THE decision to move production of iconic Newcastle Brown Ale from Tyneside to Yorkshire was described last night as "totally unacceptable".
Scottish and Newcastle (S&N) sparked fury yesterday when it announced plans to close its brewery in Dunston, Gateshead next year with the loss of 63 jobs, signaling an end to centuries of large-scale brewing on Tyneside.
Union leaders and politicians vowed to do all they can to make S&N, which is owned by Dutch brewing giant Heineken, reverse the controversial decision.
Under the plans announced to staff yesterday morning, production of Newcastle Brown Ale will move to the firm’s John Smith’s plant in Tadcaster, West Yorkshire. The Ale – nicknamed Dog – has been brewed in Dunston since 2005 when the former Tyne brewery closed.
Following that move, S&N successfully had a European Protected Geographical Indication Order, which meant Brown Ale could only be brewed in Newcastle, revoked. But at the time the firm insisted: "This isn’t the trigger to move abroad. We chose to keep Newcastle Brown in the North East and that will stay."
S&N said yesterday it had hoped the amalgamation of the two sites would provide a "sustainable and long-term future for Dunston" but it blamed a "significant downturn in the economy and the UK beer market" for the U-turn. A spokesman said the site’s future had been subject to review over recent months.
The firm also confirmed it would be dropping the S&N name from its brewing operations in November, renaming the business Heineken UK. S&N will live on only as a pub leasing company.
Paul Hoffman, S&N operations director, said it was a "sad day" but insisted the decision had "not been taken lightly".
"Nor it is a reflection on the employees at the site who have done an excellent job over the past few years in a very challenging market," he added.
"Falling beer sales have created general over capacity in the UK brewing sector and rising input costs have put unprecedented pressure on our business.
"These proposals are designed to address these challenges and to ensure that we remain competitive in the future. The Dunston site is currently running at around 60% capacity and our ability to consolidate beer production on to other sites presents a strong case for closure." He said the firm would discuss the future of the site itself next year.
Jeff Tate, regional officer for the Unite union, said it would fight any compulsory redundancies imposed as a result of the closure.
He said the Dunston site had been gradually downgraded over the past four years, with its bottling, canning and then kegging facilities closing.
"It seemed that each day the staff attended work there was something new that was not good for the wellbeing of the brewery so I can well imagine that many had envisaged the closure," he said. "There has been lots of talk about new plant and machinery but it has never materialised."
He pointed out that the site left vacant by the former Tyne Brewery in Newcastle, intended for the Science City development, remained empty following the building’s demolition. A similar fate has befallen the former Vaux Breweries site in Sunderland.
And brewery staff last night described an air of ‘dejection’ among the workforce. Many expressed their relief at not having young families to support, while pitying the younger workers, who had been left ‘devastated’ and panicked about how their mortgage payments would be met.
James Ramsbotham, chief executive of the North East Chamber of Commerce, described Newcastle Brown Ale as a "global icon for the town and the wider North East". "Its fame stretches far and wide and it is a product that is part of the fabric of our region. There will be very many people that will be saddened to learn its production is leaving the banks of the River Tyne," he said. One North East chief executive, Alan Clarke, said the public sector would be mobilised to support those affected by the closure.
He added: "Newcastle Brown Ale is an iconic brand for North East England and enjoyed all over the world – statistics show it is the leading imported ale into the USA. The prospect of it being brewed elsewhere is extremely disappointing."
And Andrew Dixon, NGI chief executive, said: "Newcastle Brown Ale is as much an icon of the region as the Tyne Bridge. With over 80 years of physical association with Newcastle and Gateshead, it has carried our city’s proud name across the globe. The strength of the brand means that it will continue but it’s a huge loss to the region. It’s like the production of Wensleydale Cheese moving to the Tyne Valley."
North East Minister Nick Brown said: "It is unexpected and very sad. The workforce have got to be looked after properly. I would like to see the historic connection between Scottish and Newcastle and the region remain in some way."
Blaydon MP Dave Anderson described the news as "a bolt from the blue".
"No consultation has taken place with workforce or with regional nor local agencies to discuss the impact of this decision," he said. "This is totally unacceptable. They should sit down with unions, ONE North East and council to see if there is an alternative to closure. I will make myself available and will encourage ministers to help where possible."
Shadow Minister for Tyneside Alan Duncan said the decision was "another sign of Gordon Brown’s increasingly uncompetitive Britain". He said: "I fear we will see more pubs and clubs taking similar decisions. Labour has left a bitter taste in many people's mouths."
Iain Lowe, a spokesman for the Campaign for Real Ale (Camra), described it as a "sad day" for the region.
He said it was clear that the heritage of the famous ale counted for "less and less" to Heineken, who he accused of "trying to be the cheapest producer" of alcohol and for pursuing a strategy that was leading it "down a cul-de-sac".
A spokesman for the British Beer and Pub Association said the move reflected the difficulties faced by many breweries, with 36 having closed in the last decade.
