Brewing giants ‘taking over UK’s real market’

24/8/17

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GLOBAL brewing giants are seeking to use their ‘marketing muscle’ to take over the UK’s booming real ale sector.

That is according to the new Campaign for Real Ale’s Good Beer Guide, which was released today.

The 2017 edition of the Guide – sponsored by beer quality assessor Cask Marque – records ‘the vibrancy’ of the British real ale market, with more than 200 new breweries opening in the past year, and 1,540 now in operation.

But the Guide also reports that the world’s two biggest brewers, AB InBev and SABMiller, are due to merge this month at a cost of £79bn, and have moved into the London craft beer sector.

In an interview for the Guide, Professor John Colley of Warwick University’s Business School, who is an expert on global companies, says the likes of AB InBev and SAB Miller can strip costs from production as a result of their ability to bulk buy raw materials such as grain and hops at enormous discounts.

Prof Colley adds that big brewers enjoy 40 per cent lower costs than even medium-size producers.

He says that when AB bought Modelo of Mexico it stripped 20 per cent of costs from the company.

With Beck’s in Germany it took out 15 per cent of costs.

He estimates that the AB merger with SABMiller will generate cost savings of $1.4bn. The end result is cheaper beer that drives other brewers’ products off bars and supermarket shelves.

Good Beer Guide editor Roger Protz said: ‘The way in which the global brewers are muscling in on the craft sector in Britain and other countries is a cause for concern and a potential threat to the independent sector.’