UK: Scottish & Newcastle PLC could close two of its five UK breweries over the next two years, the Financial Times reported on January 27 citing research by analysts at Credit Suisse First Boston. The brewer, which sold its pubs arm last year, is reviewing all aspects of its business in a bid to cut costs and integrate better the international beer operations it has bought in recent years. It declined to comment on the speculation that one or more brewery closures could form one part of its cost-cutting drive, which is also expected to look at issues such as procurement, the newspaper said.

The research note from CSFB claimed there was "significant scope to increase efficiencies" in the UK. It reckoned one brewery closure alone could add 25 mln stg to S&N's annual profits.

S&N's five UK breweries are located in Edinburgh, Newcastle, Tadcaster in North Yorkshire, Manchester, and Reading. All are sensitive sites to some extent. S&N has its headquarters in Edinburgh, for instance. The Tyne Brewery in Newcastle is also integral to the image of Newcastle Brown Ale, an export success for S&N in the US.

The closure of either plant could also have an impact on the company's name -- 'Scottish & Newcastle' implies a business with a presence in both Scotland and Newcastle. That does not mean there are any soft options further south. The Royal Brewery in Manchester is the most productive in the UK in terms of pints per person employed. The Berkshire Brewery in Reading is much bigger than the other UK sites, the article said.

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