Beerage set for shake-up as S&N eyes Courage

BY JOHN SHEPHERD

The brewing industry is on course for a big shake-up with Scottish & Newcastle yesterday confirming that it was negotiating to buy all, or part, of Courage. At the same time, Whitbread provided a taster for the radical changes ahead in the pub market by announcing the planned opening of 50 "super-sized" Brewers Fayre outlets.

S&N declined to comment further, although sources said that there were still many loose ends to tie up before a deal could be struck. Several involve complications over ownership and production of beer brands, such as Courage's current agreement to brew Budweiser in Britain for Anheuser Busch, the US-based and largest brewer in the world.

A complete takeover of Courage could cost upwards of £500m, and would make S&N the biggest operator in the domestic market. Courage is second- largest with a 19 per cent market share and S&N is fifth with about 12 per cent.

Industry analysts said S&N was unlikely to be allowed to buy all of Courage because the joint market shares exceeded the monopoly benchmark of 25 per cent. They believe S&N will acquire most of Courage's breweries, some of its beer brands, but not its 50 per share in Inntrepreneur, the 4,350- strong chain of pubs owned jointly with Grand Metropolitan.

Talks between S&N and Foster's, the Australian owner of Courage, have been taking place for at least 18 months. A big hurdle in S&N's long takeover path was cleared earlier this month when Whitbread, the fourth-biggest UK brewer, dropped a separate bid for Courage.

Few in the brewing industry believe that the purchase of a large part of Courage by S&N would be bad news for other brewers. The industry is lumbering along with a large overcapacity problem, and at the same time beer consumption continues to decline.

Britain's brewers can now produce an extra pint for every four they can sell. Consumption has dropped to levels last seen in the 1960s, and continues to fall as a consequence of the decline in heavy industry, rising beer prices, and changing lifestyles. The industry has also been hit by the surge in personal imports of cheap beer from France, last estimated at 1 million pints a day and rising.

All the big brewers have cut back on capacity by closing at least two breweries each in recent years. However, there are no signs that any of the big five brewers will break ranks and unilaterally take further capacity out of the system. The over-capacity problem also continues to be exacerbated as the regional and other smaller brewers catch up with advances in technology.

Amid this, the beerage is adapting to rapidly changing consumer needs. The traditional male haunt of the boozer is steadily being replaced by pubs, driven by food sales and targeted increasingly at the family. A multitude of leisure concepts is also being rolled out. Typically, they comprise pubs with adjoining bowling alleys and small, low- tariff hotel facilities.

All of this is putting pressure on the small independent publicans, who are finding it increasingly difficult to compete with the financial muscle of brewing groups and big pub chains. Too many pubs are chasing too little business. One in seven of the UK's 70,000 pubs will close in the next few years.

Outlook, page 25

PROMOTED VIDEO
News
video
Life and Style
tech
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
film
Arts and Entertainment
Up my street: The residents of the elegant Moray Place in Edinburgh's Georgian New Town
tvBBC's The Secret History of Our Streets reveals a fascinating window into Britain's past
Extras
indybest
News
Albus Dumbledore, the headmaster of Hogwarts School of Witchcraft and Wizardry has been the teaching profession's favourite teacher
education
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
sport
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sport
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Sport
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Junior Research Analyst - Recruitment Resourcer

£18000 - £20000 per annum + OTE £25K: SThree: SThree Group has been well estab...

Senior Analyst - Financial Modelling

competitive: Progressive Recruitment: This really is a fantastic chance to joi...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform