E-Malt.com News article: Australia: Unions claim Carlton & United Breweries is facing the prospect of several millions of dollars in losses

Beer giant Carlton & United Breweries is facing the prospect of several millions of dollars in losses as it struggles to meet rising demand in the lead-up to Christmas, The Australian Financial Review reported on October 25 citing local unions.

The brewer has so far managed to survive the four-month industrial dispute affecting its Abbotsford plant in Victoria by transporting beer from its Queensland factory and sourcing warehoused stock.

However, the Electrical Trades Union says that stock is coming to an end and there is "no question" CUB will not be able to meet the doubling in alcohol demand for the summer months.

"There is no way, given the loss over the last 18 weeks, that they can match the next six weeks," ETU state secretary Troy Gray said.

"Everyone agrees on that. Even if they went back to the normal levels tomorrow they'd struggle to reach Christmas demands."

About 55 retrenched maintenance workers have picketed the Abbotsford site since July after the company offered them their jobs back on substantially reduced wages and conditions.

The union says the replacement maintenance staff are less experienced and have resulted in longer stoppages to the factory's intense 24-hour, six-day-a-week production schedule.

Reports from workers within the factory say production has halved from about 1.1 million slabs a week to an average of about 400,000, falling as low as 180,000.

Based on a standard A$1 million in output a day, the union said on conservative estimates the plant is operating at a A$2 million loss every week – which, it says, is also the amount the company saved in labour costs.

The million-dollar production loss could translate into a hit on sales over the next few weeks as the unions say there are signs storage is declining due to the closer expiry dates of beers and low stock in regional towns.

On top of that, demand is set to spike as the industry approaches peak season and prepares for the Melbourne Cup, the cricket, Christmas and New Year's Eve.

Former CUB machine specialist Chris Brown said the season's doubling in demand required a period of preventative maintenance that had not occurred.

As a result, machines were operating at 50 per cent or less efficiency, compared to the 80 per cent necessary to run a 24-hour cycle.

"It's not sustainable," he said. "If you're in a reactive cycle the machines need a certain level of maintenance. If not, reliability is non-existent and you're always behind. From then on in, things can spiral out of control. If they get a good run at all it's luck."

He said on October 24 one production line had produced just 36 cases of beer out of an expected 12,000 because of machine stoppages.

A CUB spokesperson denied the company was at risk of running out of beer in peak season.

She said the unions had previously made false claims that CUB would run out ahead of the football finals, the grand finals and the spring racing carnival. "We see this claim as no different."

The dispute comes as CUB is expected to resume its No. 1 place in the beer market after parent company SABMiller merged with global rival Anheuser-Busch InBev, bringing major brands Corona and Stella Artois under the CUB stable.

The company's new management saw the brewer seek the assistance of Fair Work Commission president Iain Ross to resolve the dispute earlier this month. Parties are set to hold further discussions on Thursday.

The CUB spokesperson said "our focus is in negotiating in good faith".

"We would ask the same of the unions."


24 October, 2016