Another traditional UK brewer to sell up
 
Another traditional UK brewer to sell up
09 SEPTEMBER 2019 8:00 AM

There’s a lot of recent M&A in the British beer industry, which raises the question of its future and that of the hotels affiliated with brewing companies.

In July I wrote in this blog about the challenges to United Kingdom born-and-bred beer breweries.

In the context of Hotel News Now that concern will be limited to those with accommodations divisions.

At the bottom of my worry is that a lot of these brewer hotel-operating companies brew beer that no longer is at the tip of drinkers’ tongues. What is at those tips is craft beer.

It seems in order to keep their ships afloat, these “traditional” breweries are seeking cash injections, and with the pound sterling dropping in value due to the political climate, that cash is coming from overseas. That might also derive from the nature of today’s multinational brewing landscape—Heineken, Anheuser-Busch InBev, Carlsberg and the like.

Foreign capital will not change the taste of any beer (perhaps), but beer drinkers—traditional beer drinkers drinking traditional beers—often tend to be conservative.

In February 2019, West London-based Fullers, founded in 1845, sold its beer brands to Japanese brewer Asahi for £250 million ($302.2 million, although then worth $326.5 million). Fullers will continue to produce beer, most definitely its famed London Pride.

News came in last week that one of the oldest breweries in the U.K., Greene King, has agreed to be bought by CK Bidco, a vehicle of CK Asset Holdings, owned by Hong Kong’s richest person Li Ka-shing. The price is £4.6 billion ($5.6 billion), according to the Financial Times.

Both Fullers and Greene King announced they were moving to concentrate on their hotel businesses, usually smaller B&B-type assets on top of or beside bars.

Greene King has approximately 52 historical hotels throughout England under its Old English Inns brand, including one that claims to be the oldest: the seven-key Old Ferry Boat in St Ives, Cambridgeshire.

Such a focus will delight many who love the hospitality and charm such places still possess in spades, and without the raucousness that does on occasion happen in or even blight a pub.

There are legions of travelers who adore everything connected with the British pub, which explains why businesses such as Punch Taverns, St. Austell Brewery and Marston’s are skipping along this route of opening and operating hotels.

A buy such as Greene King has also generated two trains of thought in the current confused state of play. The first is it is healthy at this very confusing juncture in the Brexit discussion to see international companies still seeing worth in U.K. PLC. The second is that as Brexit stumbles on, the value of the pound sterling has fallen, which makes everything in the country much cheaper to foreign capital.

Faith, or a fireside sale?

In August 2017 Dutch megabrewer Heineken bought Punch and its approximately 1,900 pubs for approximately £400 million ($483.50 million).

This all sort of only leaves brewery and hotel owner Shepherd Neame, which is the oldest operating brewery in the U.K., having scooped up its first hops in 1698 and which has been owned and operated by the Shepherd family since 1732.

It has 15 hotels, mostly in Kent, both its home and mine.

All news outlets suggest younger generations are drinking less and less alcohol, although I hear the amount spent on alcohol in the U.K. has increased. This is because drinkers of all ages are spurning what might be considered more tasteless beers such as lagers to take part in the craft-beer focus that does not seem to end anytime soon.

According The Telegraph, in 2016 and 2017, 954 craft breweries opened across the kingdom, but that craft brewing’s “market share … is still below 5% of overall beer sales … compared to 23% in the U.S.”

According to pub-trade website The Morning Advertiser, in 2018 only eight new craft breweries opened in the U.K., but, even giving inevitable closures of some of those previous openings, that still tots up to a colossal number of breweries.

Maybe some of those breweries will move into lodgings. One of the first and largest, BrewDog, already has a couple hotel properties.

Not all the owners have beards.

Email Terence Baker at tbaker@hotelnewsnow.com or find him on Twitter.

The opinions expressed in this blog do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.

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