Global prize still a long way off

UK brewers are about to become a rare breed in danger of extinction. Bass has put its beer interests up for sale, and Whitbread is expected to follow suit in order to concentrate on more profitable businesses, such as hotels, leisure and restaurants. If these divestments go ahead successfully, it will leave Scottish & Newcastle (S&N) as the only major UK brewer capable of competing on the international stage. To that end, the company has just acquired the Kronenbourg brand from Danone, and the move is being interpreted in two ways. Either it is a brilliantly structured deal giving S&N greater access to European markets and the chance to build global brands. Or it is a panic-induced tactic, designed to head off a possible takeover from one of its competitors, such as the world’s largest brewer Anheuser-Busch or South African Breweries. Former Scottish Courage marketing director John Nicolson, now in charge of S&N’s corporate development (a job usually reserved for accountants), would probably plump for the first of these two points of view, as he was the man who struck the deal. But he says: “The prize – to create a truly global brand – is still there to be captured, but I think it will take much longer than people think.” Worldwide beer volumes are expected to grow in the medium term, though most of that growth will come from emerging markets. Bass’ announcement this week that it is pulling out of China shows the difficulties in building sales in these markets – the company has also had a rough ride in Czechoslovakia. Meanwhile, European beer sales are expected to remain stable over coming years, presenting few opportunities for S&N to grow organically other than by taking market share from its rivals. Little surprise, then, that Nicolson says: “Further down the line, we will have to make more acquisitions.” S&N has gone into overdrive over the past year, with three significant moves – the acquisitions of Greenalls and Kronenbourg, and the decision to sell off Center parcs. But this is just a start. Only Heineken, and to a lesser extent Guinness, have a significant presence in virtually every market. Anheuser-Busch’s Budweiser is heavily dependent on the US market. S&N’s acquisition of Kronenbourg has placed it in the top ten brewers ranked by global sales. It liked the brand so much, it is considering adopting its name. For S&N to rise up the global rankings to fourth or fifth place, it will not only have to buy more multinational brands – Nicolson may be looking at Becks – it will also have to fight off the attentions of rivals which could swallow it up.

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Marketing Week, the US number two online shopping site which launches in the UK this week, has appointed former Foster’s marketer Gordon Henderson as its head of marketing. Henderson, who was formerly marketing director of Foster’s in Western Australia before coming to the UK two years ago, joins as vice-president of marketing to oversee the […]

Can retail giants make the Net pay?

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By racing onto the Net, UK supermarkets are caught in a catch 22. The more successful online ventures become, the more they cannibalise store sales. Cynics argue it’s merely an attempt to woo City analysts.


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