Giant Eagle Shutters Beverage Plant

MARK HAMSTRA

LATROBE, Pa. — Giant Eagle has closed a beverage bottling plant here that it had acquired after a controversial bankruptcy auction in 2007.

Pittsburgh-based Giant Eagle had been using the 300,000-square-foot Chestnut Ridge Beverage plant to produce bottled water and iced teas for its stores, according to reports.

“As part of ongoing efforts to remain healthy as a company and offer our customers the best possible value, Giant Eagle is committed to maximizing cost efficiencies, reducing overhead costs and streamlining its supply chain,” Giant Eagle said in a prepared statement. “In accordance with this strategy, the company has made the difficult decision to cease operations at its Chestnut Ridge Beverage facility.”

The closing will impact 86 positions at the plant, Giant Eagle said.

According to a report in the Pittsburgh Tribune-Review, Giant Eagle has been in negotiations to sell the facility to Castle Co-Packers, a bottler based in Kensington, Pa. Neither Giant Eagle nor Castle could be reached for comment.

Brian Dworkin, president and chief executive officer of Castle Co-Packers, told the Tribune-Review that talks concerning his company's acquisition of the facility had been ongoing for “a couple of months.”

Giant Eagle acquired the plant for a reported $22.3 million after the bankruptcy of beverage concern LeNature's. Although the supermarket chain had originally outbid beverage giant Cadbury Schweppes for the plant, the bankruptcy court found that Giant Eagle had unfairly influenced the bidding by threatening to pull Cadbury Schweppes products from its shelves.

The court then awarded the plant to Cadbury Schweppes, which in turn sold it to Giant Eagle.

“As the beverage industry continues to evolve, the company has needed to meet a number of challenges, some of which were unexpected,” Giant Eagle said in its prepared statement.

It was unclear how much product the plant was producing or if it ever began to sell product from the plant to other retailers, as was originally envisioned.

Giant Eagle said it was “working closely with its supply partner community to limit any potential impact from this closure on its in-store product offering.”

Giant Eagle operates and licenses nearly 400 stores.