Calcutta, March 6: United Spirits has shut down a bottling plant in Bengal citing space constraints for further capacity expansion.

The plant, located at Serampore in Hooghly district of Bengal on less than two acres, had a capacity to produce 70,000 cases per month of McDowell's Celebration rum and No.1 whisky.

In a letter to the Bombay Stock Exchange, the company said that manufacturing operations had been discontinued from February 28, 2015.

USL said all issues pertaining to employees had been amicably decided through a settlement in accordance with law. The factory had around 100 employees, including permanent and casual workers.

On February 27, the management asked all employees to sign a resignation letter.

The company the decision will not have any impact on its operations. USL has two more units in Bengal at Bhadrakhali (Hooghly) and Asansol.

According to industry officials, over the last few years, an upsurge of residential buildings, commercial establishments and a playground in the vicinity of the plant had made it difficult to expand.

Parimal Dalal, a permanent employee who has been working in the factory since 1991, said: "Operation at the plant was going through a tough period for a year, especially after Vijay Mallya sold out to Diageo. Production finally came to halt from January 19 this year. We got paid last on February 28. However, not all our dues were cleared. There is a meeting on Monday with the management on this."

However, union members said the management was not looking to continue operations at the plant. INTTUC leader Mantu Dutta said the plant did not have too many problems but the new owner was not keen to run the plant.

"We wanted to seek government's intervention. However, the management said there may be delays if we go to government. As a result, we did not go to the government," Dutta said. Serampore MLA from Trinamul Congress Sudipto Roy said he would meet the labour commissioner about the development.