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Coors Brewing signs agreement in principle to purchase Stroh Brewery Co.'s Memphis, Tennessee brewery.

Coors Brewing signs agreement in principle to purchase Stroh Brewery Co.'s Memphis, Tennessee brewery

Coors Brewing Co. announced that it has signed an agreement in principle with the Stroh Brewery Co. for the purchase of its Memphis, TN, brewery. Subject to the satisfaction of certain conditions, Coors and Stroh expect to close the sale on or about July 3, according to a Coors spokesperson, Heidi Buehler Nogues, adding that she doesn't "foresee any problems in that area."

"This purchase is part of our overall strategy to position Coors Brewing Company for future growth," said Peter Coors, president, Coors Brewing Co. "It will provide the additional capacity we need to respond to rising consumer demand for our products. The plant is strategically located, and it has a solid infrastructure and a skilled workforce in place. That makes it an excellent fit for us," Coors continued.

Coors added that specific plans for the Memphis brewery, built in 1971 and employing 500 workers, are being formulated and will be announced shortly after the closing of the sale.

Stroh president Peter Stroh said the transaction is part of the ongoing process of focusing the company's resources "in those areas where the company can be more effective.

"This transfer will permit us to efficiently consolidate our production into our remaining five breweries," Stroh said. "And we are delighted that the operation and long-term employment opportunities at the Memphis facility will continue. We feel this decision will create a most beneficial outcome for our employees both in Memphis and nationally."

Stroh spokesperson Lacey Logan noted that the Detroit, MI-based brewery has no plans to sell any of its remaining five breweries in the future, contrary to industry whispers concerning the future sale of Stroh's St. Paul, MN, plant. Logan added that the volume produced at the Memphis brewery will be shared among the remaining facilities.

Currently, all Coors beers are brewed at the Golden, CO, brewery which last year produced 17.7 million barrels. To meet consumer demand, Coors has been shipping some of its beer to its satellite packaging facility in Elkton, VA, which has a packaging capacity of 2.5 million barrels. The Memphis brewery would add an additional packaging and brewing capacity of 5.5 million barrels.

The agreement between the two brewers calls for continued Stroh production at the Memphis plant until September 1, 1990. During the transitional period, workers will remain employees of Stroh.

Effective September 1, Coors will assume the brewery Union's collective bargaining agreement for the hourly employees and salaried employees will be notified at a later date regarding employment with Coors, Logan said.

The brewery purchase will mark the first time in many years that Coors will deal with a large-scale union. Currently, Coors' only union employees are some operating engineers, the company said.
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Publication:Modern Brewery Age
Date:Jun 11, 1990
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