South West brewery enters consultation with employees over possible job cuts

One of the South West’s largest breweries and pub chains has launched a consultation exercise with its employees over their jobs, with up to 40 posts at risk.

St Austell Brewery in Cornwall, which employs more than 2,000 people across the region, is blaming the Government’s introduction of increased National Insurance payments from next month.

This had come after it had already endured one of the most challenging periods in its 174-year history, it said.

The company, which owns Bath Ales, has placed some of its workforce into collective consultation and will be reviewing its operational structure.

In a letter to staff, chief executive Kevin Georgel said the company, among the South West’s largest private businesses, was having to take “difficult, but necessary steps” in order to secure its future success.

He stated that the “new employment costs inflicted by the Government will place significant additional financial strain” on the 174-year-old company.

The independent and family-owned business operates more than 160 pubs around the South West – including managed houses and tenancies.

It operates two breweries – in St Austell and Warmley, between Bristol and Bath – and with a network of six depots stretching from St Columb in Cornwall to Wimborne, Dorset, it is also a leading wholesale drinks distributor in the region.

Its top-selling beers include Tribute pale ale, Proper Job IPA and Korev lager.

Georgel said the business had this week communicated to its teams that it would be entering into a 30-day period of collective consultation.

“The process will involve us consulting with team members across multiple departments and may result in a reduction of up to 40 roles through redundancy,” he added.

“The brewing and hospitality sector has had an extraordinarily difficult few years – one of the most challenging periods in our 174-year history.

“We have successfully navigated these challenges, but they have been compounded by the significant increases in National Insurance announced in the Autumn Budget, which are effective from April.”

He said the additional cost of employment amounted to a further £3m a year. It was not realistic, nor appropriate, to presume that the business could pass on all the increased costs to its guests or customers.

“The decision to explore potential redundancies is not one that has been taken lightly. The proposed changes reflect a considered and measured response to the challenges we face and will help ensure that the business remains fit for the future,” he continued.

“We are, and we will continue to, invest significantly into the South West for the long term, developing our people, improving our pubs and positively evolving our brewing capabilities and brand portfolio.

“The company remains profitable and we are making good progress against our long-term strategic plans and are outperforming many of our peers.

“However, the financial headwinds we are facing, which have intensified as a result of the Autumn Budget, require us to take further action which involves reducing our fixed cost base to strengthen our resilience; it is a difficult, but necessary step to secure our future success.”

He said in order to continue to invest for the future, the firm needed to proactively manage and calibrate its costs to reflect the current market conditions.

“Our sole focus now is to work with our teams and support them during this difficult and unsettling period,” he added.

The firm’s managed pub teams are not included in the consultation process.