Scottish & Newcastle to close Dunston brewery

Scottish & Newcastle (S&N) has announced plans to close its Dunston brewery in Gateshead - which produces its Newcastle Brown Ale - by the middle of next year.

Heineken-owned S&N said it planned to transfer brewing to its John Smith plant in Tadcaster.

The 63 staff at Dunston were being consulted about the move, S&N said in a statement.

S&N said it "remained committed" to brewing Newcastle Brown Ale but the move to close the Dunston plant was inevitable in what was a "very weak" beer market.

Dunston was only operating at 60 per cent capacity, and there were issues with the brewery's "configuration and ability to adapt", said an S&N spokesman.

The situation did not suggest there was a decline in popularity of the Newcastle Brown Ale brand, the most popular bottled ale in the country, nor were staff at the brewery to blame, the spokesman added. "We would love to remain brewing the beer in the North East," he said, but it was no longer commercially viable.

"There has been an eight per cent decline in beer sales in what is a very weak market, plus there has been the impact of the beer duty increases," he said.

Newcastle Brown Ale has been brewed at Dunston since 2005, following the closure of the Tyne Brewery, where it was previously produced.

Asked whether S&N's new owners were behind the decision to close the Dunston site, the spokesman said the ownership issue was a "red herring".

The changes would have happened even if S&N had been an independent operation, he said.

Following a review of its brewing facilities changes were being proposed to the group's brewing operations in Hereford, Tadcaster and Manchester's Royal Brewery.

In the case of Hereford, S&N was in talks with union representatives but a spokesman for the brewer said 65 jobs would go in the long term.