Global Giants Stalk British Beer

January 1, 2002 By Roger Protz

The PC’s thesaurus has come up with a magnificent silver dollar word. There I was, struggling with mess, muddle and botched, and all the while, a far better term was waiting for me: discombobulated. It sums up beautifully the state of the British brewing industry following a ruling by the Labor government.

Last year, the Belgian group, Interbrew, best known for Stella Artois lager, bought the brewing interests of both Bass and Whitbread. This gave Interbrew a 40 percent share of the British beer market, placing it outside the rules laid down by successive governments, which say that a 30 percent share represents a monopoly.

The government told Interbrew to sell off Bass Brewers. Interbrew went to court and the government’s Department of Trade and Industry was told it had been unfair to Interbrew and had to revise its proposals.

After much navel contemplation, the DTI announced in October that it was offering Interbrew two options: either dispose of Bass Brewers in its entirety, or sell off several leading Bass brands and breweries. Not surprisingly, Interbrew plumped for the least-worst option and is now putting together a plan to dispose of Britain’s leading lager brand, Carling Black Label (which orignated in Canada), other lagers and ales, and breweries in Burton-on-Trent, Birmingham, Hampshire and Yorkshire.

This will leave Interbrew with a market share of around 16 percent, while a new company, Carling Brewing, will have around 18 percent. Two things are wrong with this government copout: only another global giant will have sufficient cash to buy Carling Brewing; and we face the absurdity of a great caskconditioned ale, Draught Bass, being owned by Interbrew but brewed under license in Burton by whoever buys Carling. As Interbrew acknowledges, you can’t remove Draught Bass from Burton, the historic home of pale ale brewing, without the beer losing all credibility.

The Contenders

The key question now is: Who will fork out a billion dollars for Carling Brewing? Anheuser-Busch can be ruled out, as the American giant wouldn’t want a brand that competes head-on with Budweiser in Britain. The likeliest contenders are Heineken and South African Breweries. Heineken is deeply unhappy with its present position in Britain. For years, Whitbread has brewed the Dutch brewer’s lagers under license. But Whitbread is now part of Interbrew, and Heineken is furious that its beers are controlled by its fiercest European competitor.

Heineken will remove its brands from Interbrew one minute after the current agreement runs out. It will need a brewery of its own in Britain. It may, however, balk at buying the entire Carling Brewing Co. since, like A-B, it would find itself owning Carling and another “Dutch” brand, Grolsch, bought by Bass some years ago.

This could bring South African into play. Despite its name, it is now registered in Britain and has its headquarters in London. It owns the world’s greatest lager beer, Pilsner Urquell, and is making a determined push in Britain. As its own brands, Castle and Lion, have failed to take off in Britain, it might see Carling as a springboard to success.

Scottish Courage

It’s all confusing and disruptive. Whatever the outcome, there is no comfort for beer drinkers. The global giants will get bigger and tighten their stranglehold on British brewing and pubs.

It’s enough to make a chap head for the pub and get totally discombobulated.

When Bass Brewers has been hived off, Scottish Courage will once again become the biggest British brewer, with around 29 percent market share. In the summer, ScotCo invited me to Edinburgh for the launch in Britain of the Grimbergen abbey beers from Belgium.

I never say no to visiting the Scottish capital, one of the loveliest cities in Europe, especially when somebody else is picking up the tab.

I not only tasted the Grimbergen beers but also met the Abbot of Grimbergen, in his stunning white robes, and other monks from the order. In common with Abbey beers, Grimbergen brands are not brewed by the monastery but are produced under license by a commercial company, in this AIken Maes.

ScotCo’s interest lies in the fact that when it bought Kronenbourg earlier this year from the French group, Danone, it also acquired the Belgian Alken Maes breweries. Grimbergen Blonde and Brune are pasteurized ales and so lack the full, rounded complexities of bottled-fermented Trappist beers. Nevertheless, I much enjoyed their rich fruity flavors and spicy/peppery hop character. They bring a new dimension to beer pleasure in Britain.