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Scottish & Newcastle (S&N) is to close its brewery in Reading by early 2010 in a bid to save the company £13 million a year.

The Berkshire Brewery site employs 362 people and produces S&N brands Foster's and Kronenbourg 1664.

S&N group operations director, Stephen Glancey, said: "It is well documented there is general over capacity in the UK brewing sector, and these proposals have been put in place to address this issue.

"The nature of the Reading site, the amount of investment required to make it competitive and its relative cost compared to other UK facilities means there is a strong business case for closure."

The company, which recently agreed to a takeover from Heineken and Carlsberg, said closure is the "only viable option going forward" and it would seek alternative employment for those affected.

But Iain MacLean, from Unite, said the union would fight the move.

"We are outraged by this decision," Mr MacLean said.

"Staff are still reeling from the effects of previous job cuts.

"There seems to be no logical business rationale behind this decision."

The company plans to transfer residual brewing and packaging work progressively to other S&N sites including Tadcaster in Yorkshire, the Royal Brewery in Manchester and Dunston, Gateshead.