Smaller rival attacks Bass policy of discounting

BASS, the UK's biggest brewer, yesterday came under fire from the much smaller Wolverhampton & Dudley Breweries over its decision to engage in an all-out fight for market share, writes John Shepherd.

The fight revolves around deep discounting of wholesale beer prices. Some publicans are said to have been offered discounts as high as pounds 100 a barrel by some of the big brewers.

David Thompson, managing director of Wolverhampton, said: 'If big competitors like Bass go for market share it just creates a higher expectation among retailers that they are going to get better terms. Quite clearly they (Bass) have made plain that they are not going to lose business. They are discounting to maintain market share.'

He warned the fight would probably end only if 'somebody retires hurt - and it has to be one of the big boys. It is difficult to see the logic of a market share battle to the death'.

Bass, he added, was being very aggressive in the Midlands, where it already held 45-48 per cent market share. Wolverhampton, one of the larger regional breweries, has about 2 per cent of the national market.

Wolverhampton's criticisms accompanied results for the six months to 28 March. Pre-tax profits were a shade higher at pounds 16.7m against pounds 16.5m. The company's 939 pubs, eight hotels and 38 restaurants turned over pounds 107.3m, up from the comparable period's pounds 101.9m. Earnings per share were static at 17.7p, but the interim dividend was lifted 9.3 per cent to 4.7p.

David Miller, chairman, was cautious about economic recovery. He said: 'Volume trends are not discouraging but, if it was bleak in December, it is still pretty chilly in May and likely to stay that way.'