Citing depressed sales volumes and increased competition with craft breweries, MillerCoors LLC announced that it would close one of its breweries in North Carolina, laying off 500 workers.
MillerCoors LLC, one of America’s largest brewers, announced on Monday that it would shut down one of its eight U.S. brewing plants amid a drop in sales volumes. According to a report from the Wall Street Journal, the company cited increased competition from American craft brands as the reason for the ongoing decline in sales.
MillerCoors, which is the second largest brewery in the country after Anheuser-Busch InBev NV, said that it would shift production from its Eden, NC location over the course of the next 12 months before closing its doors for good in September 2016. The brewery currently employs 520 people and makes Coors Light, Miller Light, Miller High Life, and Blue Moon brands.
The move is attributed to MillerCoors CEO Gavin Hattersley, who recently replaced the head marketing officer and the president of sales. Under the CEO’s watch, the company has also dropped its ad agency representing Coors Light, and purchased craft brewer Saint Archer Brewing Co. since his appointment at the end of June.
Major American breweries are finding it difficult to compete with the proliferation of small craft breweries in recent years. The number of regional and microbreweries in the United States grew 19 percent to 3,418 last year, according to the Brewers Association.
MillerCoors and AB InBev still maintain market shares of 26 percent and 44 percent, respectively. Their sales have been declining in recent years, and it was only a matter of time before one of their breweries would be shut down.
Union leaders are currently negotiating severance packages for the workers at the North Carolina plant with the company.