UK: Pub closures no bad thing - Coors CEO
A quarter of UK pubs are likely to disappear over the next decade, but this is "no bad thing" for the beer industry, according to the CEO of Carling lager producer Coors Brewers.
Up to 25% of pubs in the UK may have to close their doors for good in the next 5-10 years, Mark Hunter, CEO of Molson Coors' UK business, told an analysts conference hosted by the Canada-based brewer in New York yesterday (4 March).
Instead of calling for measures to help prop up the sector, Hunter said: "To be honest, that's probably no bad thing, because these are pubs from a period in history where their proposition is no longer relevant, where we've changed from an industrial society to more of a service industry."
His comments contrast with the "save the pub" campaign that has been launched by the British Beer and Pub Association (BBPA), and which has garnered support from more than 100 members of the UK Parliament, including the leadership of the Conservative Party, the main opposition party.
Around 40 pubs are closing down every week, according to figures released by the BBPA, which said yesterday that 20,000 jobs have been lost across the industry since the last government budget.
The trade body blames an 18% rise in beer duty tax last year for exacerbating the pressure on pubs, which have seen beer sales drop to their lowest level for 70 years.
Coors' Hunter told analysts yesterday: "Those pubs that survive will have strong hospitality propositions and consumers will enjoy a better experience in the medium to long-term."
He said the UK drinks market faces a "material change" from on-trade to off-trade over the next decade. "By about 2018, off-trade will about 70% of the market, with on-trade down to 30%, from the current 50-50."
On-trade beer sales by volume slipped by 10% in the final quarter of 2008, according to the BBPA, with total beer market volumes down 5.5% for the year.
Molson CEO and president Peter Swinburn said yesterday that Coors UK has grown market share for its Carling brand over the last year, while also introducing "margin-building brands" Coors Light and Blue Moon.
Despite headwinds in the market, including from tax rises and the on-trade smoking ban, Swinburn remained positive about the UK market.
"The UK has even more innovative ideas in the pipeline, we're really encouraged by the progress we're making in that very difficult market."
BBPA spokesperson Mark Hastings told just-drinks this afternoon that pub closures often mean the loss of a vital community amenity.
He said government ministers have shown that they "are alive to ideas about what they can do" to help.
But, he added, it is vital that the government does not restrict pubs' ability to adapt to a changing market by increasing the regulatory and tax burden on the on-trade.
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