16 March, 2007

USA: Molson Coors to save $250 million over the next three years

Molson Coors Brewing Company, a global brewer, plans to reduce costs by $250 million over the next three years, which it hopes to invest in strengthening its brands and repurchasing shares, Drinks Business Review posted on March 9th 2007.

The company, famous for its Coors Light beer, expects to save the majority of the money by streamlining operations, including supply chain costs. Molson Coors said that it expects to save $55 million in 2007, which would help offset higher fuel and grain prices.

Molson Coors has already cut 100 jobs in Canada, saving the company $11 million. Whether more job cuts will occur was not specified.

Tim Wolf, the company's CEO, said: "To put the $250 million, three-year goal into perspective, this amount equals about 45% of our 2006 pre-tax income. These cost reductions will provide ongoing resources for growth or to drop to the bottom line. How much we reinvest will depend on several factors, not the least of which is our commodity costs.

"If we assume that inflation is generally offset by beer pricing and volume growth, our next generation of cost savings will provide strong resources to build brands and grow profits," added Mr Wolf.

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