In a quite astonishing spat, JD Wetherspoon has with immediate effect, ended its contract with Heineken to supply a number of drinks brands including Heineken and Foster's Lagers, Strongbow Cider and that old JDW favourite, John Smith's Smooth.They have been trading partners for 35 years, so how has this come to pass? Well since JDW ruffled feathers in Ireland by daring to open a pub in Dublin, things have been a bit tetchy over there. First of all Diageo, owners of Guinness, were booted out (or rather were never booted in) as JDW refused to pay what they saw as an inflated price for the black stuff. JDW turned to Murphy's Stout made by Heineken and things sailed along nicely, though under the surface, all was not well it seems. Wetherspoon now intend to open a second pub in Ireland and looked to Heineken to supply it, but there has been a spectacular disagreement. According to the BBC and other identical statements elsewhere, Heineken wanted to make the CEO of JDW, John Hutson, personally liable in case of a default on any debt, though why they should do so is a bit of a mystery given JDW's £80 million annual profit. Wetherspoon has basically said and I paraphrase; "Well, stuff you then - take your scabby products out of our nice pubs!"
Now that would be bad enough if this sanction just applied to Ireland, but JDW has effectively said "Get Lost" to Heineken for all of their 900 plus pubs in the UK, blowing a £60 million account out of the water. Someone has misjudged the moment. Or maybe more than one someone. In a somewhat pained manner Heineken UK said "
"Heineken UK has had a long standing and successful relationship with JDW in the UK market over a 35-year period, and it is unfortunate that commercial issues in Ireland between Heineken Ireland and JD Wetherspoon have led to the current situation. We are seeking a resolution as soon as possible."
Well I bet they are. To lose one account is unfortunate, but to lose 923 all at once is certainly careless, especially when you have been shafted by your Irish compadres. There is of course more to this than meets the eye with JDW undercutting the price of a pint of Heineken by up to €2 and the evil eye of Irish publicans being cast upon Heineken for that reason. Given that JDW has plans for up to 30 pubs in the Republic, this may well be somewhat of a test case, though I doubt that Heineken foresaw the eventual outcome and I very much doubt that this is the end of the matter. It is hard to see how Heineken can do other than to back down as JDW can undoubtedly get beer elsewhere. There will be further repercussions too likely as not, but it is nearer home to which we must in compassion turn. Nobody in this sordid tale seems to give a monkeys chuff for those most affected, the Nine in the Morning Club. What are they going to do without John Smith's Smooth? Ruddles just won't cut it.
Sadly it is always the least fortunate in our society that suffers when the big boys fall out.
On a more sombre note, this does show that when big business falls out, who knows where it all might end? Heineken is the world's biggest family owned brewer.
16 comments:
Very interesting story - has Timbo cut off his nose to spite his face or called Heineken's bluff?
I'm sure Spoons will easily be able to find replacement products for the Heineken ones. Given their existing tie-in with Carlsberg, I wouldn't be surprised to see Tetley's Smooth replace John Smith's. But JS does have a very loyal following...
Ho, ho, ho!! Love it when the big boys fall out.
No loss there, and as for the Nine in the Morning Club, most of them in my local Spoons drink Stella with their bacon sarneys, anyway. Hardened piss-heads here in the "soft south", have more discerning tastes, don't you know?)
Pewr oul Murphy's. I'd say that Beamish will probably be missed more, and not only because it's already the choice of the value-conscious consumer.
It's interesting that both Diago and Heineken are two companies that invest most in brand value and Spoons is the chain that does most to devalue it.
I guess who has the power depends on that brand value. Whether the punter in the UK and Ireland will pay top dollar for the brand or choose a cheaper substitute.
Spoons have been here with both Carling and Greene King IPA. In the former Spoons relented, brought it back and now price it at the upper end of the lagers. In the case of IPA they accepted a budget bitter off the brewery they could discount.
Interesting that Heineken is popular in Ireland. It is a strong global brand though we don't see that in the UK.
My estimation of JDW has suddenly shot up ! Heineken and their ilk are all that is bad in this world of big business corporate shite midden pile. I fuckin hate the lot of em. Although some see JDW as being the `enemy` as regards to them being part of the `establishment` and being detrimental to the local boozer ethos, they DO at least promote and sell locally brewed ales. This week, at least, I doff me flat cap to `em...
The de-listing of Heineken products means JDW has opted not to sell four locally brewed beers, and I'm hearing today that they'll be replaced with foreign ones. So in Ireland at least, that's not the case.
The Beer Nut, with all due respect, I am English, living in England. So frankly, what happens in the Republic of Ireland (a foreign country), does not bother me. When I go to my local spoons, I will be guaranteed at the very least one locally brewed real ale. That is what bothers me..
Fact is here in Ireland 'spoons are terrifying publicans who are vehemently opposed to cheap food and drink.
In fact they're vehemently opposed to anything that encourages the pub experience being dragged kicking and screaming into the 21st century.
My eldest son and his friends can't wait for the Cork 'spoons to open,reasoning they'll at last have somewhere to go before clubbing that they can afford to drink in,isn't an old person's pub and doesn't have TV sport on at a high volume.
All power to Timbo's elbow.
The land of the bogs and the little people in the 21st century? Lore and begora, is the world ready?
Diageo investing most in brands? Pull the other one. They may still make expensive ads for Guinness but, in reality, they price it to national accounts cheaply (whether by retros, listing allowances or whatever) to enable them to shovel it out cheaply, whilst cutting back any support for the independents.
I run a large sports bar in the Midlands and supposedly have a contract with Diageo guaranteeing marketing support,myet I have to plead for basic stuff whilst Spoons, Yates,nAmber Taverns etc are all swimming in advertising support for televised sports and they can sell Guinness under £3.
I agree with the poster highlighting Spoons support for smaller local brewers. They are very hard to compete against but by no means a bad thing for customers.
Heineken have now backed down, but as 'Spoons board voted to ditch them, we must now wait to see if they are reinstated. JDW might be flexing their corporate muscles, presumably in search of a better price.
Here in the Thames Valley, the Nine in the Morning Club drink of choice is Carlsberg. But the big day on the horizon isn't Christmas Day - it's 2 January, the first day of the 'Spoons January sale.
Not to mention the first day you can start using the beard club vouchers again.
JDW unconcerned about the lack of product from two largest multi-nationals in Ireland and pressing ahead with expansion plans.
http://www.irishtimes.com/business/agribusiness-and-food/jd-wetherspoon-to-open-hotel-bar-at-homeless-hostel-in-dublin-1.2038197
But unfortunately, one can not usually use a beard voucher against a pint that is already discounted in the sale.
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