Saturday, 25 July 2009

Global giant may axe Scottish brewery

Tennent's faces closure threat
from world's giant AB InBev

Tennent's brewery in Glasgow, thought to tbe first British brewer to make lager, faces closure from its owner, the world's biggest producer AB InBev.
According to the Times newspaper, AB InBev has appointed investment bankers Lazards to find buyers for both the brand and the Wellpark Brewery, thought to be worth £86 million. AB InBev has not denied the report.
Tennent's controls 60% of the Scottish lager market but it's a declining market and AB InBev may struggle to find a buyer for the brand. It's a beer with some history. The brewery was founded in 1796 and by 1888 was producing lager with the aid of the new technologies made possible by the industrial revolution. By 1906, according to a contemporary report, "a new brewery complete in all details has arisen occupying the whole north-east portion of the site of the Brewery, and devoted to the manufacture of Lager, Munich and Pilsener beer".
Later in the 20th century the brewery became part of the Bass brewing empire and was known as Tennent Caledonian. When Bass left brewing in 2000, ownership passed to the Belgian brewer Interbrew. Interbrew then merged with Ambev of Brazil to form InBev and in 2008 the group took over Anheuser Busch of the United States, creating the biggest brewing group in the world.
As a result of the merger with AB, InBev has acquired massive debts. It's cutting its losses by closing plants and selling brands. Earlier this year it announced it would close the historic Stag Brewery at Mortlake in London and the Staropramen Brewery in Prague. The Stag plant, better known by its former name of Watney's, produces Budweiser and it's not known where the brand will be made when the brewery closes.
The possible closure of Tennent's comes hard on the heels of Diageo's plans to close one of its Johnny Walker distilleries in Scotland, which has caused outrage among politicians. Now Paul Martin, the Labour MSP whose Glasgow Springburn constituency covers the Wellpark Brewery, said he was seeking an urgent meeting with management and trade unions.
"It's vital that the jobs and conditions of staff are maintained," he said. "This is a profitable and important brand in Scotland and it clearly has a great future. Tennent's is still Scotland's msot famous lager."
Wellpark employs around 300 workers. The brewery produces 100,000 barrels a year and sponsors the Scottish national football team. The problem for Tennent's, along with all large breweries, is falling demand for heavily-promoted brands. Beer sales in Scotland are estimated to be at their lowest since the 1940s. Latest industry figures show that beer sales across Britain dropped 8.3% in the fourth quarter of 2008. But there is strong demand for Tennent's lager abroad, selling in 31 countries.
A spokesman for the Scottish government said it had contacted Tennet's to seek clarification about the company's plans.


Blogger Unknown said...

11 April 2010 at 06:50  

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