Tuesday, 15 October 2024

Undone by progress

In July of this year, Marston’s sold their remaining 40% stake in the Carlsberg-Marston’s brewing joint venture to Carlsberg, ending a long and proud history of the company’s involvement in brewing. Reducing their debt burden was given as a key reason behind this move. Not entirely surprisingly, three months later, Carlsberg announced that they were closing the Wolverhampton brewery that they had acquired from the joint venture, with operations being concentrated at the original Marston’s site at Burton-on-Trent. This was particularly poignant as Wolverhampton was the birthplace of the Wolverhampton & Dudley Breweries company that eventually metamorphosed into Marston’s.

The history behind this is somewhat complicated. In 1999, Wolverhampton & Dudley, best known for Banks’s ales, took part in a bitter two-way takeover battle with Marston’s, with each company trying to take over the other. Wolves & Dudley were eventually successful, but only at the cost of taking on a huge burden of debt that was later to prove a millstone around their neck. In 2007, the combined company renamed itself as Marston’s, as that was a much more widely recognised name.

The debt burden was further increased by takeovers of the Jennings, Wychwood and Ringwood breweries, and then in 2017 of the large Eagle Brewery at Bedford, previously owned by Wells & Youngs. By this time, commentators were noting that its level of debt put it in a risky position, and the 2020 Covid lockdown brought the house of cards crashing down. With all pubs closed, the level of brewing activity greatly diminished, and the company’s share price plummeted. The disposal of 60% of the brewing activities to Carlsberg was somewhat in the nature of a fire sale, to prevent the company being overwhelmed by its debt obligations. The sale of the remaining 40% stake four years later only completed the process.

Even before this, it had been widely speculated that one of the two large breweries would have to close sooner or later. I’d assume that the decision was motivated by considerations that Burton, on an edge-of-town site, had more room for expansion, while Wolverhampton, close to the city centre, would fetch more for redevelopment. While the Wolverhampton site is superficially impressive, I went round it on a tour in 2018 and found the actual brewing and fermenting operations surprisingly cramped and haphazard. It wasn’t really a state-of-the-art modern brewery.

Inevitably, the decision was met with a great amount of sadness, but also a certain degree of anger. Labour’s recently-elected West Midlands condemned the decision and urged the company to reconsider.

However, many of the responses to his tweet suggested he might be better employed concentrating has attention on stopping library closures in Birmingham rather than a brewery closure in Wolverhampton. It’s also noticeable that many of the people decrying the closure are the same who have over the years dismissed the beers produced by the plant as bland, mainstream pap.

Carlsberg are running a commercial business, not a preservation society, and there is limited scope for sentiment. In the fact of declining demand, operating two large ale breweries only 30 miles apart in Staffordshire simply did not make financial sense, and rationalising capacity was inevitable. They may give cause for lament, but I doubt whether over the past sixty years there has ever been a single brewery closure decision that those making it have later regretted in commercial terms. When a pub closes, there is the opportunity for customers to put their money where their mouth is and club together to buy it, but that simply isn’t an option for a large brewery supplying thousands of pubs.

The decline in ale demand is an unfortunate fact of life that companies have to come to terms with. Cask ale is now below 10% of the on-trade beer market, and a year or so ago my local giant Tesco about halved the amount of shelf space devoted to Premium Bottled Ales, slashing the number of lines stocked at the same time. Kent brewer Shepherd Neame recently announced a shift of emphasis from cask to craft in the face of falling sales.

Some may point out that certain smaller breweries and cask-focused pubs are going great guns and increasing sales, but an overall declining market does not affect everyone equally, and the wider picture is pretty clear. The founding members of CAMRA feared that real ale might only survive in a limited, cottage industry form and, fifty years later, that may eventually be coming to pass, as the big operators scale down their involvement and leave it to micros and small family brewers.

The topic of the Wolverhampton closure has also been discussed by Tandleman here.

21 comments:

  1. Can always rely on the “Pub Curmudgeon” to leap to the defence of conglomerates destroying our brewing heritage.

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    1. Maybe rather than snarking from behind a cloak of anonymity you could make some suggestions as to what could be done about it.

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    2. Perhaps what we need is a statutory closure process for breweries like we have for railways. If closure is refused, the brewery then has to produce one brew of Parliamentary Beer each week which is then poured down the drain.

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    3. Brilliant idea Curmudgeon !

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  2. I understand the overwelming necessity to close either Banks's or Marstons. Nevertheless i have never rated Marstons in over 50 years of drinking cask ale. I always preferred Banks's Bitter and Mild. That is still the case so i shall be putting ss much down as i can before it vanishes !

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  3. You lay out a sober analysis which in the present circumstances just cannot be denied. The removal of cask from the mainstream all stems from the Beer Orders.

    Of course, I readily admit this is a hobby horse of mine. It may well have spawned a thousand micro brewers, but the loss of volume has been driven cask to the brink overall, with regional and local caveats.

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    1. An analysis that I entirely share. The Beer Orders cut pubs and breweries adrift from each other, to the detriment of both.

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    2. The preference of every CAMRA member I have ever met is to drink in small independent free houses and to drink micro brewed beer. You get what you ask for.

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    3. As I say, many of those who are bewailing the closure of the brewery also sneered at its products when it was open.

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  4. Rather like when the Francis Abbey in Kilkenny closed in 2013.
    Oscar

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  5. Less than 10 percent of the on trade? Let's face it, cask is dying.

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    1. I wouldn't say it's dying, more retreating into a niche. But it is actually proving very resilient in mainstream outlets.

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    2. As the demographic of the country changes, so does the demand for cask ale, there will be areas where cask ales are rare, drinking habits are changing rapidly, with cost pressures, religious intolerance, health zealots, and indifference to pub culture the driving forces.

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    3. I'd say only 1 in 5 of the cask ales I buy is worth the money.The rest,to be frank,is utter shite.Which is why I very rarely buy it any more and only then in the evening.Lunchtime cask is undrinkable.

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  6. Cask ale is a cottage industry and that is the form the majority of active CAMRA members that I have ever met prefer. It is what it is.

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  7. The thing that always gets me about stories like this is why some people are not just sad but frothingly angry. The same applies to pub closures. Why do they think private commercial businesses should be expected to keep operating breweries or pubs that they do not believe are economic? I was joking before about a statutory closure procedure, but some people really do seem to think along those lines.

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    1. If only dickheads and hard nuts are drinking in them of course they'll close. We know you want a return to a time when there were no pubs to drink in and everyone was deathly scared of authority but times have moved on.

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    2. "a return to a time when there were no pubs to drink in"? What are you on about? Are you mentally disturbed?

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    3. If it's early Seventies, they didn't mention the ABV on the keg font as it was so weak. You can see this in some of the remakes.

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  8. Paul,
    In the early 1970s the only brewery to declare the Original Gravities of their beer was the Northern Clubs Federation Brewery, but they brewed for their clubs' members not for shareholders.
    Having drunk dozens of pints of Banks's so far this year I should have more right to complain about Carlsberg's decision than most on here !

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  9. Unlike Paul, it’s many years (probably at least twenty) since I had a pint of Banks’s, but I’m very sorry that the brewery is closing – I have fond memories of several visits to Worcestershire in the 1980s and early 1990s which involved many pints of Banks’s (and Hanson’s) Mild and Bitter, generally from metered electric pumps (a method of dispense that is much missed – at least by me). There was a great deal to be said for the beer scene of the seventies and eighties: we have lost a lot.

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