Coors to shut down Memphis brewery

Modern Brewery Age, Feb 14, 2005

The new Molson Coors Brewing Co. has announced it will close the Coors brewery in Memphis, TN, in early 2007. The shutdown had been expected if the Coors/Molson merger went through, since existing Molson breweries could serve the eastern U.S. just as efficiently as the Memphis plant. The company expects to realize cost savings of up to $35 million each year from the closing.

Molson Coors said it will begin to wind down operations in Memphis during the second half of 2005. In a statement, the company said "plans for shifting production from Memphis to other brewing and packaging facilities and the sequence of the shutdown are being finalized."

"I thank the Memphis community and its leaders for their support of our company over the last 15 years," CEO Leo Kiely said. "Most important, I thank our employees in Memphis for their dedication and hard work. The beer business today is incredibly competitive and, unfortunately, tough decisions like this one must be made to compete and grow."

The Memphis brewery was built by the Joseph Schlitz Brewing Co. in the early 1970s. At the time, Schlitz was a brewing powerhouse, and was building new breweries all over the country. The Memphis brewery reached its production apogee in the mid-to-late 1970s, when it had annual capacity of over six million barrels.

The Memphis brewery came under the Stroh banner when that company acquired Schlitz in the early 1980s. During the last years of the Stroh Brewery Co., the brewery was sold to Coors very cheaply ("for just about nothing, five cents on the dollar," according to Bill Coors).

Coors Brewing Co. initially planned to use the brewery as a packaging center, and put more than $100 million into modernizing the packaging side of the brewery. Coors also invested in new equipment that would allow it to produce Zima at the plant.

For various arcane reasons, the Memphis brewery never met Coors Brewing Co. specifications to produce Coors beers for domestic sale, although the brewery did produce Coors Light for export.The company also used the brewery for production of the Blue Moon specialty beers, as well as the Zima and Keystone product lines.

Molson Coors reports that about 410 workers will be laid off due to the closure.