City Brewing Co. officials plan to restart production of beer, malt beverages and non-alcholic beverages in early 2007 after completing the purchase of the former Latrobe Brewing Co. plant on Thursday.
The deal could put as many as 250 brewers, bottlers and packers back on the job when the Latrobe plant realizes full capacity, said Kenneth Yartz, chief operating officer of LaCrosse, Wis.-based City Brewing.
"We're relieved it's done ... Now the excitement begins," Yartz said.
City Brewing purchased the plant from InBev USA. No purchase price was disclosed.
City's Brewing's potential for producing 2 million barrels of product annually could be hampered unless a way can be found to upgrade sewage treatment capacity.
"We need a pre-treatment facility, and we're working toward financing," said Tom Gray, manager of the Latrobe Municipal Authority.
Yartz said that he was "optimistic" the issue would be resolved and that the 250 jobs could be attained within a three-year timetable "if we're not limited by the waste treatment issue."
"We're going to have to treat our wastewater on-site, and we're looking at options," Yartz said. He did not reveal any cost estimates.
Frank Horrigan, regional director of the Governor's Action Team in Pittsburgh, said funding could come from PennWorks, a $200 million program that provides grants and loans to municipalities for water projects.
When City Brewing begins production in Latrobe early next year, "it could be anything in our portfolio, but probably malt beverages," he said. Preliminary plans call for 2 million barrels of production, split between 800,000 barrels of blended product and 200,000 barrels of beer.
In May, InBev USA, a division of Belgian brewing giant InBev NA, sold the Latrobe Brewing Co. name and its Rolling Rock and Rock Green Light beer brands to Anheuser-Busch Cos. for $82 million. The company said its plans did not include the Latrobe facility. In June, City Brewing signed a letter of intent with InBev to negotiate to buy the Latrobe Brewing plant.
"In looking at potential buyers for this facility, we had made a commitment to determine the best option for the brewery and its employees. We believe City Brewing will offer a solid future and strong growth opportunities to both union and salaried employees in Latrobe," said Doug Corbett, president of InBev USA, in a statement.
About 155 unionized brewers and bottlers, represented by the IUE-CWA, the industrial division of the Communications Workers of America, ratified a two-year contract with City Brewing in July. The deal expires Aug. 1, 2008.
"The guys are jumping at the bit to get back to work. It's been a nervous time, but the guys have been patient," said Ken Ream, international representative for the IUE.
The last bottles of Rolling Rock beer rolled off the bottling line July 26, marking an end to 67 years of beer production at the Latrobe plant. Anheuser-Busch is brewing Rolling Rock at a plant in New Jersey.
City Brewing is the nation's fifth-largest brewer and expects to grow with the addition of the Latrobe plant. "It gives us a regional presence. Customers want something bigger than one plant," Yartz said. City Brewing operates a brewery in LaCrosse, Wis.
He said City Brewing is done buying for the present time and isn't interested in bankrupt Pittsburgh Brewing Co. "We haven't contemplated that. There's no need for a third brewery, particularly two within a 100-mile radius," Yartz said.
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