Foster’s new foreign owners pledge to keep Abbotsford brewery open

Jonathan ChancellorDecember 8, 2020

The new foreign owners of Australia's biggest beer company, Foster's, have pledged to keep the 108-year-old Abbotsford brewery open, dismissing suggestions the inner-Melbourne plant would be sold to property developers.

Foster's chief executive Ari Mervis says the brewery, which employs more than 200 workers, will be maintained as it represented a historic link for the company.

''We have no intention of moving it or closing it, certainly at Abbotsford there is an opportunity to improve the efficiencies, but there is no intention to close it down or need to close it down,'' he told an analyst conference in London earlier this week.

Ever since Foster's was bought by global brewing giant SABMiller late last year for $12 billion plus, there’s been speculation the Abbotsford brewery would be closed and the land sold off to help pay for the acquisition.

Carlton & United Breweries began making beer on the banks of the Yarra in 1904 having commenced operations at the top end of Swanston Street 23 years after Melbourne was founded in 1835.

The 10-hectare site, set four kilometres east of the city centre, comes with an estimated value of $100 million plus. The suburb has become a hive of residential development activity.

The brewery and its buildings – old and small by modern standards, but not heritage listed – are constrained by heavy traffic as well as inefficient work practices, analysts maintain.

Foster's could save close to $4 in reduced electricity, water, labour, packaging and freight costs on each case of beer produced at the ''antiquated'' Abbotsford site if it moved to another location, according to Merrill Lynch.

In a briefing note to clients in June, analyst David Errington said, ''on 55 million cases produced at Abbotsford, this would lead to cost savings of between $150 million and $200 million''.

Five years ago Fosters sold 12 properties adjacent to the Abbotsford brewery for $49 million.



Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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