Thwaites Brewing Division Takes The Knock

Marstons have bought Daniel Thwaites Brewing Division it was announced today:

Marston’s buys Daniel Thwaites brewing division operation:Marston’s has reached agreement with Daniel Thwaites to acquire the trading operations of Thwaites’ beer division. The acquisition includes two leading, premium brands: Wainwright and Lancaster Bomber ales. The total cash consideration is £25.1 million excluding working capital. Marston’s has been brewing Thwaites’ beers since early 2014. As part of this acquisition, it has entered into a long-term exclusive agreement to supply all beer, wine, spirits and minerals to Thwaites’ pub estate. Thwaites’ beer division is a high quality sales business of scale concentrated in the North West of England, including a 150-strong team of regional sales, marketing and distribution staff operating in the Independent Free Trade, National On Trade and National Off Trade channels. The business has shown good growth in recent years, including the acquisition of Hydes Brewery’s free trade business in 2012, which increased Thwaites’ business in Manchester. Thwaites’ two principal beer brands are Wainwright, one of the most popular golden cask ales in the UK and Lancaster Bomber, a premium ale. Both brands have won numerous awards in recent years and are highly complementary to Marston’s market-leading portfolio of premium craft and bottled ales. This acquisition is consistent with Marston’s brewing strategy to focus on popular premium ales with local and regional appeal, and provides an opportunity to capitalise on the developing free trade market and wider consumer interest in the beer category. The transaction is expected to complete on 17 April 2015. In the 12 months to December 2014 Ebitda is estimated to have been around £7 million before overheads of approximately £2 million. The acquisition is expected to be earnings-enhancing in the first full year of ownership; in the current financial year it is estimated that the contribution to profit before taxation will be around £1.5 million. Ralph Findlay, chief executive of Marston’s, said: “I am delighted to welcome our new colleagues to Marston’s. We are acquiring a very high quality business with good people and brands, and with growth potential. The acquisition is consistent with our beer business strategy to focus on local provenance and premium brands, and provides opportunity to capitalise on the developing free trade market and increasing consumer interest in the beer category.”

While extremely disappointing news in some ways, this hardly comes as a shock to those of us in the North West.  The writing has been on the wall since Thwaites first of all announced several years ago that it would move out of the Star Brewery Blackburn to a new green field site and sell the existing site to Sainsbury's. Years then passed with no progress and in 2012 the brewery was closed as "obsolete" without finding a new one.  With the exception of Crafty Dan brands, the beer was outsourced to, yes, you've guessed, Marstons. Thwaites then announced a new brewery after all and then maintained a deafening silence on the whole matter. I wrote about the brewery here in less than glowing terms and here in a lot more positive ones.  Seems my enthusiasm was somewhat misplaced. Thwaites will continue as a Pub and Hotel Company though one has to wonder for how long?  The record of such Pub Companies is quick demise though admittedly these are changed times, so who knows? Maybe it is a smarter move than it first appears?

However, oddly, it seems that all is not lost brewing wise.  According to the Wolverhampton Express and Star (Thwaites beers are largely brewed in Wolverhampton by Banks')  "Thwaites has retained ownership of craft beer brands and other cask ale brands, including its seasonal ale range, which it will continue to brew and sell in its’ own properties. Daniel Thwaites’ chief executive Richard Bailey said: “This is a very exciting development which allows us to focus on our pubs, inns and hotels, whilst retaining a small brewery to continue to supply our own properties with our fantastic beers and opening up a wider drinks range to our customers through a long term supply deal with Marston’s.

So as you were in some ways, though where these beers will be brewed isn't clear.  We'll have to wait and see.

It is odd that Thwaites refer to their beer brands as "Third Party Brewing Business". Well they are now I suppose.

More Trouble Brewing

Cain's of Liverpool has had a somewhat chequered history since taking over the old Higsons brewery in Liverpool.  I have written about them before.

Yesterday I mentioned them as one of the UK's leading brewer's of low margin supermarket beer in the context of Thwaites leaving that market.  Today I learn by a phone call from a brewer friend that more trouble has ensued.  The Liverpool Echo tells me that with immediate effect that Cain's are ceasing their brewing of supermarket beers as they incur a loss.  38 jobs will go.  Those of us who follow Cains will doubt, despite assurances that the rest of the operation and pubs aren't affected, that this will be the end of the matter.

But we'll have to wait and see,  One thing is for sure as former employees head to the Jobcentre.  Supermarket own brand beer comes at quite a price despite its cheapness.

The Echo story can be read here.

As You Were at JDW?

A little bird tells me that Greene King IPA will shortly replace Ruddles Best on their bars, presumably with the happy agreement of GK.

I know most of you, like me won't be bothered either way, but I just thought I'd let you know.

Cains in Trouble Again?

It seems the RC Brewery in Liverpool, formerly Robert Cain and Company may be in difficulties again. This follows a loss of £896,000 and warnings about cash flow from their auditors. I won't write further about the circumstances, as the Publican fully covers it here.

My particular interest in Cain's is as a former Liverpool resident and of course, the fact that this was Higson's Brewery in the past. I do hope this wonderful brewery survives. Whatever you think of the owners, the Dusanj brothers, they are a wily pair who will no doubt be working on a solution, but if you care as I do about the magnificent brewery itself and cities such as Liverpool having its own large commercial brewery, you better start crossing your fingers.

I have written about this company in the past, notably here and here.

