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Interbrew UK, formerly Whitbread Beer Company, could be soon joined by Bass Brewers, controlling 33% of the UK beer market. Chris Brook-Carter talks to Stewart Gilliland, Interbrew UK's sales and marketing manager, about the future plans of the world's No2 brewer-in-waiting

Only the bureaucratic wheels of the EC's monopolies commission now stand between Belgian brewer Interbrew and a successful conquest of the UK's brewing industry. But as the industry takes stock of the massive change hitting this mature market, Interbrew's expansion plans appear far from finished.

In an interview with just-drinks.com, Interbrew UK sales and marketing manager Stuart Gilliland has said he believes that this year's international acquisition strategy is unfinished business.

"We are continuing to look at acquisitions around the world. I certainly do not think, with an international perspective, that this is the end of the acquisition strategy."

However, despite the rewards of buying what analysts believe will be a 33% in one of the most influential and historic beer markets in the world, Gilliland believes Interbrew's next move will be in the emerging markets of Asia or eastern Europe.

"There is a need for balance between mature and developing markets. This [the Whitbread and Bass deals] was a big move in a developed market but we are continuing to look at eastern Europe and Asia for opportunities."

Gilliland, formerly of Whitbread's brewing arm, said that Interbrew had earmarked many markets for developing business as part of an international push to cement its number two position in the brewing world.

However, he hinted that while the importance of Stella Artois, Interbrew's flagship brand, remained high the strategy of the business was to continue to develop local brands in local markets.

The success of Interbrew's main rivals, Anheuser-Busch and Heineken, is built almost solely on the back of the leading brands, Budweiser and Heineken respectively. Yet despite the dominance of Stella Artois at the premium-end of markets such as the UK, the Belgian firm has successfully kept a firm grip on its reputation as the "world's local brewer."

"We have a lead brand but respect local brands in local markets, this is key to Interbrew's success so far," said Gilliland. "I think there are lots of links around the world where there is the potential to build portfolio's that are appropriate to the local markets. Although Stella is going to be the lead brand, it is still no where near the share of the business that Heineken and Budweiser have within their parent companies."

But whatever Interbrew's feelings for local brands, Gilliland admitted that there would have to be a rationalisation of the UK portfolio. "We will continue to review our portfolio in terms of new product introductions, but also in terms of rationalising the tail," he said.

Speculation so far has surrounded the future of the real ale category. A news report late last month in just-drinks.com quoted a source close to the company questioning the future of Flower's and Wadsworth 6x.

Gilliland said: "6x is one of our core brands and remains core. We have a long time to run on the contract and 6x will remain our lead cask ale."

Gilliland was also at pains to stress the continued importance of Whitbread's lead ale Boddingtons. "We are keen to find ways to exploit this brand internationally. We have done some of that as Whitbread, in particular in the States, but having access to all the international networks that Interbrew has could be an enormous boost."

However, the future of Flower's looks nothing like as assured. "Flower's is still part of the portfolio but it is not a core development brand. It does not get above the line activity and it hasn't done for many years now," he admitted.

And, whatever conditions the EC imposes on Interbrew, when it rules on the acquisition of Bass, the bitter category still looks the most likely to be rationalised if market share needs to be brought down.

Of the enlarged lager portfolio Interbrew will have if the Bass deal is a success, Gilliland said: "The consumer is becoming more lager orientated. Sixty percent of sales are in lager now and this will be 70% by 2005. There are already many outlets where ales are not even stocked, and consumers will want choice in the lagers they are presented with."

With this in mind it comes as no surprise to learn that Interbrew UK already has plans to launch its first brand after the dust settles on the Bass deal. Already in 40 test outlets, the company is taking Belgian lager Leffe into the next stage of development and launching it nationally in the near future.

Whatever the make up of Interbrew's final portfolio, the brand list will make for impressive reading. Rumours that South African Breweries is proposing a buyout of the UK's other big national player Scottish & Newcastle are apparently not fazing Interbrew yet. But as Gilliland points out, with control of the country's leading premium and standard brand they need not be unduly worried.

www.interbrew.com

www.bass.com

Top GB Beers/On Trade

 
Value £m
Volume 000s brls
Carling
£1177m
+ 7%
2316
+ 3%
Foster's
£1047m
+ 10%
1959
+ 6%
Guinness
£756m
+ 9%
1296
+ 5%
Carlsberg
£617m
+ 11%
1156
+ 7%
Stella Artois
£605m
+ 22%
968
+ 18%
John Smith's
£572m
+ 11%
1242
+ 6%
Heineken CF
£462m
+ 4%
891
+ 1%
Tetley's
£375m
+ 8%
810
+ 4%
Budweiser
£332m
- 7%
343
- 10%
Worthington
£322m
+5%
719
+ 1%

Figures in brackets represent position in 1998. Source: AC Nielsen/GB/YE Dec 99

Top GB Beers/Take Home

 
Value £m
Volume 000s brls
Stella Artois
£244m
+ 22%
678
+ 24%
Carling
£146m
+ 29%
581
+ 29%
Budweiser
£101m
+ 5%
232
+ 3%
Foster's
£86m
+ 22%
355
+ 34%
Heineken CF
£70m
+ 17%
253
+ 11%
Total John Smith's
£56m
+ 17%
177
+ 18%
Kronenbourg
£55m
+ 36%
171
+ 42%
Beck's
£54m
+ 34%
110
+ 40%
Total Boddington
£51m
+ 10%
152
+ 17%
Miller Pilsner
£50m
- 2%
184
- 10%

Figures in brackets represent position in 1998. Source: AC Nielsen/GB/YE Dec 99

If you are interested in the off-trade sector, please refer to Take Home Trade by Keynote: http://just-drinks.com/store/products_detail.asp?art=10182