Molson Coors has announced plans to cease production at its site in Irwindale, California, by September 2020.
The brewery – which opened in 1980 and employs approximately 470 people – produces brands such as Miller Lite, Coors Light, Miller High Life, Steel Reserve and several brands for Pabst.
According to Molson Coors, the Irwindale facility produced 4.8 million barrels in 2019, which it shipped to 261 independently owned distributors.
Meanwhile, Molson Coors’ subsidiary MillerCoors has entered into an agreement with Pabst Brewing, giving the Los-Angeles company the option to purchase the Irwindale facility for $150 million, including plant equipment and machinery.
Under the terms of the agreement, Pabst will have 120 days after receiving notice from MillerCoors of the Irwindale’s closure to finalise its decision to buy the brewery, according to a US SEC filing.
If Pabst goes forward with the purchase, both companies have reached a mutual agreement for a price of $150 million, subject to adjustments.
The SEC filing also states that the closing will be within six months from Pabst’s decision, but no earlier than 1 September 2020 and no later than 31 December 2020.
“This move will allow us to optimise our brewery footprint while streamlining our operations for greater efficiency across the network,” said chief integrated supply chain officer Brian Erhardt.
Erhardt added: “While it was a very difficult decision, we have extra capacity in our system and Irwindale’s production can be absorbed by other breweries in our network.”
The news follows Molson Coors’ recent announcement to revitalise and restructure the business after reporting weak third quarter results. However, the company said that ceasing production at the Irwindale facility is not part of the larger revitalisation plan and does not impact previously announced cost savings guidance.
Over the next nine months, products currently produced in Irwindale will be transitioned to other breweries, primarily Golden, Colo and Fort Worth, Texas.
© FoodBev Media Ltd 2019