DTI offers support to halt Swallow brewery closure

THE GOVERNMENT yesterday weighed into the politically-charged dispute over the future of 600 jobs at the Sunderland brewery owned by Swallow Group, holding out the prospect of government grants if the brewery is kept open.

The Department of Trade and Industry said it had offered assistance to the management buyout team whose pounds 68m bid for two breweries and 350 pubs was rejected by non-executive directors. "The Government has offered substantial regional selective assistance to the MBO and we understand the board has decided to reject the MBO offer. We regret they felt it necessary to take that decision but we stand ready to respond if a fresh opportunity to keep the brewery open should arise," said a DTI spokeswoman.

Local MPs have launched a campaign against closure, attacking three of Swallow's biggest shareholders - Mercury Asset Management, Hermes and Bankers Trust - for rejecting the MBO. Derek Foster, MP for Bishop Aukland, said the fund managers had not informed their pension fund clients of their stance. "I've spoken to the Post Office [one of Hermes' biggest clients] and they had heard nothing about the issues."

However, the brewery seems certain to be taken out of the Nicholson family, which hasowned it for over a century. Sir Paul Nicholson, the chairman who has criticised his boardroom colleagues for rejecting the MBO, will resign within days.

Sir Paul is calling for an egm to examine the alternatives. He said plans to close the Sunderland brewery, with the loss of 600 jobs, would cost only pounds 2.5m less than the management buyout team's plans.