it offered £1 billion for pub chain Spirit to help resolve this, but a deal never materialised.

This prompted the review that led to its decision to close both Shepton Mallet, where it is producing Blackthorn and Gaymers ciders, and the Tipperary Water plant, where volumes have fallen.

Drinks acquisition

The group acquired Borrisoleigh when it bought soft drinks maker M&J Gleeson in 2014 for €12.4 million. The latest figures showed that the Co Tipperary company was profitable before the takeover.

C&C's other production facility is the Vermont Hard Cider Company in the northeastern United States. The Irish company's purchase of this business in 2012 for $305 million has failed to deliver the growth that it originally predicted.

However, it signed a deal last month with US brewer Pabst to distribute and market all of C&C cider brands in the US.

C&C’s operating profits fell 9.5 per cent to €62.6 million in the six months to September 30th last, the first half of the drinks company’s financial year. Sales dipped 2.6 per cent to €358.6 million during the same period.

When it announced those results, chief executive Stephen Glancey warned that a number of factors would cut €10 million from its profits during the current financial year, which ends on March 31st.