Dying Brands up for Sale

It seems that AB InBev are putting the brands Bass, Boddingtons and Flowers up for sale. The Morning Advertiser has the story here. While no-one in their right minds gives a monkey's chuff for any of them, discredited and unloved as they have become, there is a potential fall out for the regional brewers that brew them for AB InBev. Hydes of Manchester who brew cask Boddingtons, could be a potential victim of this aspect, though that is speculative at the moment.

The problem may be in finding a buyer despite the rumoured low price of £10 - 15 million, especially as the sale of Bass will exclude both the trademark and international rights, including lucrative exports to America, where the beer is still very popular.

Somehow I doubt that anyone will want to cough up for them. They are unloved and almost forgotten and I doubt if they can be revived. Their heritage and history have been destroyed long ago.

It isn't a Pub Stupid

Mitchells and Butlers, the Midlands based, er, um, well, Pub Company, sort of, has been outlining a new strategy. It seems they don't run pubs any more, but " licensed catering outlets". One journalist was even bollocked for calling these um, er, thingies, pubs.

Of course if you look at the "brands" they intend to concentrate on, they are right. Harvester, Toby Carvery, Crown Carveries, Vintage Inns, Sizzling Pub Company and Premium Country Dining are the future of M&B it seems. Wet led pubs will be sold to pay for more of these. They'll clearly have to change the name of the "Sizzling Pub Company" to " The Sizzling Licensed Catering Outlet Company" of course, but once that's sorted, it's job done.

Don't know why they bothered making a point of it. Nobody in their right minds would call that lot pubs anyway.

Confused Carling Quits Old Firm

One of my vestiges of Scottishness is that I buy Scotland on Sunday, the Sunday paper of the Scotsman Group every week. I usually get round to reading it sometime towards the end of the week, but had read it yesterday, apart from sport and business. I read them this morning over a pot of tea. The business section was headlined by the news that Molson Coors is ending its £2.2 million a year, seven year sponsorship of Rangers and Celtic. Paul Miller, director of sales for Molson Coors Scotland, said Scottish legislation was "difficult to understand" and interpret.

It seems this relates mostly to promotion and sales of the ubiquitous lager, predominantly in the off trade, but in pubs as well, as Scottish Government legislation disallows promotions that encourage increased drinking. Bit of a bummer that for the promotions team, I'll bet. A perplexed Miller said "that the group struggled with the impact of promotion of alcohol in "on trade" pubs. If a promotion offers someone a free pint of beer, is that encouraging someone to consume more than they would otherwise consume? I guess the answer would be yes. But curiously, to the letter of the legislation, it doesn't. That is the difficulty, to understand what can and can't be done. The important thing for us is we don't contravene the spirit of the legislation."

Well Mr Miller, I'm no lawyer but I'd have thought the important thing is not to break the actual law. The law's spirit is quite a different matter, but nonetheless, it's a point that does have some resonance. When CAMRA offered its 50p off a pint Wetherspoon's vouchers to members, initially they were not valid in Scotland until advice was sought, so it isn't straightforward. Of course you could just be a cynic and reckon that after seven years, Coors had got all it could out of the deal and has decided that blaming the law is a little easier than to say that we've had enough and that no-one much in Scotland drinks Carling anyway. (Tennents has 55% of the on trade and over 60% of the off). I can't find figures for Carling.

Mr Miller also took the opportunity to confirm that Molson Coors supports minimum pricing, following some inaccurate press reports that they did not. A spokesman for the Scottish Government said its policies on minimum pricing and the promotion of alcohol were "not mutually exclusive" and its legislation was "not anti-alcohol". So there you have it.

Oh and guess who is sponsoring the Old Firm now? You are way ahead of me aren't you? It's Tennents Lager of course. Tennent's Irish owner C&C said it was confident its approach to sponsorship was in line with government objectives. So there.

My thanks to SoS for this interesting piece. Click the title to go to their report.

On Trade Bears Brunt of Sales Slump

Sales through the off-trade fell 3.1% in 2009, the biggest decline since records began in 1978, according to the British Beer & Pub Association (BBPA). However, the decline was less than that experienced in Britain’s 54,000 pubs where sales fell 5.2%, contributing to an overall reduction in beer sales of 4.2%.

Still there is a silver lining in this cloud in that the decline in beer sales is slowing. The BBPA has revealed details of its Quarterly Beer Barometer which shows that while sales are still declining the rate of fall has dropped. For the last three months of 2009 sales were down 3.6 per cent – the lowest fourth quarter fall since 2006.

This of course could all be derailed by duty increases and increases passed on to the drinker by PubCos and brewers. In my own neck of the woods, beer sales as in "money off" are appearing, but one thing the figures show is that the recession has affected even cheap at home drinkers and shows that to some at least, at the poorest end of the market, that price affects consumption, unless of course they've all switched to cheap supermarket voddy.

Nonetheless it confirms in my mind, not that it needed much confirming, that minimum pricing will largely affect the poorest amongst us. But of course, they shouldn't be drinking anyway, should they?

Cains Gassed Off

Our somewhat chilly winter weather has resulted in restrictions of gas supply to industry. Beer is industry, so it seems that in order to keep us all toasty at home, Robert Cain of Liverpool has been told that their gas supply is being stopped (it has happened now) until further notice. Sudarghara Dusanj, the managing director, said he was shocked when the brewery was given 12 hours’ notice to stop using gas. No date has yet been given for the return of the supply.

“We have had the brewery for eight years and this is the first time we have ever had to do this, so we didn’t have oil supplies,” Mr Dusanj told BBC Radio 4’s Today programme.

Now Cains isn't everyone's favourite brewery and I dare say it will be happening elsewhere, though for now, no doubt, some will be enjoying a touch of schadenfreude at the Dusanj brothers expense..