With Carlsberg sales declining, and pubs still closed in the UK, this joint venture smartly repositions both companies as they look to a “new normal,”
Here’s what we know…
On Friday the Carlsberg Group announced that they will combine their brewing arms to form a £780m business that will allow the two companies to merge operations and save costs.
Listed on the London Stock Exchange, Marston’s is one of the UK’s biggest pub operators, but they also run several breweries throughout the country as well as a hotel chain, all of which have taken a significant hit due to the coronavirus lockdown.
Multinational Danish brewer, Carlsberg is feeling the impact of the coronavirus as well, having recently reported 7.4% I decline in the first quarter sales due to its impact and CEO Cee’s t’Hart warning that “the worst is yet to come.” So this proposed alignment might be right on time.
The new business, called Carlsberg Marston’s Brewing Company, will oversee Carlsberg UK’s Northampton brewery, London Fields brewery, a national distribution center and Marston’s six national and regional breweries – Marston’s, Banks’s, Wychwood, Jennings, Ringwood and Eagle – along with 11 additional distribution depots.
Described as a “strategic partnership,” the new deal will allow Carlsberg enhanced access to the pub operator’s almost 1400 properties, as well to Marston’s Beer Company’s wide distribution network which services more than 11,000 customers in the UK.
According to Carlsberg’s Cees‘t Hart, the new venture is a step forward…
“The joint venture’s brand portfolio will allow us to offer a significantly stronger beer portfolio to our UK customers, and at the same time extend distribution into the Marston’s pub estate. In addition, the combined business will bring our customers wider choice, greater capacity, product innovation, and marketing and distribution efficiency benefits.”
Current Carlsberg UK managing director, Tomasz Blawat, who will become the new venture’s chief executive officer, was understandably bullish about the new venture he will be overseeing…
“Marston’s strong heritage, extensive distribution platform and established reputation for brewing and logistics excellence, together with Carlsberg UK’s global brand portfolio and scale, combine the best attributes of both to create a compelling beer business with an outstanding portfolio of global and local beer brands, proven brewing expertise, strong distribution network and wholesale opportunity.”
Last year, Carlsberg spent £20 million on an ad campaign last year as it changed the recipe for its flagship beer, which the brewery admitted was “probably not the best beer in the world,”
That beer has now been replaced with Carlsberg Danish Pilsner.