Saturday, 23 June 2012

Why Is There Only One Monopolies & Mergers Commission?

“Bass will sell their brewery!”

That’s what my boss said to me around 16 years ago.

Rubbish, is what I thought in reply to that ridiculous statement. How can Bass, one of the biggest and oldest breweries in the UK if not the world, sell their brewery? They ARE a brewery. That would be impossible. It would be like Disney selling Mickey Mouse or Microsoft selling their Windows operating system.

Bass at the time owned many of the best known brands in the UK including Draught Bass, Worthingtons, Stones, Carling Black Label, Tennents, Britvic, Coral Bookmakers & Gala Bingo as well as one of the world’s largest hotel operators, Holiday Inns.
They also owned their own printing firm, Mitre Printing based in Nelson, Lancashire. They produced Pepsi in the UK under licence and were owners and operators of well know pub brands Toby Cavery, Harvester, Fork & Pitcher (later Vintage Inns), Edwards, Bar Coast, All Bar One & O’Neils.

Around that time they were linked with the takeover of Ladbrooks Bookmakers and Tetleys Brewery. These actually only failed due to the monopolies and mergers commission (MMC) knocking them back if my memory serves me correctly.

However, four years later my boss was proved absolutely correct when Bass PLC did indeed sell their brewing operations to Interbrew (now Anheuser-Busch InBev) who in turn were forced to sell Carling & Worthington brands by the MMC to Coors (now Molson Coors Brewing Company). They also sold the Bass brand and were themselves forced in to a name change to Six Continents PLC.

This new company then demerged the hotels and pubs business into Intercontinental Hotels Group and Mitchells and Butlers respectively. Britvic went with ICHG which in turn was also demerged from them.

Now, you may be wondering why I’m telling you all this. I’m hoping that it may be of interest. However, my point is a simple one. Many years ago you could tell which brewery owned the pub you had walked in to by what was on the bar. Now you can’t.

If it had Heineken, Stella or Boddingtons available then it was probably a Whitbread establishment.

Fosters, McEwan’s, John Smiths & Websters would indicate a Scottish and Newcastle pub.

And if you had a choice of Carling, Worthingtons & Stones then you were definitely in a Bass house.

All this demerging and selling simply came about because the government at the time thought that breweries owning thousands of their own pubs had an unfair advantage. The brewery sold beer to its own pubs. Why wouldn’t they? If a pub is owned by a brewery, who else would it buy its beer off?

The government basically accused the brewing industry of unfairly monopolising the great British pub and therefore took steps to prevent this by limiting the number of pubs a brewery could own. The logic behind this was that they would force the breweries to sell elsewhere because their market was now limited. This was supposed to be all about more choice for the consumer.

What they didn’t consider was that if they sold their brewery they were free to own as many sites as they wanted with the added benefit of being able to buy beer from whoever they wished at a price that was negotiable.

And so beer brands were sold from pillar to post until we ended up with two or three leviathan breweries (like we had before) owning everything alongside a couple of massive pub companies. The only difference now, that I see, is that the breweries are even bigger!

However, the conduct of the MMC in the late 1980’s did absolutely nothing for the UK brewing industry and it certainly didn’t do anything to make the trade better for the common drinker! If anything, it is responsible for the decline of the cask sector because all these new foreign owned companies didn’t and still don’t really want to bother with cask ale.

Bass Pale Ale is now brewed by Anheuser-Busch InBev in Samlesbury, Draught Bass by Marstons, Tetley’s cask by Bank’s in Wolverhampton and Boddingtons Cask is not brewed at all.

The only benefit I can think of (and I’m struggling here) is that you can get Carling, Stella & Foster’s in the same pub. Is that really a benefit? I’m going to be honest here and say NO!

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