Sussex cider company Merrydown is to close a factory in the village where production began more than half a century ago

About 35 staff will lose their jobs when the site in Horam, near Heathfield, shuts at the end of the year.

Merrydown, which makes the Shloer soft fruit and Merrydown cider brands, described the decision to end its historic link with the village as painful.

The group began in 1946 when its founders set up the business at a cottage in Horam.

The first batch of Merrydown Vintage Cider was fermented from 450 gallons of apple juice and production rose to 400,000 gallons by 1955.

Villagers, who make up half the workforce, were shocked by the news. The site will probably be used for housing.

Chief executive Nigel Freer said: "Given Merrydown's history in Horam this is a painful decision which has not been taken lightly.

"But in the final analysis, we believe this is the best use of assets and concentrates our resources on the strategy of managing our brands."

Graham Knight, vice chairman of Horam Parish Council said: "This has come as a surprise.

"There were rumours that a housing association had been shown round the site but nobody expected the factory was to close.

"It will affect the village. It is a sad day for Horam."

Further investment in the Horam factory had been considered but was ruled out due to the site's manufacturing capacity limits.

Merrydown will now move its offices out of Sussex to Reigate, Surrey, where the Shloer management team is based.

Production will be moved to a number of sub-contract manufacturers.

At its peak, the Horam factory employed more than 125 and visitors from all over the world were shown round.

The company hit the jackpot in the mid-Nineties when it became the first drinks company to successfully market alcoholic soft drinks, which became known as alcopops.

The alcoholic lemonade Two Dogs became an instant hit and in 1995, profits of Merrydown trebled.

Turnover reached £19.5 million in 1997 and then slumped to £11.5 million in six months, turning healthy profits into losses of £944,000 and forcing Merrydown to axe staff and cut production.

It sold its Two Dogs brand to go back to making good quality cider and apple juice.

Merrydown made a profit of £1.7 million in the last financial year.

Chris Carr, managing director of the cider division said: "Obviously we will be sorry to lose our long association with Horam and it is very sad for Merrydown staff, who have done so much to make the company the success it is today.

"Residents will probably welcome the reduction of noise from 24-hour production and lorry movements."

He said residential planning permission will be sought to maximise the value for shareholders of the seven-acre site in the centre of the village of Horam.

Friday July 16, 2004