Carlsberg to axe 2,000 jobs and cut UK production

The number of job losses in the UK has not yet been confirmed but the decision was expected to affect slightly less than 100 employees in this country.  

Carlsberg yesterday (November 11) announced plans to reduce the production team at its Northampton brewery and start a review of its customer supply chain operations.

Employees at the brewery, an office in Leeds and 12 customer distribution depots will be affected by the changes. Unite the Union has a meeting with the firm next week.

‘Overcapacity’

Carlsberg UK interim chief executive officer Michiel Herkemij said: “One of the biggest challenges in the UK beer market is significant overcapacity, driving short-term behaviour in the market place.

“By making these proposed changes, we can control costs and build our brands and drinks portfolio. Removing the pressure to solely focus on volume will drive greater value for our business and for our customers.”

Carlsberg Group director of media Kasper Elbjørn declined to comment on the scale of UK job losses but said the firm planned to restructure the commercial organisation, reduce production and review the supply chain.

“Our recent strategy has focused more on volume and this has been at the expense of maintaining value within our business,” Elbjørn said.

‘Refocusing’ on value

“We plan to change this and increase profitability by restructuring and refocusing the business on value.”

A financial statement, released on Wednesday (November 11), said Carlsberg planned to make efficiencies by “simplifying, streamlining and removing duplication” across the group.

“In total, we will reduce white-collar headcount by approximately 2,000 employees, corresponding to around 15%, of which approximately 1,300 have been notified,” it said.

“Other initiatives include the implementation of operating cost management, a framework for budgeting, tracking and monitoring costs, and further outsourcing of selected shared services.” 

The financial performance of its UK business has deteriorated due to market challenges and Tesco’s delisting of Carlsberg , according to the statement.

"The recent delisting at a major retailer has further added to the challenges and led to under-absorption of costs in our operations,” it said.

Group beer sales volumes declined 3% in the third quarter due to the weakness of Russian and Ukrainian beer markets.  

Carlsberg UK has an about 13% share of the UK beer market through brands such as Carlsberg, Tuborg, Tetley’s and Somersby Cider.

In September nearly 200 Carlsberg workers took part in a ban on overtime and work-to-rule, after the firm imposed what Unite described as a worldwide pay freeze.