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Viewing report
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Breweries & the Beer Market - Market Report 2006
Key Note Publications Ltd, June 2006
Beer is the most popular alcoholic drink in the UK, accounting for 48% of total spending on alcoholic drinks. The UK beer market was worth £20.14bn in 2005, 16.1% more than in 2001. The market divides into lagers (with 68% of the market value by 2005) and the domestic dark beers, such as ale and stout.
Pricing competition has intensified in the take-home channels for beer, whereas pubs and clubs, responsible for 84.2% of the market value, have been able to increase prices regularly.
Market share concentration is increasing, not only by brewer, but by brand, with giant brands like Stella Artois and Carling gaining share at the expense of lesser brands. Scottish & Newcastle (S&N) is the market leader, with 27% of UK beer sales, but the next three largest companies are all foreign companies: Coors of the US (owner of Carling lager), InBev of Belgium (Stella Artois brand), and Carlsberg of Denmark. However, globalisation works both ways, and S&N is itself a major multinational, as is UK-based Diageo (producer of Guinness stout).
The regional brewers remain important as guardians of British brewing heritage through thousands of local pubs, and `real ales' remain widely available.
The UK's per capita consumption of beer is not unduly high, despite media impressions of a binge-drinking culture, and the total volume of consumption is fairly stable over the long term. However, the trend continues from standard-strength beers to the more expensive, premium beers, helping the market value to grow.
The maturity of the market means that future changes are unlikely to be dramatic, although the new licensing regime for retailing alcohol — since 2005 in England and Wales — could influence the pattern of drinking significantly. On the supply side, governments are unlikely to allow further mergers between the major players.
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