Scottish & Newcastle brew up claim against PwC

and Newcastle
 is waging a legal battle against PwC, alleging that the firm’s
management consultancy advice led to the brewer issuing a damaging profits

The claim was filed last year, in relation to PwC’s advice on the
restructuring of supply arrangements at the brewer’s UK-based Scotco subsidiary
between 2001 and 2003. 

PwC was first retained
in 1998 to consult on a strategic review of the brewer’s Scotco supply chain,
which led to designs for a ‘radical restructuring’ over the course of four to
five years, court documents outlined.

Europe’s second most profitable drinks business has claimed that associated
costs of the restructuring spiralled, forcing them to issue a profits warning
which led to a share slump. S&N alleged it was told that the scheme would
generate annual revenue savings of £35m per year by year four, but the brewer
abandoned the operation after the costs rocketed.

S&N drafted in PwC at a cost of about £10m for the advisory work, the
 FT reported.

PwC said of the action: ‘We believe it is unfortunate that this has come to
litigation. It would be inappropriate to comment further.’ 

Related links:

Moore Stephens facing £90m claim 

Ferox suing E&Y for early filing of its accounts 

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