The Bar Man, by Jeff Hoyle, February 8, 2019
The names trip off the tongue of all beer lovers. Watney’s of Mortlake, Whitbread at Chiswell Street, Youngs Ram brewery of Wandsworth, all gone along with many more great companies.
The names may still live on, but the beer is made elsewhere. Only one remains, Fullers of Chiswick, the last of the great family brewers in the capital – or it was until last month, when it was announced that they have sold the brewing, distribution and wholesaling business to Japanese brewer Asahi for £250 million, leaving Fullers as a property company retaining its pubs and hotels.
Famous for London Pride and ESB, Fullers has been in business for over 170 years and worked hard to increase its profile, with London Pride one of the top ten brands of cask ale in the country and a frequent guest ale in places such as the Rathskellar in Lynn.
As usually happens in takeovers of this type, Asahi have committed to keeping the brewery at Chiswick open and to continue to produce the well-known brands. History suggests that this might be revised in a few years.
A similar promise was made when Youngs combined with Charles Wells, but the Ram brewery in Wandsworth closed in 2006 and redevelopment of the site was announced a few years later.
Fullers have been involved in takeovers themselves. Gales of Horndean fell into their clutches in 2005 and lasted less than a year before production of HSB and other fine ales was moved to Chiswick.
As recently as last year Fullers took over Dark Star brewery, complete with promises of investment and growth for the West Sussex producer of the excellent Hophead beer.
Optimistic quotes about expansion and investment look a bit hollow now, as the future of the Dark Star operation is absent from the press release concerning the Fullers takeover, as a commitment to the future of Cornish Orchards, another recent acquisition.
I guess most people have never heard of Asahi, unless they have taken the cruise on the river in Tokyo, where they may have passed the headquarters, a building designed to look like a pint of beer with a foaming head. You may well have come across some of the brands that they have recently captured, such as Peroni, Grolsch and Pilsner Urquell.
They are now the third biggest beer group in Europe. Fullers will continue to purchase products from them as a ‘key supplier’ after the deal is voted through by shareholders. And it will be, as the share price soared after the announcement, possibly as a result of the company announcing around £65 million will be returned to shareholders.
The financial papers suggest the offer was far too generous, with a figure of about half that paid being suggested as reasonable by some commentators. It is understandable it was accepted, as companies legally have to maximise income for shareholders.
It is less clear why the offer was made. My own view, for what it is worth, is that the brewery is the jewel in the crown. A few years ago, I went down to Chiswick for a look around Hogarth’s house and it seemed an opportune moment to have a pint in the brewery tap, just down the road. It is by the banks of the Thames and there are some lovely and probably quite expensive houses close by.
I predict that in about 10 years’ time, the brewery will be posh flats and the beer contract brewed elsewhere. Anybody prepared to bet against me?