FDBusiness.com

In a week when the famous Tetley Brewery in Leeds shut its doors for the last time, after 186 years of business, reflecting the continuing decline in the overall UK beer market, three other stories told a different story. Tetley owner Carlsberg UK first announced its plans to close the Leeds brewery, resulting in the loss of 140 jobs, in November 2008. Tetley production is being out-sourced to Marston’s brewery in Wolverhampton, and to Molson Coors in Tadcaster.

However, while the Tetley Brewery was closing, English regional brewers Fuller, Smith & Turner and Shepherd Neame were reporting solid trading, despite the deep economic recession.

London-based Fuller, Smith & Turner increased profit before tax by 16% and turnover by 6% last year. Its total beer volumes increased by 2% as the company again grew its share of the UK ale market. Fuller’s flagship London Pride brand is the UK’s leading premium ale and this year became the number one free trade cask ale by value in Britain.

Headed by its quintessentially British Spitfire brand, Kent-based Shepherd Neame, which is Britain’s oldest brewer, reported that own beer volume grew by 3.6% for the 48 weeks to 28th May 2011.

Cask Ale Revival

Although the UK beer market is in long-term decline, regional brewers have been able to grow sales in the traditional cask ale sector. As the UK beer industry has consolidated, the large international brewers – Heineken UK, Carlsberg UK and Molson Coors – which now dominate the industry have tended to focus on their larger brands and to the neglect their cask ale brands. Indeed, some of the larger national brewers no longer produce cask ale.

This market vacuum has been filled by regional brewers and small craft breweries (microbreweries) which have helped to fuel and to capitalise on growing consumer demand for a greater diversity of traditional and innovative, locally produced beer. In addition to Fuller, Smith & Turner and Shepherd Neame, other regional brewers such as Marston’s, Greene King and St Austell Brewery, have been driving and benefiting from the revival in real ale.

Craft Brewing Renaissance

Julia Austin, managing director of Tyne Bank Brewery, with head brewer Mark McGarry.

The real ale renaissance has also seen the number of breweries in the UK, which had fallen to just 200 in 1970, increase to over 750 last year. The latest of these new craft breweries is Tyne Bank Brewery, a 20 barrel plant, opened in the North East of England. The enterprise has been established on the site of the old Hadrian & Border Brewery by former chemical engineer Julia Austin, who aims to sell her ales to independent pubs, wholesalers, chains, private individuals and event organisers in the North East region.

Dairy Consolidation

Meanwhile on the international front, French group Lactalis is about to become the world’s largest producer of dairy products after receiving clearance from the European Commission to proceed with its Eur3.4 billion bid to acquire the 71% of Parmalat, its Italian counterpart, that is does not already own.