Scottish & Newcastle (S&N), the UK brewer being taken over by Carlsberg and Heineken in a £7.8 billion deal last month, is to close its Berkshire Brewery by 2010 to save £13 million a year. Almost 400 jobs will go.

The closure of the brewery, which employs 362 staff on the outskirts of Reading, Berkshire, mainly producing Foster’s and Kronenbourg 1664, will cost £22 million but is expected to save £13 million a year. The 58-acre brewery was built in 1979.

Last November S&N closed bottling facilities at the site and transfered three million hectolitres of production to Coors Brewers, resulting in 250 job losses. It has already closed other sites in England and Scotland in recent years in an attempt to cut costs.

The remaining brewing and packaging operations at Berkshire will be moved to other sites, including Tadcaster, North Yorkshire, the Royal Brewery, in Manchester, and Dunston, in Gateshead.

Stephen Glancey, the group operations director of S&N, said: "It is well documented that there is general overcapacity in the UK brewing sector and these proposals have been put in place to address this issue.”

Briefings with brewery staff and union reprsentatives began this morning.

Although the company said that it would try to relocate staff, most employees are expected to lose their jobs.

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