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Breweries and the Beer Market Market Report 2001
Key Note Publications Ltd, January 2001
The British brewing industry is in the middle of the most significant period of restructuring in its long history. In 2000, the UK beer market was worth £16.42bn, a rise of 9.4% since 1996.
Regulatory measures introduced by the Government during the 1990s eventually persuaded two of the UK's five national brewers, Whitbread and Bass, to diversify further into hotels and other catering sectors by selling off their brewing divisions in the first half of 2000. Within the same dramatic 6-month time frame, the UK's largest brewer, Scottish and Newcastle, bought the largest French brewer, to become a European performer.
Meanwhile, the beer market has continued to shift away from its traditionally diverse pattern, in terms of products and brands, towards further dominance by a handful of heavily marketed, and widely distributed, international lagers or on-trade 'dark beers', such as Caffrey's (invented in the 1990s by Bass) and Guinness, the main stout. The leading lager, and an outstanding performer for many years, has been Stella Artois, the flagship brand from Interbrew, the Belgian company that bought Whitbread's brewing division (having previously used Whitbread as its UK distributor).
The shrinking range of available beers has made life difficult for the UK's regional brewers. Some have given up brewing, while others, such as Greene King (producer of popular traditional brands, such as Old Speckled Hen and Ruddles), have merged into larger units. However, there is also speculation over the future of many of the nationals' domestic beer brands, with the market leader - Scottish and Newcastle - intent on building an international structure based on its newly acquired Kronenbourg lager brand, and much of the brewing industry coming under foreign control.
In contrast to the profound supply-side changes, the beer market is a mature, static one, dependent on conditions such as heatwaves or football tournaments to boost growth significantly. In 2001, the immediate future of the market depends on the outcome of a government decision to force Interbrew, which bought both Whitbread and Bass Brewers, to dispose of Bass Brewers. Also up for sale in mid-2001 is the largest of the regionals, Wolverhampton and Dudley.
Key Note forecasts that the UK market for beer will increase in value by 8.8% between 2001 and 2005.