Shepherd Neame, the Kent-based brewer and pub operator, is switching its distribution and warehousing services to another company in a 10-year deal it says will save the business £2 million a year.

More than 50 staff are expected to transfer to Kuehne + Nagel Drinkflow Logistics Limited (KNDL) but Shepherd Neame has warned of “a very limited number of redundancies.” The operation will continue in Faversham with Shepherd Neame retaining ownership of the warehouse site and management of customer services.

KNDL has been operating out of the Shepherd Neame Distribution Centre in Faversham for some time. The new deal combines the operation and gives KNDL responsibility for local and national drinks distribution, including to Shepherd Neame’s 350 pubs and hotels.

Shepherd Neame said the agreement would enhance the nationwide distribution of the brewery’s brands and allow the company to pursue trading and business development opportunities beyond its Kent heartland. It recently announced a push into North America.

Shepherd Neame has entered a period of consultation with 57 staff whose roles will transfer across to KNDL. It said a key consideration for both parties was maintaining as many jobs in Faversham as possible, "but some restructuring including a very limited number of redundancies is anticipated." The new deal is due to come into effect in October.

The cost of switching to the new logistics agreement, as well as a reorganistion of the Shepherd Neame business involving boardroom changes, will cost an estimated £1.7 million in financial years ending June 29 2013 and June 28 2014 but then provide annual savings of £2m.

Jonathan Neame, chief executive, said: “Our team does an excellent job, but good as they are, our logistics operation is subscale and restricts our ability to grow outside our heartland.

“This agreement enables us to exploit the national growth opportunities arising in our portfolio for brands such as Spitfire, Whitstable Bay, Asahi and Samuel Adams and also seek out international opportunities as we expand our exports following the completion of a recent distribution agreement into North America. This is a significant change for the business which was decided upon after very careful consideration of our options and the impact on jobs and our customers.”

KNDL managing director David Coulson added: "An important aspect of the proposal has been the continued operation of the existing facility in Faversham which will now be fully integrated into the KN Drinks Logistics’ national distribution network.”

Meanwhile, Shepherd Neame has reported a 3.3% increase in retail sales in financial year ending June 29.