UK ale brewers buck beer market dip
continued to show there is life and lucrative deals to be had in
Britain's ale market, despite poor consumer confidence.
Both brewers have seen sales and profits rise this year after buying up more pub businesses and focusing marketing on a few core ale brands.
Greene King announced a 19 per cent sales rise to £360m and a 23 per cent jump in pre-tax profits to £55.8m in its first half.
The success was largely thanks to its takeover of the Laurel and Ridley's pub chains, which helped to facilitate volume increases for Greene King's core ale brands: Old Speckled Hen, Abbot Ale and IPA.
Newly packaged Speckled Hen has also become Britain's top premium ale in the off-trade and is now on the shelves of half the country's supermarkets; something that has helped it to buck beer market decline.
UK beer consumption has fallen 13 per cent in the last 15 years, while wine consumption has risen by 75 per cent and spirits are up nine per cent, according to government statistics.
Yet, Britons are increasingly drinking at home instead of in the pub and around 40 per cent of beer is bought in supermarkets.
Greene King's latest success followed on the heels of mid-market rival Worlverhampton & Dudley Breweries (WDB), which has increased sales and pre-tax profits by 16 per cent to £597m and £90m respectively over the last 12 months.
WDB has also been on the takeover trail, snapping up Burtonwood, Cumbrian brewery Jennings and English Country Inns for a total of £254m this year.
The group said its beer brands, including Banks's, Mansfield and Marston's, continued to perform strongly, and a deal with international beer firm InBev to brew Draught Bass had made WDB Britain's biggest cask ale brewer.
WDB's tight focus on ale, and acquisition of more pubs in which to sell it, has enabled the firm to grow its beer brands, despite a 6.4 per cent ale market decline last year.
The group said weak consumer confidence had "subdued trading conditions" in the last few weeks, but that like-for-like sales were still "marginally positive".
Both Greene King and WDB have, however, clearly shown this year there is money to be had from the soft underbelly of Britain's beer industry.
WDB added that regulatory issues, such as the new licensing law and potential pub smoking ban, continued to challenge business.
The group said applying for new licenses had been costly, but it allayed fears of 24hr boozing by saying that most of its pubs were likely to open for one or two extra hours, two or three times per week. "We expect that the impact of the new legislation will be modestly beneficial."
WDB chief executive, Ralph Findlay, said that the firm was working hard to prepare for any kind of smoking ban and that 80 per cent of its premises now had outside trading areas.
He added that the firm had 15 smoke-free pubs and would implement this policy voluntarily "where there is clear demand".
