Union says 1,500 S&N jobs are at risk over Swiss deal

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The Transport and General Workers' Union warned yesterday that Scottish & Newcastle's new distribution joint venture with a Swiss freight group will put 1,500 jobs at risk.

Britain's biggest brewer announced it would outsource the distribution of its Foster's, Kronenbourg and John Smith's beers from breweries to pubs and retailers over to Kuehne +Nagel for an initial period of 10 years. S&N expects annual cost savings of £5m and will receive a net payment of £30m from the joint venture.

Under the deal, 1,900 drivers, draymen and warehouse workers at S&N will join the Swiss logistics group and transfer to the new venture, called KN Drinks Logistic, joining with 1,000 Kuehne +Nagel staff.

The T&G said it had not been consulted properly on the plan, but S&N insisted all 1,900 jobs were safe.

John Dunsmore, the head of the brewer's UK operations, said: "There won't be any job losses amongst the 1,900, amongst their membership." He stressed the venture was not primarily about cost-cutting but about business development, as it would seek new contracts with other drinks groups to distribute their products. He said the venture could attract regional brewers and other suppliers to pubs, such as food and soft drink makers.

"We're a business that wants to build brands and sell beer. Distribution is best done through a specialist world-class logistics company," Mr Dunsmore said.

However, the T&G's national organiser, Brian Revell, said: "Our members have co-operated with substantial changes in work to keep distribution in-house. This action by the company is a slap in the face to them after all that effort, and certainly means the company has no idea how to keep its side of the bargain."

Talks are scheduled with the company this week to negotiate safeguards for the S&N workers. Mr Dunsmore argued the jobs were safer within the new venture, but a spokesman for the union rejected this.

Mr Dunsmore said the move was prompted by changes in the UK beer market with the on-trade of pubs suffering a 3 per cent annual decline in beer sales.