ALE Spring 2000 No. 297

Industry Watch

The Web version of ALE 296 had a major feature on the state of the industry, Industry Watch. This takes the story forward...


After all the recent fuss over Bass's token committment to real ale, the Bass brewing division is for sale for at least 1.8B, with Interbrew, Heineken, Anheuser-Busch and South African Breweries amongst the bidders. Bass wants to concentrate on its pubs and hotels, having just rebranded its Holiday Inns as Crowne Plazas. This stripping down is an industry trend: others gone this way include Greenalls and the Swallow Group (subsequently swallowed by Whitbread and Pubmaster - see Footnote).

There are strong rumours that Interbrew of Belgium also wants to buy the Whitbread Beer Company, which has been positioned for possible sell-off for some time, leaving Whitbread as a hotels and leisure company. Interbrew would combine the Bass & Whitbread operations and end up with about 35% market share. Meanwhile Whitbread thinks it's spotted a new niche in the market: people of age range 26-35, middle-income, no ties, want to be in town centre action but have outgrown young persons' venues. So it's planning to spend 40M on bars, restaurants and late-night comedy/music venues.

Conversely Scottish & Newcastle are selling leisure interests such as CenterParcs and Pontins to concentrate mainly on brewing and budget hotels. (If only they really would concentrate on brewing and produce some high-quality draught beers!) They've taken a major stake in the French Danone group's brewing interests, including Kronenbourg.

The Wolverhampton & Dudley take-over of Mansfield Brewery has essentially gone through. The first action of W&D was to announce 250 redundancies and they say the brewery is safe for only two years. The legal challenges to some of the share sales seemed to have failed. Meanwhile W&D replaced the popular Marston's Bitter by the likes of Bank's Bitter in many of its newly-acquired pubs, causing deep resentment in communities and a drastic drop in sales. Similarly Pedigree has displaced some Mansfield beers. By mid-March campaigning by CAMRA and locals persuaded boss David Thompson to relent and pubs whose trade has suffered can now order Marston's Bitter again.

Punch, Bass and Scottish & Newcastle seem to have gotten off lightly as regards their recent takeovers, only being forced to make modest concessions. The Government is starting to enforce a new rule at takeovers that no company may have more than 25% of tied pubs in any licensing area. This may be applied to Greene King, for instance, the next time it takes over a pub chain.

Brewing equipment from the former Courage Bristol Brewery has reportedly been taken away by a large Russian container ship.

Sadly King and Barnes (Horsham, Sussex) have given up the struggle to remain independent and have sold out to Hall & Woodhouse (Blandford, Dorset). After this, the boss of the original predator for K&B, Shepherd Neame, was quoted in The Times as saying he would have closed the K&B brewery, in spite of previous claims that Sheps needed the spare capacity. Greene King were rumoured to have been interested too, presumably because they have to be seen to be keeping up with W&D's growth. The K&B brewery is expected to close once H&W have managed to "duplicate" brands at Blandford. It's the 55 pubs that are seen as valuable.

Hereditary Beerage?

How the mighty have fallen. Allied Domecq, S&N and Whitbread have been displaced from the FTSE-100 index of major UK companies by "hi-tech" stocks such as Freeserve. Yet AD (for instance) is making more profit than the nine new FTSE companies combined. Similarly Greene King has been ejected from the FTSE-250 index of the next 250 companies.

Beer Brands

[As quoted in the Licensee 29-Nov-1999]

Adnams commissioned a big study on beer branding and consumer choices in pubs, with these conclusions:

This no doubts helps Adnams' case as a founder of the Cask Marque scheme.


Footnote

On 16th May 2000 Whitbread announced it was selling Swallow Inns (including 183 pubs) to Enterprise Inns for 119M cash.

Earlier stages of the asset-stripping saga:


ALE Spring 2000 No. 297 : Next section
Cambridge & District CAMRA