Eire Apparent

Guinness is one of the many brewers now tapping the potential of the Asian drinks market. It is assisting the development of Irish themed pubs and proving that nowhere is immune to the charm of the Irish.

It’s three o’clock in the morning. The Guinness is flowing and a rowdy crowd is singing “Molly Malone”. But O’Malley’s Irish pub isn’t in Sligo, it’s in Shanghai.

Outside it’s minus five degrees. You can taste the pollution and the sky is lit by acres of neon. The streets are teeming with people on bicycles and women are buying live fish from buckets on the pavement. Shanty towns stand next to glittering department stores, but as you slip into O’Malley’s you really can believe you are in Ireland.

The People’s Republic of China’s first Irish pub was officially opened last week. That it began life as a 500,000 flat-packed self-assembly Irish bar did not deter the lively mix of ex-pats – Irish, Brits, Americans and Aussies – and also élite Chinese dressed up to the nines in Armani and Cerruti from downing Guinness at 4.50 a pint.

Shanghai joins a growing list of cities from Casablanca to Reykjavik which boast an Irish bar. And where there is an Irish bar there has to be Guinness.

But rather than invest in its own far-flung chain of Irish pubs, Guinness is working with individuals and entrepreneurs prepared to put up their own cash.

The company initially invested 10m in this international expansion – the bulk of it on staff, marketing and promotion – but it provides only advice and support to potential investors. In the process it manages to shift an increasing amount of product in emerging markets and all at very little cost to itself.

Andrew Clarke, country director China for Guinness Worldwide, says: “We did some research a few years ago into the number of Irish bars opening around the world and the amount of Guinness they were selling. There was clearly a close connection between the ‘craic’, or warm atmosphere, of Irish pubs and the volumes sold.”

To the Irish punters in Shanghai, O’Malley’s felt like the genuine article – especially after ten pints – and the Irish stew on the menu made a welcome change from local delicacies such as duck’s tongues, ox’s ears and steamed jellyfish. Padraig O’Connell from Cork – working in Shanghai for a telecoms company – says: “Sipping Guinness in an Irish pub in Shanghai is a surreal experience.”

Less surreal, but still identifiable, is the fact that the pattern is being repeated in Britain, which has seen the birth of hundreds of themed Irish pubs by British brewers including Bass Tavern’s O’Neills in the past three years.

Jonathan Miller, a spokesman for Guinness UK, says: “The average British pub might sell two kegs of Guinness a week, but if the pub has an Irish theme that rises to 40 kegs a week.”

In Britain, Irish theming can be a fairly loose concept. It can mean anything from the installation of a shamrock over the bar, a vaguely Irish sounding name and a few Pogues’ numbers on the juke box to something that could easily pass muster in Dublin.

Guinness is working with a design company called the Irish Pub Company to create the latter. Business development manager Paul Hamilton says: “There are plenty of what I call ‘plastic Paddies’ about. But we design and build the pubs in Ireland, kit them out with Irish bric-a-brac and then flat pack them to their destination where they are reassembled.”

More than 200 pubs have already been assembled.

Buyers choose from a number of different styles including the Dublin Victorian pub, complete with bevelled mirrors, stained-glass and elaborate tiling; the Irish pub shop based on a tradition whereby the local grocery or hardware store doubled as a pub; and the Irish country cottage pub stuffed with tankards and crockery.

One of Hamilton’s pubs will set an investor back about 200,000, although one bar in the US cost $1.5m (1m). “We have built them in 36 countries so far,” says Hamilton. “They take eight-to-12 weeks to build and we have eight full-time artists working on them, together with a team which is permanently at sales in Ireland buying genuine fixtures and fittings. The only problem is that we may run out of Irish bric-a-brac.”

But an Irish bar is also about people and so the Irish Pub Company works with a recruitment firm to find Irish bar and catering staff prepared to move to obscure locations. While O’Malley’s is owned by a New Zealander, it is managed by an Irish couple, Carl Coates and Mary O’Flynn, who say it took them 48 hours to decide to give up life in Cork in favour of Shanghai, “because it was too good an opportunity to miss”.

There is no doubt that Irish bars are hugely popular around the world, but cynics may be forgiven for wondering if it is just a short-lived fad.

“It’s true there are a lot of Irish pubs about, but this concept is steeped in authenticity,” says Clarke. “Other Irish bars may change into something else a few years down the line, but this is here for the long term.”

However, Guinness is not just in the business of keeping ex-pats happy. With a population of 1.2 billion, China is a huge potential market. It is already the second-biggest beer market in the world and by the year 2000 is expected to overtake the US on the back of an annual growth of 12 per cent.

British brewers, including Allied Domecq, are up against the US’ Anheuser-Busch, Denmark’s Carlsberg and Australia’s Foster’s in the battle for market share.

There is a huge craving for western brands and Chinese government officials admit privately that they are worried their own local products will not be able to compete.

However, according to figures produced by The Economist magazine, only about 120 million urban Chinese earn sufficient ($1,000 a year) to buy even the most modest products such as packaged foods and detergents.

It may be a while before they are in a position to fork out 4.50 a pint. “As with other markets, the locals in the pubs are wealthy,” says Hamilton. “They are trendsetters and influence others.”

Guinness is confident that the Asian market will provide returns. It has set up seven Guinness co-ordinators across Asia to supply the developing demand and is manufacturing Guinness in Malaysia. Through a licensed brewing agreement with the Putian Jinse Brewery in the Fujian Province, it is also producing a lower strength Guinness called Guinness Special Light.

Clarke says: “It’s early days for Guinness Brewing Worldwide in China. We want to learn about the market and perfect our strategy in a limited geographical area before rolling out locally-brewed Guinness to other provinces. China is a complex and highly fragmented market and with a product like Guinness it’s important not to rush the market entry until we have a better understanding of market dynamics.”

O’Malley’s is just one stage in furthering that market understanding, and similar pubs will open in other, newly-emerging markets. Nowhere, it seems, is immune to the charm of the Irish. Hamilton has just received an enquiry from a potential investor in Kazakstan.

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