Business news: Consolidation strikes UK pub sector

Young & co’s Brewery hit the headlines when it announced in May that it was to merge with Charles Wells and would be closing down its famous Ram Brewery in Wandsworth, London.

The creation of the new company put an end to the insecurity that had plagued the firm since it first announced
that it was reviewing the future of its brewing operations in November 2003.

The new company, Wells & Young’s Brewing Co, will operate from what Young’s described as a “modern and efficient brewery” in Bedford after members of the board concluded that it would be “uneconomic” to invest in improving the Ram Brewery because of its age, layout and location.

Young’s will hold a 40% stake in Wells & Young’s, with the remaining equity held by Charles Wells. Approximately 90 job cuts are being made.

Following the merger, Young’s beers will continue to be available in Young’s pubs. Wells & Young’s portfolio of speciality cask ales and lagers will include key brands such as Young’s Bitter, Kirin Ichiban Lager and Red Stripe Lager. Wells & Young’s will also be the UK distributor of Corona Extra, the world’s fourth largest beer brand.

Greene King has also driven consolidation in the sector by agreeing to buy Nottingham-based brewer Hardys & Hansons  in a deal valued at £270 million. As reported on p.6–7, this brings the number of pubs owned by Greene King close to 2,700 and will enable it to compete with Wolverhampton & Dudley Breweries, which was also said to be in the race for the pub estate.

© db July 2006