USA: Westmoreland County brewery’s destiny uncertain

Pressure from wine, spirits and nonalcoholic beverages has created overcapacity in the beer industry, and that means long odds for finding a buyer for Latrobe Brewing Co., according to beer industry analysts and observers. At stake are about 200 jobs at the brewery, founded in 1893, Pittsburgh Tribune Review posted May 25.

Anheuser-Busch, one of the biggest brewery conglomerates in the world, last week bought the Rolling Rock brand from InBev, a Belgian beverage company with 85 international brands, for $82 million. The sale was announced Friday to the plant’s 250 employees.

The sale did not include production facilities. InBev USA, a division of Belgian brewing giant InBev NA, said brewing operations would close by July 31. Anheuser-Busch plans to brew Rolling Rock at its plant in Newark, N.J.
"It was devastating. I’ve been working there 42 years," said maintenance worker Ed Dobies. "Those corporations never set foot in this town, never got to see the dedication and work we put into them green bottles.

"Rolling Rock is Latrobe. If it moves out of town, I’m never drinking it again."

County commissioners also fretted about the loss of corporate taxes to the Latrobe school district and city, and wondered whether Latrobe’s water authority will need to raise rates once its biggest consumer is gone.

Politicians from Latrobe Mayor Tom Marflak to Gov. Ed Rendell have pledged to woo a new brewer to the cutting-edge facility, but William Ehman, the self-proclaimed "chief rabblerouser" who helped lead the call for the boycott, said they were being presumptuous.

"Conglomerates make business decisions all the time, and they change their minds all the time, too. I’m an optimist," Ehman said.

"I think Western Pennsylvanians should do something right now; not just us, but people everywhere who like a good beer, and who understand the pride and identity that goes into Rolling Rock. It’s not too late to get (the brewing corporations) to change their minds."

Nick Carota, head of maintenance at the brewery’s bottling division, said a Rolling Rock beer made in New Jersey may wear the same label, but it won’t really be the same product.

"They can’t market it as ‘made from mountain spring water’ when they’re using water pulled from the East River," he said. "They won’t get this kind of quality and workmanship from people in Newark."

"If it’s not from Latrobe, it’s not Rolling Rock," said beer lover Heather McCallen.

The imminent loss of the landmark Rolling Rock Brewery is spurring leaders of 15 Westmoreland County, Pa., union locals to lay down their lagers and start a nationwide boycott, The Columbus Dispatch posted May 25.

Organizers said beer drinkers should continue to pound down Rolling Rocks through the end of July, when the Latrobe, Pa., brewery is scheduled to close and move operations to a plant in New Jersey. But they called on imbibers to immediately shun all other products produced by the corporations who did the deal.

That means no more Bacardi, Beck’s, Budweiser, Busch, La-Batt, Michelob, O’Doul’s, St. Pauli Girl and Spike’s products.

InBev filed its plant closing notice with the state on May 24, saying the July 31 shutdown will be permanent.

Beer industry analysts and experts are divided on whether the Westmoreland County brewery would attract interest from a craft brewer, a segment that includes more than 1,300 small, traditional and independent breweries that primarily make all-malt beers.

Speculation over potential suitors has included Boston Beer Co., the maker of Sam Adams beer; City Brewing Co. of LaCrosse, Wisconsin, and Pottsville-based D.G. Yuengling & Son.

There has even been talk of an alliance or combination of Latrobe Brewing Co. with bankrupt Pittsburgh Brewing Co.

"It's a logical question, and we have talked among ourselves about that," said George Sharkey, business agent for Local 144 of the International Union of Electronics Workers. The union represents 150 workers at Pittsburgh Brewing and 154 workers at Latrobe Brewing.

Wrestling with its own efforts to remain in business, Pittsburgh Brewing hasn't considered buying Latrobe Brewing's updated production plant, Pittsburgh Brewing co-chairman Joseph Piccirilli said yesterday.

"If we had a wish list, it would be on there. But at this time, we haven't considered that option. We have to stay focused right now to successfully reorganize before we could consider a measure like buying Latrobe Brewing," Piccirilli said.

Latrobe Brewing produced about 852,000 barrels of beer last year at a facility that has the capacity to produce 1.3 million barrels, due in large part to a high-capacity bottling system introduced in 2003.

"There's so much overcapacity in the beer industry today. I don't think there's a lot of demand for a smallish, unionized brewery. The brewers with capacity needs would likely contract with larger brewers to take advantage of lower costs," said Harry Schumacher, editor of Beer Business Daily, in San Antonio, Texas.

Schumacher said craft brewers such as Sierra Nevada Brewing Co., based in Chico, California, and New Belgium Brewing Co., based in Fort Collins, Colorado, could possibly have an interest.

A brewer from the Western part of the country may want to buy an Eastern brewery to cut shipping costs, said Paul Gatza, director of the Brewers Association, a Boulder, Colorado-based trade group representing about 800 brewing companies.

Another brewer mentioned as a possible suitor is City Brewing Co., of LaCrosse, Wisconsin, which brews its own brands and makes beer for other companies under contract. "We cannot comment at this time," said Gregory Inda, chief financial officer.

D.G. Yuengling & Son has also surfaced as a potential buyer, a question that has been discussed at its Pottsville headquarters.

"Strategically, we never eyed it up, but it's not totally out of the question. We never say never," said David A. Casinelli, chief operating officer.

Casinelli said a negative is that Latrobe Brewing may be too close geographically, since the company has two breweries in the Pottsville area and another in Tampa, Florida.

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