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Fuller’s sell brewing business to Asahi

Written by Steve Bury

The £250m sale of Fuller’s Brewing interests to Asahi was announced on 24th January. The deal includes their brewery in Chiswick, cider and soft drinks brand Cornish Orchards and cask brewer Dark Star of Partridge Green West Sussex.

Asahi have said they would continue production at the Griffin Brewery in Chiswick, west London, where beer has been brewed on the site since 1654.

Fuller’s will now become a glorified Pub Company running its hotels and pubs which generate 87% of its profits and said the deal was driven by changes to the beer industry which meant it was being squeezed between the global brewers and the 2,000 smaller brewers across the UK. Fuller’s says that tax breaks given to microbrewers and the power of the big global drinks firms has left little space at the bar for those in the middle.

The Griffin Brewery dates back to the era of Oliver Cromwell, the business – full name Fuller, Smith & Turner – was formally created in 1845 with the first chief executive not to have come from one of the founding families Mr Emeny taking over in 2013. The deal was well timed for Asahi because of the fall in the pound. The Japanese firm has been gobbling up brewers across Europe and elsewhere in a major buying spree which saw them recently take over Meantime Brewery in Greenwich. Asahi already own Peroni, Grolsch and Pilsner Urquell.

The two companies have signed a long-term supply agreement and Fuller’s are giving some of the proceeds to shareholders and its pension fund, with the share price rising by 22%. Just over 50% of the shares are still owned by descendants of the founding families.

Jackie Parker, chair of CAMRA, said she was concerned that “consolidation was seldom beneficial for consumers, Fuller’s has been a family brewer in Britain for more than a hundred years, and it’s a very sad day to see such a well-known, historic and respected name exit the brewing business. While the Fuller’s family has stressed it has sought to protect the heritage of the Griffin Brewery, we’d call on the new owners to pledge to continue brewing operations at the Chiswick site.”

Not that it is much comfort, but Asahi are one of the better takeover giants. In the past they have tended not to interfere with the brewing process and in fact have chosen to provide more funding for those taken over to expand their activities and then they (Asahi) just do the distribution of what they believe to be a good marketable product.

But as we all know well, almost any brewery that expands significantly tends to lose that “something” and encourages blandness. A bit like mums home cooking expanding into a factory environment.

What about Dark Star, there was a lot of talk before the take-over about Hop Head replacing Chiswick Bitter now they appear to be stuck in the middle, it doesn’t look too good.

London Pride being bought by Asahi has been likened by one pundit as like the Ravens leaving the Tower of London. London Pride originating in the 1950’s is already an international if not worldwide brand and that is what Asahi are after.

Of course Fuller’s are no strangers to take overs they bought Gales of Horndean, Hampshire in 2005 closed the brewery and took over the tied estate. Gales HSB and Seafarers were then brewed in Chiswick at the Griffin Brewery their future is uncertain.

Recent takeovers not only by Asahi are reminiscent of the 70s and 80s and I believe it will continue as the more successful minnows become eatable. The long established family brewers are also vulnerable as is seen here, how much is Fuller’s Chiswick brewery site worth. The beers can be brewed elsewhere under license take what has happened to Young’s, Wells, Everards and Thwaites for example. The difference nowadays is that the behemoths are not buying and burying but buying the brand name and allowing them to continue as if nothing has changed. “Crafty” buggers. The technique has operated in the food industry for decades. Who really knows who owns Perrier water, Campbell’s soups, Costa coffee, or Johnny Walkers whisky?

But can we blame the “little” guys for cashing in on decades or even centuries of hard work in a cut-throat industry when they feel they have had enough? What would you do to secure your family fortune in a tumultuous sector? Is it not a bit cheeky for us plebes to dictate what an owner does with their money…? Would you sell your house to a property speculator for double the value you thought it was worth knowing they would build a multi-story car park?

These successful minnows are actually property and business millionaires, not enthusiastic beer drinkers like us who just want tasty real ales as cheap as possible (preferably with CAMRA discount).

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