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8 June, 2006 - 08:33 By Staff Reporter

Awesome Wells shows sector’s no small beer

Two weeks ago the Charles Wells and Young’s breweries shocked the ale world with the announcement that Young’s would transfer its brewing operation from the historic Wands-worth Ram Brewery, where beer has been in production for 425 years, to Bedford, forming a new brewing powerhouse in the East of England.

While the decision caused concern amongst traditionalists, Londoners and real ale fanatics fretting about where their next pint of Waggledance would come from, it was just the latest chapter in the story of an industry thriving in tumultuous times at every level.

At the bottom end, Government incentives and reforms are producing a boom in small breweries. Meanwhile the top end of the spectrum the region’s brewers are seeing the worth of solid investment in up-to-date processes.

It wasn’t just the shine of the hungry London property developers’ silver which convinced beery London institution, Young’s, to shift its operations, but also the cost of upgrading its facilities to match the pace of regional competitors such as Wells, Greene King, Cobra Beer and Adnams.

Young’s Ram Brewery lay in the middle of a key generation area identified in the Mayor’s Draft London Plan of 2003. Board discussions with the borough council took place followed by a comprehensive assessment of the development potential of the sites and its future brewing options.

In addition to the interest Young’s began to receive from property developers in the potential of the Wandsworth sites, the board’s review made it clear that the age, layout and location of the Ram Brewery made it uneconomic to invest in improving the structure and efficiency of its operation. The Charles Wells integration prevailed over alternative plans with cost savings for the continuing Young’s retail business expected to result in an annualised net positive impact on profits of at least £2.5m.

Young’s chairman, John Young, said: “This move will help to safeguard the future of Young’s and greatly strengthen cask beer’s overall position in the market. The new company will have a modern brewery, with its own supply of natural mineral water.”

And the broader industry? From its base in Bury St Edmunds, Greene King has grown to become one of the South’s leading breweries, with much of the recent growth underpinned by money-making pub acquisitions.

Since 1996 these have included: The Magic Pub Company; Beards of Sussex; The Marston’s southern estate; Morland; Old English Inns; Dalgety Taverns; Morrells of Oxford; and The Laurel Pub Company.

In the last year it also took in Essex brewer, T D Ridley & Sons for £45.6m and The Belhaven Group one of Scotland’s oldest and largest regional breweries.

Cobra Beer was first brewed in Bangalore in 1990 and was imported to the UK for seven years. In 1997, Cobra started brewing under licence with Charles Wells and now it is brewed in the UK, India and across Europe.

Cobra Beer now turns over £80m a year and the days of varsity paucity are a distant speck on the horizon. Further international expansion is inked large in the strategic Cobra blueprint through a mixture of organic growth and acquisition, and a flotation on London’s AIM market should be effected within the next 12 months.

The value of modern brewing systems is not lost on the other local and smaller brewers such as Adnams in Southwold, Suffolk, though not without some trepidation.

Previously brewing in more or less the same way for over 130 years and resisting wave after wave of technological innovation, following intense research the company is finally convinced it can crack the new machinery and has added new fermenting capacity three times in recent years to cope with the demand for its beers.

In 2007 it will complete a six-year process of renovation and upgrading, which will make it the most energy-efficient brewer in the country and head brewer Mike Powell-Evans assures: “The very high standard of Adnams beers will be maintained. The two systems will be run in parallel for a short time to ensure exact taste matching.”

The importance of the taste of a pint of ale is not lost on the current generation of drinkers, in fact quite the opposite. According to the Campaign for Real Ale (Camra), the number of real ale drinkers in the UK is on the rise and Britian now has more small breweries per head than any other country.

In his last Budget, the Chancellor of the exchequer, Gordon Brown, acknowledged this growing small business niche, providing small breweries with the opportunity to save 15 pence on every pint of beer brewed.

While this has helped offset the extra duty paid by the beer drinker, fears are growing about the effect on the trade of the imminent smoking ban, though many would see the new licensing laws as a powerful counter-balance.

Though not quite hitting the Yorkshire numbers, this drinker’s resurgence is still very much welcome in the East of England where its full range of breweries, from the small artisan to the large plc, from Mumbai to Mersea Island, continue to excel.

 

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