What's Brewing at Whitbread
What’s brewing at Whitbread?
Below is summary of macro factors that influenced Whitbread’s decision makers to exit the brewing industry.
Prior to 2000, the UK market for beer peaked in 1979 of approximately 41.2 million barrels (BBPA, 2008) in combined on-trade and off-trade, sales. Since then there has been a decline due to sociocultural & socioeconomic factors.
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Up until the 1980’s, socialising in a local pub or working man’s club was largely male oriented with the consumption of beer common. However, a slow socio-cultural change began to gather pace as the British population began a shift from viewing the pub purely as a place to drink beer as pubs also started become a place to dine, especially for families. Wine increased in popularity as a consequence of increased exposure of UK residents to mainland European culture through tourism. This lead to a move from the pub to the ‘wine bar’ as a result of being perceived to be more female friendly during a period of women’s social emancipation. (The Economist, 1996).
The introduction of the European Single Market in 1993 along with lower duty, VAT and other taxes in Europe on alcoholic beverages much lower than in the UK was another socio-economic effect. The advent of the “Booze Cruise” had a major effect on beer sales, with individuals being able to bring home significant quantities of not only beer but wine and spirits for “personal consumption.” Many British mainland residents, especially in the south east were able to take advantage as significant savings could be made, even with the cost of the fuel and ferry taken into account. This has also escalated beyond personal imports into the criminal realm of bootlegging (Economist, 1999). HM Customs and Excise officials tried to impose guidelines as limits, but were prevented from doing so by the European Commission (Jones, 2001) allowing UK citizens to effectively import whatever quantities they could transport allowing smugglers break the law
Below is summary of macro factors that influenced Whitbread’s decision makers to exit the brewing industry.
Prior to 2000, the UK market for beer peaked in 1979 of approximately 41.2 million barrels (BBPA, 2008) in combined on-trade and off-trade, sales. Since then there has been a decline due to sociocultural & socioeconomic factors.
[pic]
Up until the 1980’s, socialising in a local pub or working man’s club was largely male oriented with the consumption of beer common. However, a slow socio-cultural change began to gather pace as the British population began a shift from viewing the pub purely as a place to drink beer as pubs also started become a place to dine, especially for families. Wine increased in popularity as a consequence of increased exposure of UK residents to mainland European culture through tourism. This lead to a move from the pub to the ‘wine bar’ as a result of being perceived to be more female friendly during a period of women’s social emancipation. (The Economist, 1996).
The introduction of the European Single Market in 1993 along with lower duty, VAT and other taxes in Europe on alcoholic beverages much lower than in the UK was another socio-economic effect. The advent of the “Booze Cruise” had a major effect on beer sales, with individuals being able to bring home significant quantities of not only beer but wine and spirits for “personal consumption.” Many British mainland residents, especially in the south east were able to take advantage as significant savings could be made, even with the cost of the fuel and ferry taken into account. This has also escalated beyond personal imports into the criminal realm of bootlegging (Economist, 1999). HM Customs and Excise officials tried to impose guidelines as limits, but were prevented from doing so by the European Commission (Jones, 2001) allowing UK citizens to effectively import whatever quantities they could transport allowing smugglers break the law
References: The Economist (1996) ‘Down the hatch,’ 3 August pp.56-57 Available via Kingston University ProQuest (Accessed: 17 January 2013) The Economist, (1999) “The Belgian job,” 6th May http://www.economist.com/node/606794 (Accessed: 17 January 2013) Jones, J Osborn, A. and Treanor, J. (2001) ‘Customs told to relax rules,’ The Guardian, Thursday, 25th, October [Online] Available at: http://www.guardian.co.uk/business/2001/oct/25/europeanunion (Accessed: 17 January 2013) The Monopolies and Mergers Commission (1989) The Supply of Beer. [Online]. Available at: http://webarchive.nationalarchives.gov.uk/+/http://www.competition-commission.org.uk/rep_pub/reports/1989/245beer.htm#summary (Accessed: 17 January 2013) Whitbread PLC (1999) Annual Report and Accounts 1998/9. [Online]. Available at: http://miranda.hemscott.com/ir/wtb/pdf/Whitbread_Annual_Report_9899.pdf (Accessed: 17 January 2013) Clark, A., (2000) ‘Whitbread calls last orders for beer,’ The Guardian, 26th, May. [Online]. Available at: http://www.guardian.co.uk/money/2000/may/26/personalfinancenews.business2 (Accessed: 17 January 2013) The Economist http://www.economist.com/node/481937?zid=293&ah=e50f636873b42369614615ba3c16df4a (Accessed: 17 January 2013) Morgan, J., (2011) ‘Why is alcohol consumption falling,’ BBC News Magazine, 15th, February [Online] http://www.bbc.co.uk/news/magazine-12397254 (Accessed: 17 January 2013) McCaskey, D Mintel (2007) ’Budget Hotels - UK - September 2007’ Mintel [Online]. Available at: http://oxygen.mintel.com/display/219276/ (Accessed: 19 January 2013) Whitbread PLC (2005) Annual Report and Accounts 2004/5 http://miranda.hemscott.com/ir/wtb/ar_2004/main2.htm (Accessed: 17 January 2013) Lewis, M., (2011) Premier Inns Strategy is a shrewd move,’ Caterer & Hotelkeeper, 24th June Bowie D. and Buttle F. (2004) Hospitality Marketing – an introduction. Oxford: Elsevier Butterworth Heinemann. Coffee and Caffeine (2007) The Story Behind Costa Coffee Machines. Available at: http://www.coffeeandcaffeine.com/articles/the-story-behind-costa-coffee-machines/ (Accessed: 18 January 2013) Rodenberg, Prof Whitbread (2013) Whitbread / Property / Costa. Available at: http://www.whitbread.co.uk/whitbread/property/costa-property.html (Accessed: 18 January 2013) Whitbread, (2013) Whitbread / Investors / Results & reports / Annual & interim reports