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Viewing report
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Breweries and the Beer Market Market Report 2002
Key Note Publications Ltd, Jan 2002
The UK beer market was worth £16.75bn in 2001. Despite the `lager lout' image of the British presented by the media, the UK's per capita consumption of beer is not unduly high and it is certainly not increasing, although the trend is from standard-strength beers to the more expensive premium lagers, helping the market's value to grow in most years. Price competition has intensified in the take-home channels for beer, whereas pubs and clubs, responsible for more than three-quarters of beer sales by value, have been able to increase their prices regularly. Economic confidence underpins this trend, together with the higher demand for premium beers.
Beer accounts for nearly half the UK's expenditure on alcoholic drinks. This is a slightly lower share than in the past, but overall demand is essentially stable it is the market's subsectors that are seeing dynamic changes. Premium lager has been the main growth segment since 1997, led by a handful of heavily advertised foreign brands. Chief among these has been the Belgian brand Stella Artois, whose owner, Interbrew, acquired two of the UK's former major brewers, Bass and Whitbread, in 2000.
In 2001, anti-monopoly rulings forced the sale of most of the Bass brands to Adolph Coors of the US. In addition to Interbrew and Coors, Carlsberg and Anheuser-Busch - owner of Budweiser, the world's largest beer brand - are active in the UK, so more than 50% of British brewing is now in foreign hands. There are still over 50 substantial regional brewers, producing traditional ales, but their long-term prospects are uncertain, and mergers or withdrawals from brewing (to concentrate on running pubs) have become commonplace.
Under the brewing industry's new ownership structure, the number of companies and brands is likely to contract, but this will reflect global trends. The largest British brewer, Scottish and Newcastle, has itself expanded dramatically, buying the largest French brewer (Kronenbourg) and other European interests, and, in 2002, negotiating deals that would make it a major force in the Russian and Indian markets.
Although the international lager brands continue to take market share from domestic beers, and the brewer-tied pubs are no longer as influential as they were, traditions die hard in the beer market. Nearly half the male population of the UK still drink ale, bitter or stout (even though as youths they may have drunk lager or cider), meaning that millions of mature consumers still come to appreciate the acquired taste of British beer in the traditional pub.
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