Nicolson’s task is no small beer

It’s not been easy for John Nicolson, these past two years as group marketing director at Courage. Shortly before he arrived from Birds Eye Wall’s, it became apparent that Courage was on the block. Not only did he have to juggle with shrinking marketing budgets as margins were fattened for sale, but his own fate was in question throughout.

The Sword of Damocles has now fallen – but on someone else’s neck. It is one of the small ironies of life that Courage may have been knocked down to Scottish & Newcastle (S&N) for 425m but Nicolson will head the enlarged marketing department of the combined brewers. A just reward for his skill and application no doubt, but also symbolic of the broader canvas at Scottish Courage.

Because the reality is that the Courage brands will dominate – now they are shorn of their recent corporate baggage and about to receive proper investment. One of Nicolson’s key priorities will be to highlight the national pulling power of Courage brands while playing to the regional strengths of S&N’s. Along the way, he will need to be both ruthless hatchet man and suave diplomat as he carves out a coherent brands portfolio that does not alienate both camps.

But Nicolson’s task is going to be tougher than that. The increasing fickleness of consumers (exacerbated by the decline of the on-trade) requires bigger and bigger budgets being ploughed into brand image and innovation. That will be very expensive, as shareholders will no doubt point out once the pips begin to squeak.

Nor can Scottish Courage afford to rest on its laurels. It may be the biggest brewer, with a market share variously estimated at 25 to 30 per cent, but its rivals won’t be idle. Already they are attempting to embarrass Scottish Courage through tactical price cuts at the wholesale level.

More menacingly, the S&N/Courage deal is likely to lead to a further rash of concentration and “rationalisation” among UK brewers, with a consequent toughening of conditions. Already the mists of speculation are swirling around Whitbread. Does it really want to stay in brewing? Recent corporate activity suggests it is more interested in retail. And what of Carlsberg’s intentions towards Carlsberg-Tetley?

The UK brewing scene looks pretty bleak right now, but in three years time it is likely to be more so.

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