Seagram's profit push leads to closings Cuts felt worldwide

future of Relay plant is not disclosed

November 30, 1995|By Ted Shelsby | Ted Shelsby,SUN STAFF

Seagram Co., the Montreal-based conglomerate that operates a liquor bottling plant in Relay, announced yesterday that it will close some warehouses, bottling plants and distilleries throughout its worldwide operations in an effort to boost profits.

The company reported a third-quarter loss of $55 million that included a $290 million pretax charge to cover the cost of plant closings and the elimination of jobs.

Chris Tofalli, a spokesman for Seagram in New York, said most of the plant closings will be in Europe, but there will be some in the United States. He said the company was not ready to identify which plants will be closed or how many jobs might be eliminated. Nor would he discuss whether the House of Seagram plant in Relay will be affected.

Most of the closings are expected to be completed within six months to a year.

The Relay plant blends and bottles a variety of products including Seagram's 7 Crown, Seagram's gin, Captain Morgan rum and Passport Scotch. It has about 350 workers.

A distillery on the same site was closed about 12 years ago. The Relay plant had nearly 1,000 workers in 1948 and as many as 850 in the late 1960s.

Five years ago Seagram closed a bottling plant in Dundalk and eliminated about 300 jobs.

In releasing third-quarter results, Edgar Bronfman Jr., Seagram's president and chief executive officer, said the resulting savings from the cutbacks in its beverage business "will far exceed the charge we are taking today."

Seagram operates two core global businesses: beverages and entertainment/communications.

Seagram's distilled spirits, wines, fruit juices, coolers and mixers are sold in more than 150 countries and territories.

"The spirits market in Europe remains extremely difficult. However, globally we are pleased with the overall strength of Chivas Regal and Passport Scotch whiskeys and Martell Cognac," Mr. Bronfman said.

Seagram's entertainment/communications company, MCA Inc., produces and distributes motion pictures, television and home video products, produces and distributes recorded music, operates theme parks and retail stores, and publishes books.

The $55 million third-quarter loss was equal to 15 cents a share. In the same period last year, Seagram posted a profit of $199 million, or 53 cents a share. Revenues increased 93 percent to 2.9 billion from $1.51 billion due primarily to its acquisition of MCA and the beverage business of Dole Food Co.

Seagram's stock closed at $37.375, up 12.5 cents.

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