Charles Wells sells brewery to Marston’s for £55m

Historic UK brewer Charles Wells has sold its brewery and the majority of its beer brands to rival Marston’s in a deal worth £55 million, which excludes its chain of pubs in the UK and France.

Charles Wells was founded in 1876 in Bedford

The sale of its brewery and brands signals Charles Wells’ exit from higher volume national sales in favour of a more local and smaller scale brewing future in Bedford, with plans instead to invest in a smaller brewery to supply its pubs.

Charles Wells’ Eagle Brewery in Bedford, which opened in 1976 and has the capacity to produce more than one million hectoliters, is the home of brands including Bombardier, Courage, and McEwan’s, all of which will now come under the ownership of Marston’s.

The sale also includes the UK distribution rights for Kirin Lager, Estrella Damm, Erdinger and Founders, and the exclusive global license of the Young’s brand. In addition, its Cockburn & Campbell wine merchant business will also transfer to the ownership of Marstons. Employees at the brewery in production, national sales, and brands marketing will transfer to Marston’s. Charles Wells Ltd will retain ownership of its Charlie Wells and John Bull beer brands.

It is the second big purchase of a rival brewer for Marstons in recent years, having purchased Daniel Thwaites’ beer division in a cash deal worth £25.1 million in 2015.

“This agreement offers us opportunities to extend our trading area into new areas. The acquisition of the Charles Wells brewing business builds on Marston’s established brewing prowess and is a further step in our objective to develop the leading premium beer business in the UK market, something that Bedford’s Eagle Brewery will play an important part in.”

Charles Wells announced that it would be downsizing its brewing operation and followingthis sale would be investing in a small new, Bedford-based brewery to supply beers to its pub customers in the UK and Europe.

Brewing and supply agreements will be made with Marston’s for interim brewing and longer term exclusive pub distribution services. The Charles Wells pub estate will also have the benefit of the wider beer and wine range available from Marston’s.

Going forward, its key focus will be the expansion of its managed pub businesses in the UK and France through acquisition, alongside additional investment in its leased and tenanted estate.

“We are delighted to have reached an agreement with Marston’s to acquire our brewery and become a close trading partner,” said Justin Phillimore, chief executive of Charles Wells Ltd. “After a detailed review of our strategy we had decided to re-balance the company more towards retail investment and that meant finding a partner we could work with for the future. There are opportunities for both companies in this deal and we look forward to bringing them to life”

Commenting on the deal Tim Page, the Campaign for Real Ale’s (CAMRA) chief executive said it was “always concerned” about any consolidation in the brewing industry, as it could result in a “reduction in choice, value for money and quality for beer drinkers”.

“We’re also wary of one company increasingly controlling a larger and larger share of the market, which is seldom beneficial for consumers,” said Page. “Marston’s has a positive track record of keeping the breweries it acquires open, in situ, and in many cases investing in the sites to increase capacity, and we urge them to continue that policy. We’d also encourage them to protect the brands that they have acquired and increase the range available to beer drinkers, by continuing to supply them alongside the existing beers produced by Marston’s owned breweries.