USA: City Brewing is negotiating to acquire Memphis brewery as its first expansion

About a year after Molson-Coors Brewing Co. announced it was closing its Memphis brewery, a Wisconsin-based company is negotiating to buy it, Commercial Appeal posted on March 21. City Brewing Co., based in LaCrosse, Wis. says it is considering buying the 1.3 million-square-foot facility on Raines Road and hiring many of the 410 employees.

"We think the Memphis facility has great employees and a great facility," said City Brewing President Randy Smith. "Those people have the experience and they have the understanding needed to run the business," he said.

Smith could not estimate how many employees City Brewing would hire if the sale is completed. Smith said great employees and a great facility were key to making the company's brewery in LaCrosse successful, and he hopes the same will happen for City Brewing in Memphis.

This will be the first expansion for City Brewing, which primarily produces products for other companies, including Coors. Molson Coors Brewing Co. has been searching for a buyer for the brewery since announcing early last year that it planned to close the plant in early 2007.

The Memphis plant brews Coors Light for export, plus Zima XXX, Keystone Light and Blue Moon. Production of those products has begun to shift to other plants as the company phases out the Memphis plant.

The brewery started out as a Schlitz brewery in 1971 and was sold to Stroh Brewery Co. before becoming part of Adolph Coors Co. in 1990.

There is no date set for completion of sale, said Robin Hicks, the business development manager for the Coors Memphis plant. Generally, this period of due diligence takes between 30 to 60 days, but it can also stretch beyond, she said.

There is still a lot of work to go through before the sale can be completed, Smith said. City Brewing wants to learn more about the Memphis plant, work out an agreement with the labor union and explore other issues at the plant.

While the company still has production capacity at its existing facility, Memphis offers it a greater geographic reach and additional bottling capability.

City Brewing now produces about 1.6 million barrels a day, up from zero from five years ago when the company was started.

According to Brewers Association, City Brewing was the fifth largest craft brewer in the United States in 2005, after Anheuser-Busch, Miller Brewing, Coors Brewing and Pabst Brewing. Craft brewers produce primarily all-malt beer.

The company got its start when the G. Heileman brewery (known for Old Style beer) in LaCrosse closed in 1999. Some of the plant's workers along with other local investors bought the facility and opened City Brewing. The name came from the original brewery that opened on that spot in 1858.

City Brewing does produce some of its own labels, which are available primarily in the upper Midwest. Those labels include LaCrosse Lager, City Lager, KUL and their light counterparts. But most of its business is brewing and packaging other beers, teas, energy drinks and other beverages. It has done contract work for Mike's Hard Lemonade, Arizona Tea and Smirnoff Ice.

Smith said if the sale goes through, he anticipates producing some Coors products at the facility, but also bringing in some additional business.

"We know there is business out there to support that," he said.


City Brewing Co.

President: Randy Smith
Headquarters: LaCrosse, Wis.
Number of employees: Between 300 and 400, seasonally
Number of barrels of beer produced: 1.6 million
Web: citybrewing.com

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