"Sales of beer in Britain were down 5% in the year to June. As 90% of the beer drunk in the UK is brewed here in the UK, this is putting the industry under severe pressure," he said.
Page 3: Alastair Gilmour on the loss of Newcastle Brown Ale to Tyneside
Perhaps we don’t revere it enough. In the US, Brown Ale's everywhere
Newcastle Brown Ale is a favourite beer of Journal beer writer Alastair Gilmour. He gives a personal account of its loss to Tyneside.
THERE’S been something in the air for the past five years. The glorious aroma of malted barley on brewing days is a reminder that beer is still being made – therefore everything is well in the world – but cynical observers started sniffing the last Tyneside-brewed Newcastle Brown Ale in early 2004.
It didn’t feel right when Scottish & Newcastle moved production of the classic beer from its city centre home to Dunston: was it part of a longer-term strategy, a slow march south, a softening-up exercise for a knock-out punch?
Neither were they comfortable when, in July 2008, international beer giants Carlsberg and Heineken eventually swallowed up S&N in a £7.8bn deal, and four months later announced the closure of the historic Tetley brewery in Leeds.
Huge question marks followed each mention of the company’s other enormous plants at Tadcaster, Hereford and Manchester – Reading had already felt the corporate axe – so perhaps we shouldn’t really be too surprised by this most recent development.
When Scottish & Newcastle applied in 2005 for a European Union Protected Geographic Indication (PGI) to be removed, which meant Newcastle Brown Ale could be brewed in no place other than its home city, beer enthusiasts feared the brand could quite easily be moved thousands of miles from its birthplace, although brewery bosses claimed at the time there were no plans to decamp and that applying to have the scheme annulled was merely "tidying up the paperwork".
But now, more than ever, Newcastle needs its Brown Ale. It’s more than a legendary beer supped in 40 countries around the globe, it’s a symbol of North East pride and a benchmark for innovation and regional get-up-and-go. It’s the embodiment of that overused word "icon" and, in an uncertain economic climate, we should really be clinging on to our symbols of success, never alone losing 100m litres of beer a year.
Perhaps we don’t revere it enough. In the US it’s everywhere: advertised on yellow cabs in New York and bus stops in Sacramento, invariably and affectionately referred to as "Newcastle". It’s a best-seller in Jerusalem (where locals in Tuvia Bar call it Nuclear Brown) and in the Beit Hamarzeh pub, where the counter is so long and the custom so loud they have developed gestures for when a keg needs changing. A new Brown request is signaled by a leaping header movement, a la Alan Shearer.
Industrial and economic downturn is nothing new to Newcastle Brown Ale. It was born in 1927 in the aftermath of the previous year’s General Strike when coal industry owners reneged on a minimum wage agreement.
Miners reacted furiously and went on strike for nine days, the TUC supporting their demand for "not a penny off the pay, not a second on the day". Tyneside pubs were forced to close at 9pm and Newcastle Breweries took out insurance against riot damage after the Transport Workers’ Federation urged the company’s lorry drivers to down tools, which left deliveries of beer in the brewery.
But Newcastle Brown Ale, made of stern stuff, remained a buoyant prospect, selling at a premium price of nine shillings for a dozen pint bottles when it was first released.
In 1928, it won the Brewing Trade Review cup for best bottled beer, then followed a host of international gold medals, prompting adverts inviting drinkers to "try a bottle of this hefty, honest beer today – add your preference to the approval of the experts".
Since Newcastle Brown Ale’s move to Dunston, the beer has been brewed to a high alcohol content, trucked to Tadcaster, diluted (presumably with Yorkshire water), then bottled and shipped around the world.
We should have seen this thinning down process coming.
Page 4: 'A devastating blow for Tyneside'
'A devastating blow for Tyneside'
JIM Merrington spent 28 years with Scottish and Newcastle, ultimately as the firm’s commercial director, a position he held until ten years ago.
Last night he said the announcement was "not unexpected" given the challenging state of the market, but the news was nonetheless a "devastating blow for Tyneside".
"For centuries there has been a proud tradition of brewing on a large scale and now that’s gone totally. All we are left with is a handful of micro-breweries," said Mr Merrington. "Those of us who spent a lifetime building up the brand must be sitting today wondering why they bothered. But the product is too good for it to fade away."
He predicted customers would stay loyal to the brand, but said that the connections between it and the region not as strong as they once were. "Newcastle Brown Ale grew up on the backs of Geordies," he said. "They were the global ambassadors for the product. They took it around the world and they had ownership of the brand but that ownership has dwindled away."
A marketing expert agreed that the move threatened the product’s iconic status. New Zealand-born Professor Fraser McLeay, professor of marketing at Newcastle Business School, said the drink is already brewed under licence overseas by other firms to serve local markets.
But he agreed moving production out of the region made the Brown Ale story "more difficult to tell".
"Along with Newcastle United, it is probably the most globally recognised brand from the North East," he said. "I have worked internationally for most of the last 20 years and Newcastle Brown Ale is recognised around the world.
"It is not just important because of the export sales, but in helping to put Newcastle on the map."