CAMRA has sounded a warning for beer drinkers as a Hong Kong investment company takes over one of the UK’s biggest brewers of cask ale producers and pub operators.
CK Asset Holdings (CKA) has bid £2.7 billion for Greene King, and the offer has been unanimously accepted by the Suffolk company’s board. CKA has also agreed to take on a further £2 billion of debt of the Bury St Edmunds based company.
The Campaign has expressed fears about the takeover of the company, which employs more than 38,000 people and owns more than 1,900 pubs.
National chairman Nik Antona said: “The news that Britain’s largest pub and brewery company has been sold to an international asset company is very concerning for our beer scene.
“We are always wary of one company controlling a large share of the market, which is seldom beneficial for consumers. Greene King has been in operation for over 200 years and it is a very sad day to see such a well-known, historic and respected name exit the brewing and pub business.
“We hope that Greene King will continue its operations as normal without any disappointing changes. We will be calling on the new owners to retain the current pub portfolio to safeguard thousands of pubs and jobs across the country.”
Bury St Edmunds MP Jo Churchill and union officials at Unite are seeking urgent talks to establish that Greene King will retain its full presence in the town and that jobs are not at risk.
Unite regional officer Mark Jaina said the union would be seeking an urgent meeting with Greene King as well as with the management of CKA.
“This is a major takeover of a well-known British company with a long history in brewing and pub ownership built up over 220 year.”
But he added, It could have major ramifications for this sector, given the magnitude of the takeover.
Brewing trade association SIBA raised fears that the takeover would reduce the sale of its members’ beers in Greene King pubs.
SIBA chief executive James Calder said “Many small independent brewers have beer on bars in Greene King pubs.
“We hope (the) announcement won’t impact on the choice of both landlords and consumers have when picking a local beer.
“We look forward to working with Greene King ‘s new owners to ensure their pubs continue to have access to the widest choice and quality of beer possible that can only come from small independent suppliers.”
The deal is the latest in a series of acquisitions of British brewing pub companies. Private equity firm TDR Capital – whose pubs include the Slug and Lettuce, Yates, and Walkabout chains – in July agreed to buy the UK’s EI Group, with more than 4,000 pubs for about £1.3 billion.
It is the second time in 12 months an Asian company has taken over a British brewer. In January, Asahi bought the 175 year old family owner Fuller’s for £250m.
The CKA deal also follows Anheuser-Busch InBev NV’s sale of Australian beer assets to Asahi Group Holdings in a deal valued at about $11 billion.
In recent years some of Britain’s new wave of breweries have proved attractive to international buyers, buying up Camden Town (AB InBev), Beavertown (Heineken has a minority stake) and Meantime (originally ABInBev but now owned by Asahi).
In 2017, Carlsberg bought London Fields Brewery, which was put up for sale after its founder was charged with tax fraud.
Earlier this year Australia’s Lion bought Magic Rock, a year after buying Bermondsey-based Fourpure, while Molson Coors bought Hop Stuff.
Other popular beers owned by global firms, include Goose Island, Blue Point, Hop House 13, Blue Moon, Sharp’s Doom Bar and Lagunitas.
In a statement CKA said it has invested in the United Kingdom pub sector and owns a small portfolio of freehold pubs, all of which are leased to the Greene King Group.
CKA already leases Greene King pubs 162 pubs in which it already held a 2.9 per cent stake.
“The specific attractions of Greene King include its – established position in the United Kingdom pub and brewing market; freehold and long leasehold backed property estate; and resilient financial profile.
“CKA’s strategic philosophy is to support management teams to develop and implement plans which create long-term value. This is underpinned by access to strong financial backing. CKA believes it has the financial resources to invest capital in new initiatives, where appropriate, to improve the sustainability, profitability and competitiveness of Greene King.”
Greene King brews some of the UK’s most popular ales, including IPA, Abbot and Old Speckled Hen. In 2015 IPA was swept onto the international stage when China’s president Xi Jinping drank a pint of the beer with then prime minister David Cameron in a Buckinghamshire pub.
Greene King also owns one of Scotland’s oldest brewing sites, Belhaven in Dunbar.
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