Carlsberg gambles on UK ale trend

By Chris Mercer

- Last updated on GMT

Related tags Beer market Beer

Carlsberg's plan to launch its Tetley's Original ale in UK pubs may
thrive on the country's ale revival, yet the move is risky as
others warn of falling consumer confidence.

Carlsberg said it would launch the CO2-dispensed ale, with a relatively low ABV of 3.6 per cent, to "fill the current gap in the on-trade sales portfolio and help to exploit a market segment of nearly 700,000 barrels per year"​.

The brewer has positioned Tetley's Original as an authentic ale, brewed in traditional Yorkshire Squares fermenting vessels and will spend £13m on a nationwide advert campaign.

Carlsberg said that ale now accounted for one pint of beer in every three bought in UK pubs and restaurants, and hopes that Tetley's Original can inject some life into its UK beer sales.

Goldman Sachs said recently that the UK was the slowest growing of the world's major beer profit pools, with volumes expected to remain flat at best until 2010. Consumption, meanwhile, fell from almost 10 pints per week to a little more than six between 2000 and 2003.

The resurgence of ale has bucked the pattern of decline on Britain's beer market in the last year.

Middling brewer Greene King has led this resurgence by pouring money into its three big ale brands - IPA, Old Speckled Hen and Abbot Ale.

An average five per cent sales rise from these three helped Greene King's brewing division to a 5.2 per cent sales increase, up to £111.6m, for the year ended 1 May. The brewer also said its own-brewed volume grew by three per cent over the year, against a two per cent decline in UK beer market volume.

IPA even managed to replace Carlsberg's Tetley brand as Britain's number one cask ale.

Datamonitor analyst John Band told that Greene King's positive results "show that it is possible to market real ale as a premium drink. Young people are beginning to see these brands as upstream and innovative, in the same way as they do Belgium beers."

Yet, the latest Datamonitor figures say that ales will not escape the general market decline. The market for ales, stouts and bitters is expected to shrink 1.4 per cent every year up to 2009, falling from £5.2bn (€7.78bn, $9.1bn) to £4.9bn.

Scottish & Newcastle, the UK's biggest brewer, recently warned of a soft market due to "ongoing weak consumer confidence"​, despite announcing that results were on track so far this year.

Regulation proposals such as moves to 24-hour licencing and the prospect of pub smoking bans have also brought uncertainty to the UK on-trade beer market, with their possible effects disputed.

Carlsberg itself has confirmed it plans to shut around half its European breweries within a decade to reflect a permanent shift in beer market growth from west to east, and more specifically, China.

Related topics R&D Carlsberg

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