A South Korean firm that had planned to buy the shut-down Halethorpe brewery from Stroh Brewery Co. said yesterday that it's walking away from the deal because of insufficient support from the state.
"The type of financial support we expected from the state has not materialized," said Joseph Ahann, senior vice president of the company, A&E International Ltd. He declined to discuss details of the state's offer, but called it "very insignificant."
"I don't think there's any possibility of future negotiations," he said.
Stroh also said negotiations had come to a halt, threatening the prospects of saving 300 brewery jobs.
Meanwhile, the state denies the deal is off. "As far as we understand, we are still in negotiations with A&E," said Darlene Frank, a spokeswoman for the state Department of Business and Economic Development, who also declined to discuss details.
A&E already purchased the dormant Procter & Gamble Co. factory in Locust Point in December for $7 million to make soju, a vodka-like Korean liquor popular in the Far East. The company plans to import raw materials, manufacture soju at that plant and export the finished product. A&E plans to hire about 100 people at the Locust Point plant, but does not have a specific timetable, Ahann said yesterday.
He said A&E had negotiated with Stroh to buy the brewery for $25 million. Declining to discuss the state's offer or the company's demands, Ahann said only that A&E wanted the state to play an active role in guaranteeing the deal's financing.
The state Department of Business and Economic Development promotes the creation and retention of jobs through an assortment of grants, incentive packages and financing guarantees.
Detroit-based Stroh closed the Halethorpe brewery in December and eliminated 430 jobs. Stroh, which acquired the brewery in July when it bought the G. Heileman Brewing Co., blamed the closure on larger, newer breweries the company has in Pennsylvania's Lehigh Valley and in Winston-Salem, N.C.
Ahann said A&E was considering various uses for the brewery, including the manufacture of soju or the brewing of a new beer. He wouldn't comment further about the plant or how many people it would employ under A&E.
Any decision to operate the brewery, which has an annual brewing capacity of 2.3 million barrels, could result in as many as 300 jobs, according to an official familiar with the A&E proposal.
The Halethorpe brewery was the state's last major brewery. When it closed, experts gave it little chance of resurrection. Amid industry consolidation, the building of larger breweries and the growth of Anheuser-Busch, the number of major breweries nationwide fell from 421 in 1947 to 29 in 1995.
A&E's interest in the brewery resulted from a trade mission to South Korea in November by Gov. Parris N. Glendening and James T. Brady, secretary of the state's Department of Business and Economic Development.
Workers held out little hope that a deal could be reached. "We've been told that the talks broke off and that there are none scheduled," said Charles Stansburge, secretary treasurer of Teamsters Local 570, which represents most of the workers.
Frank said the state will offer help not only to A&E, but from other prospective buyers. "As long as we're in negotiations with companies, there's hope," she said.
Pub Date: 5/06/97
