Public outcry over planned closure of Diekirch brewery

The restructuring programme announced by the Brazilian-Belgian brewing group InBev will also affect Luxembourg, due to the relocation of production in the northeastern city of Diekirch to Belgium. The trade unions have condemned this decision, which is not motivated by economic or financial difficulties, and which will affect 63 workers. Indeed, the announcement has caused considerable political and public upset, as there is a strong tradition of brewing in Luxembourg.

Redundancy programme

Delegations from the Confederation of Independent Trade Unions (Onofhängege Gewerkschaftsbond Lëtzebuerg, OGBL) and the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschaftsbond, LCGB) have met with the local management of the InBev brewery in the northeastern city of Diekirch. The meeting follows the announcement of a restructuring programme in the Brazilian-Belgian brewing group, which will mean the relocation of production activities from Diekirch to Belgium. The trade unions feel that very few answers have been given to their questions. It should be emphasised that the restructuring decisions were not taken in Luxembourg but in Belgium. At present, the planned closure of the Diekirch factory and the loss of 63 jobs appear to be definite. If no further developments arise, the production line in the Luxembourg brewery could be closed by the end of September 2010.

Nevertheless, OGBL is continuing to question how a redundancy programme can be justified in a company that recorded a net profit of €4.75 million at the end of 2008, and that – according to the trade unions – was likely to end 2009 with a profit of over €5 million. The trade unions would like to know more about the company’s financial situation before starting negotiations about the redundancy programme. So far, the management has remained reticent on this subject. However, it has spoken of the need for constructive dialogue with the trade unions and recognises that it is important that this period of time must be as short as possible. The company wishes to act responsibly and find alternative solutions to redundancy.

Public protests

The announcement of the closure of the Diekirch factory and the relocation has brought consumers out onto the streets, although this unprecedented protest has been motivated more by a desire for the Diekirch brand to remain in Luxembourg than by support for the 63 employees. OGBL feels that the management have merely ‘taken note’ of the public protests triggered by the announcement of the production line’s relocation from the Luxembourg brewery to Belgium.

The trade unions do not believe that boycotting the brand can solve the problem either. They consider that strategy as a last resort, since it would affect local café owners far worse than the InBev group.

Possible alternatives

A takeover of the Diekirch brand by the Luxembourg Brasserie Nationale group that produces the Bofferding beer had been considered in order to save the jobs at risk. The Prime Minister, Jean-Claude Juncker, even announced his intention of making public money available to support this ‘industrial solution’. However, the trade unions fear that the prime minister’s proposals will not carry much weight with the global InBev group.

Moreover, the InBev management has consistently refused to sell the Diekirch brand. On the contrary, InBev wants to develop the marketing and sale of the brand within Luxembourg.

Political protests

Politicians have also been upset by the decision of the brewing group. The Luxembourg Socialist Workers’ Party (Lëtzebuerger Sozialistesch Arbechterpartei, LSAP) in the municipality of Diekirch wants to draw up a list of all the municipal benefits which the InBev subsidiary has received. It argues that municipal council leaders should take a ‘tough line’ with InBev at an emergency council meeting. LSAP also highlights the label of origin of the beer, which is brewed using water from springs located at the foot of the Herrenberg hill in Diekirch.

On this subject, a Luxembourg Member of the European Parliament (MEP) belonging to The Greens–European Free Alliance (Greens-EFA) group, Claude Turmes, has asked the European Commission to make a decision on the question of criteria to be used for labels of geographical origin. Beers that are promoted on their labels as having a local, regional or national identity are increasingly being produced far away from the place where they were originally made. Mr Turmes believes that this misleads consumers, since the name on the beer implies that it is genuinely produced in that place. In his opinion, the European Commission should act to ensure that accurate information is provided to consumers.

Odette Wlodarski, Prevent