Danish brewer Carlsberg and British pubs and cask ale firm Marston’s have announced a joint venture, prompting concern among small brewers who fear being squeezed out of the market.
Shares in Marston’s surged by 36%, recovering some of the value lost since the Covid-19 lockdown shut pubs across the country, as investors applauded the tie-up.
Under the deal, the Danish firm will own 60% of the new Carlsberg Marston’s Brewing Company with Marston’s holding 40% and receiving a cash payment of up to £273m.
The new business will offer a mix of Carlsberg’s mass-market lagers and Marston’s cask ale brands such as Hobgoblin and Pedigree, and will also be able to feed Carlsberg beers into Marston’s estate of around 1,400 UK pubs.
The Society of Independent Brewers (SIBA), the trade body representing small breweries, warned the deal could make it harder for independent beer firms to get their beers into pubs.
“This merger is the latest in a series of consolidating measures within the UK beer market,” said SIBA chief executive James Calder.
“It has the potential to take the Marston’s brand global and brings Carlsberg back into the distribution and porterage business only after a few short years of leaving it. This merger yet again has the potential to impact negatively on small independent brewers by further reducing the access to market they receive.”
Despite the growth of craft beer in the UK over the past decade, small breweries have struggled in the face of a fightback from global brewing giants, some of which have sought to cash in on changing tastes by buying out smaller operators.
These include Carlsberg’s own takeover of London Fields, as well as Heineken’s investment in Beavertown, and the deal that triggered a wave of buyouts – Budweiser owner AB InBev’s deal for Camden Town Brewery.
Carlsberg’s group chief executive Cees ‘t Hart said the deal would bring customers “wider choice, greater capacity, product innovation and marketing and distribution efficiency benefits”.
The chief executive of Marston’s, Ralph Findlay, said: “This new partnership acknowledges Marston’s strategy, position and consistent outperformance against the UK beer market, realising value for shareholders today, whilst retaining an interest in the future upside of the combined entity.”
Analysts at stockbroker Jefferies described the joint venture as “attractive”, pointing to benefits including one-off synergies of £32m and annual savings of £24m by the end of the venture’s third year.