Tag Archives: Scottish & Newcastle

S&N and continental cock-ups

So Scottish & Newcastle falls to the Carlsberg/Heineken combo, thanks to what now turns out to be its foolish involvement in the Russian beer market, leaving not a single one of the former “Big Six” British brewers in existence, and plenty of questions to be answered – what will happen to S&N’s stake in Caledonian, for example? What about WaverleyTBS, the distribution company S&N owns that delivers many independent small brewers’ beers to British pubs?

Just as important, does Heineken have the ability and experience to make any decent sort of run in the British beer scene, now it has become UK brewing’s biggest player, covering everything from keg and cask ale through standard lager to cider? It’s a much more complicated market than any other the jolly green Dutch giant deals in (even if the head of the Heineken family does live in Britain).

Two other news items you may have missed if you don’t read the trade press suggest that big continental companies can’t hack the intricacies of the UK beer market. First, Inbev is withdrawing the strong Artois Bock after less than three years.

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Making S&Nse

So the sharks have started moving closer to Scottish & Newcastle. This is the latest in a series of foregone conclusions in the British brewing scene since a Conservative government decided it would be a jolly idea to partially sever the tie between brewers and pub ownership with the Beer Orders of 1989.

The result, which had been predicted as far back as 1950, by a right-wing economist called Arthur Seldon, writing in The Economist. was that the big brewers – Bass (including Tennents of Scotland), Whitbread, Allied (Ind Coope, Ansells and Tetley’s), Courage, Grand Met (Watneys), Whitbread and S&N, quickly abandoned pub ownership almost entirely.

Then, because brewing in the UK isn’t that profitable, the big brewers abandoned brewing, so that by 2001 only Scottish & Newcastle was left of the Big Seven brewers of 1989 – the rest merged with others or transformed into something else, such as distillers or hotel companies.

S&N, which swallowed the brewing interests of Courage and Watney, rose from being the smallest of the Big Seven to being the largest UK brewer, while the rest of the industry was brought by Interbrew of Belgium (Whitbread and part of Bass), Coors of the United States (the rest of Bass) and Carlsberg of Denmark (Allied).

Unfortunately for S&N, it never dominated its home market the way Heineken, Anheuser-Busch, Carlsberg or SAB of South Africa did theirs, and it has never been able to find the transformational deal that would turn it into a true and invulnerable giant. It bought Kronenbourg off Danone in 2000, and became the biggest brewer in France; it bought Hartwall of Finland in 2002 and gained a half-share, with Carlsberg, in BBH, owner of the biggest brewing concern in Russia (to Carlsberg’s great annoyance). But what it really needed to do was acquire a truly global coverage, the way Interbrew did by merging with Ambev of Brazil, or SAB did by merging with Miller of the United States.

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