IN the wake of new employment costs St Austell Brewery has today confirmed it has placed some of its workforce into collective consultation and will be reviewing its operational structure.

In a letter to staff, St Austell Brewery’s chief executive, Kevin Georgel, has cited the company is having to take ‘difficult, but necessary steps’ in order to secure its future success, and has stated that the new employment costs ‘inflicted by the government’ will place significant additional financial strain.

St Austell Brewery employs more than 2000 people across the South West. The independent and family-owned company operates more than 160 pubs across the region — including managed houses and tenancies. It also operates two breweries, in St Austell and Warmley, near Bath. With a network of six depots across the West Country — from St Columb to Wimborne — the company is also a leading wholesale drinks distributor in the region.

Mr Georgel said: “We have this week communicated to our teams that we will be entering into a 30-day period of collective consultation. The process will involve us consulting with team members across multiple departments and may result in a reduction of up to 40 roles through redundancy. Our teams in our managed pubs are not included in the consultation process.

“The brewing and hospitality sector has had an extraordinarily difficult few years — one of the most challenging periods in our 174-year history. We have successfully navigated these challenges, but they have been compounded by the significant increases in National Insurance announced in the autumn budget, which are effective from April.

“The additional cost of employment amounts to a further £3-million a year and it is not realistic, nor appropriate, to presume that we can pass on all the increased costs onto our guests or customers.

“The decision to explore potential redundancies is not one that has been taken lightly. The proposed changes reflect a considered and measured response to the challenges we face and will help ensure that the business remains fit for the future.

“We are, and we will continue to invest significantly into the South West for the long term, developing our people, improving our pubs and positively evolving our brewing capabilities and brand portfolio.

“The company remains profitable, and we are making good progress against our long-term strategic plans and are outperforming many of our peers.

“However, the financial headwinds we are facing, which have intensified as a result of the autumn budget, require us to take further action which involves reducing our fixed cost base to strengthen our resilience; it is a difficult, but necessary step to secure our future success. In order to continue to invest for the future, we need to proactively manage and calibrate our costs to reflect the current market conditions.”

Mr Georgel added: “Our sole focus now is to work with our teams and support them during this difficult and unsettling period.”

Mr Georgel added that in the last five years St Austell Brewery has invested more than £100-million into the region.