Lion to spend $43m in wake of earthquake

The East Tamaki site will take over brewing specialty beers and continue to bottle and can Speight's. Photo / Steven McNicholl

Dunedin's Speight's brewery is getting a surprise $20 million redevelopment boost from owners Lion to replace lost brewing capacity in Christchurch, with job numbers to more than double.

Christchurch's February quake damaged equipment in Lion's Canterbury Brewing site, at St Asaph St within the city's CBD quake cordon, leaving it unable to brew beer.

Lion, which rebranded last week from Lion Nathan, yesterday announced a $43 million reinvestment package across three sites in which Dunedin will have its keg producing capacity and home brew kit numbers increased, with the upgrade construction and commissioning completed by December next year. Actual beer brewing on its own will increase 250 per cent in Dunedin.

Dunedin is to become the new site for the sideline business of malt extraction from partially brewed beer. The malt goes to home brew kits sold globally, and as a baking ingredient.

At East Tamaki, the plant will take over brewing other speciality beers and continue to bottle and can Speight's, while $15 million will be spent at the existing Canterbury Brewery site to redevelop it as the main South Island distribution centre.

Lion acting managing director Rory Glass said recent inspections of the St Asaph St site had revealed the brewhouse and packaging hall were "damaged beyond repair" and Lion would be unable to brew beer again in Christchurch "in the foreseeable future".

"We are very mindful of the impact that these decisions will have on our Christchurch people - who are already dealing with the ongoing challenges of life in the aftermath of February's devastating events."

The $43 million reinvestment is funded from Lion's cash reserves within its capital expenditure programme. Job numbers in Dunedin would increase from 11 to 27, while across the South Island a total of 22 jobs would be lost; with Lion retaining 70 employees around Canterbury. Of 38 positions affected in Christchurch, Lion hoped most could be redeployed to new positions.

Glass said Lion would offer staff being made redundant "redeployment opportunities" where possible, and otherwise be offered a "comprehensive redundancy" package. Speight's brewery, which is also a tourist attraction, will be upgraded with the building of a new brewhouse and the upgrading of cellars and kegging facilities.

Glass said the redevelopment would also introduce a greater level of technology and automation into the systems at the Speight's brewery.

The new $15 million distribution centre, on the St Asaph St site, would be built to meet new earthquake codes and included an investment in new technology.

POURING CASH
Dunedin: $20 million to boost Speight's brewing capacity by 250 per cent.
Christchurch: $15 million, new warehouse and distribution centre.
Auckland: $8 million, increase other-brand brewing.