Lone Star Brewery to close this fall, Stroh announces

La Crosse Tribune, Jul 26, 1996 by Magney, Reid

The smallest brewery in the former G. Heileman Brewing Co. family of regional breweries San Antonio's Lone Star -- will close this fall, new owner Stroh Brewing Co. said Thursday.

The Lone Star Brewery, built in 1933, will cease production Sept. 27. About 170 of the brewery's 230 workers are expected to lose their jobs during the two month phase-out of the plant. Brewery workers were informed of the decision late Thursday.

Heileman brewed about 1 million barrels of beer in San Antonio last year, one-third of which carried the well-known Lone Star brand. In comparison, the La Crosse plant brewed 3.8 million barrels last year and has capacity for 10 million.

Production of Lone Star and other brands will shift to a Stroh facility in Longview, Texas, which has three times San Antonio's capacity, company officials said.

The Lone Star Brewery is the smallest of 10 breweries now owned by Stroh, which acquired live breweries in its takeover of Heileman July 1. Stroh considers it too small and inefficient to remain competitive, yet too big to function as a microbrewery, company officials said.

Upgrading the 63-year-old Lone Star Brewery would have taken more than $40 million, said William Henry, president and chief executive officer of Stroh.

"Although this decision to phase out brewing production in San Antonio has been difficult, the age of the brewery, coupled with excess brewing capacity in the United States and within our own brewery network, left us with no viable alternative," Henry said in a news release.

"In our environment there is excess capacity," said Lacy Logan, a Stroh spokeswoman. She added that when Lone Star and the other Heileman properties were acquired, the intent was to keep the breweries operating.

After searching for additional contract-brewing customers, Logan said: "Unfortunately that did not pan out." She said the status of Stroh's other breweries remains under review.

In a recent interview, Henry called the La Crosse brewery the most modern of all Stroh's facilities.

"It's a very modern, up-to-date plant," Henry said. "It's important to us. One of the advantages of putting the two companies together is to utilize capacities better."

Stroh, with headquarters in Detroit, is the fourth-largest brewer in the country and holds a 10 percent share of the market, close behind Coors, the nation's third-largest brewer.

The company will maintain a presence in San Antonio. The Buckhorn Museum and hospitality failities, which occupy almost one-third of the 32-acre brewery site, will remain open and its 25 employees will be retained. The museum attracts about 150,000 visitors a year. Also, a seven-employee field sales office will remain open.