Gilbey to refine SA distillery operations

GILBEY is considering laying off a quarter of its South African workforce, closing some plants and contracting out distribution in an effort to increase profitability.

The South African operation, which has 11 to 12 per cent of the local liquor market, is 51 per cent owned by International Distillers and Vintners, a subsidiary of Grand Metropolitan. Apart from Gilbey's gin, it produces and distributes Grand Met-owned brands such as Smirnoff, Cinzano, J&B whisky and Crossbow cider, as well as local wines and spirits.

Keith Frogley, a director, said Gilbey wanted to shed unprofitable brands and concentrate production at two sites instead of four. Its proposals were being discussed with unions and other groups of employees, and would not be finalised until July.

Unions are contesting the plan, which calls for two plants at Stellenbosch, near Cape Town, to be phased out. With distribution also being contracted out nationally, some 200 jobs would go in the Western Cape and another 200 in the rest of the country.

Mr Frogley denied that Gilbey was scaling down operations in South Africa when many other foreign companies were poised to invest, in the wake of the country's first free election. 'We are aiming to concentrate production in our Johannesburg and Durban plants, and to invest substantially in them,' he said. He said IDV's investment in South Africa would increase.