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The BBC's Greg Wood
"Buying a British pint brewed by a British company is getting increasingly difficult"
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Thursday, 25 May, 2000, 18:19 GMT 19:19 UK
Beer sector faces shake-up
The UK beer industry is facing major changes
The UK beer industry is facing major changes
The UK beer industry is facing a major shake-up as leisure group, Whitbread, has sold its brewing interests and on speculation that rival leisure company, Bass, is about to do the same.

On Thursday, Whitbread confirmed the long-awaited sale of its brewing business on Thursday to Belgium's Interbrew for 400m.

Whitbread's brewing assets include Boddingtons, Flowers, Mackeson, Murphy's and Wadworth 6X, which hold 16% of the UK market.

Its beer business includes three breweries, several distribution sites and employs about 4,000 people.

Stella Artois

The acquisition will allow Interbrew to regain complete control of its Stella Artois brand - Whitbread has brewed the beer in the UK since 1976.

Interbrew sells about 120 lagers and beers, including top Western European brands Jupiler and Dommelsch, in more than 110 countries.

The sale marks the continued consolidation within the UK brewing market, which is becoming more and more competitive and dominated by just a few players.

The Whitbread announcement came as leisure group, Bass, hinted that it, too, wanted to get out of the beer business.

The company said it was likely to sell its beer division as a result of an ongoing strategic review and confirmed it was already in confidential talks.

Analysts estimated that Bass would sell its brewing business this summer for more than 2bn to European brewing giants such Heineken or Carlsberg.


Since 1991, 33 UK breweries have been closed or scaled down, cutting production capacity by more than 3.7 billion pints.

Credit Suisse First Boston has estimated that the UK market still has overcapacity of about 22%.

This has come about because the British are drinking less beer. Since 1984, the markets for wine and cider have been growing at beer's expense.

As a result, brewers have sought to diversify.

For example, Whitbread is involved in restaurants, hotels and fitness, including Marriott Hotels, Swallow, David Lloyd Leisure, Beefeater, Pizza Hut and Costa Coffee.

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See also:

15 May 00 | Business
Whitbread and Bass to quit brewing
20 Mar 00 | Business
UK brewer buys Kronenbourg
14 Jan 00 | Business
Doubt poured on beer rules
04 May 00 | Scotland
Whitbread promises jobs boost
26 Dec 99 | The Economy
Brewers battle beer 'stealth tax'
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