UK brewer attacks real ale rebirth

Related tags Beer

Wolverhampton and Dudley Breweries has signed a deal to buy UK
rival Jennings for £45.8 million as the firm defies protestors to
capture more of Britain's resurgent real ale sector, reports
Chris Mercer.

The two firms' boards announced they had agreed the sale based on W&DB's offer to pay 430 pence for each Jennings share.

W&DB said Jennings, with its historic Cockermouth brewery in Cumbria producing strong local brands such as Cocker Hoop and Cumberland Ale, would be a great strategic fit and that the subsequent consolidation could alleviate cost pressures on both firms.

But, the move has met stiff resistance from Britain's Campaign for Real Ale group (CAMRA), which still hopes to thwart the deal by persuading Jennings' shareholders to reject W&DB's offer.

Mike Benner, CAMRA's chief executive, said: "W&DB's promises to keep Jennings Brewery open, however genuine, are no guarantee. In 1999 W&DB acquired Mansfield Brewery and closed it within two years. CAMRA urges all shareholders to oppose a takeover to save Jennings Brewery from a similar fate.

"Like many local and regional brewers Jennings has a large number of small shareholders who are committed to the future of the Brewery. W&DB will have a hard task persuading them that a takeover is in the interests of Jennings Brewery."

However, Jennings chairman John Rudgard, made the emotive case for a sale: "We believe that W&DB will provide a good home for Jennings. The deal will protect and develop Jennings' heritage within a far larger and stronger group."

W&DB, for its part, said it recognised the heritage and strong local appeal of Jennings' brands and that it was committed to developing the brewery in the region.

In its last financial year Jennings had its beer in 128 pubs and recorded a 13 per cent rise in profits. The small-time brewer also plans to invest £5 million in acquisitions in areas such as West Yorkshire, Lancashire and the North of England during 2005.

If W&DB is successful with its offer then the move would clearly be a significant step forward for the firm in the UK's real ale sector, although the company ruled out an aggressive expansion plan saying it would "expand its estate where suitable opportunities occur"​.

Some real ales have shown resurgent growth in Britain over recent years and southern-based brewer Green King announced sales increases across its brands, including Abbot Ale and Old Speckled Hen, for the nine months up to February 2005.

"Young people are beginning to see these brands as upstream and innovative, in the same way as they do Belgium beers,"​ said John Band, analyst for market research group Datamonitor

W&DB is already the country's biggest ale business thanks to the widely sold Marston's, Banks's and Mansfield brands, according to market analyst group AC Nieslen​, though the firm may need new varieties to give these brands a trendier, younger edge.

The company has just relaunched its Low C premium, bottled beer as Marston's Resolution, claiming this is the latest in a line of new products aimed at health conscious consumers.

"It offers the best of both worlds with minimal calories and carbs, yet the 4.7% ABV brew boasts all the flavour, body and strength of traditional English beer,"​ the firm said.

W&DB's beer sales actually dipped £2 million to £120 million last year, but the firm put this down to a non-core disposal and expects to pick up again in 2005, helped by Jennings and a deal with international firm Interbrew to become the brewer of Draught Bass.

W&DB also recently signed a distribution deal with the J D Wetherspoon and Mitchells & Butlers pub chains, ensuring greater availability for its brands and again reinforcing the growing popularity of ale among British consumers.

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