EUROPEAN BREWING INDUSTRY CASE

European brewing industry Case

European brewing industry Case

Task 1

Write a report identifying the major trends in the European brewing industry. This should include a critical analysis of the macro and micro environments and industry structures.

This report will investigate the European brewing industry. The UK brewing commerce is now exceedingly intensified, the year 2000 seen huge alterations in the UK brewing commerce, with the Belgian business Interbrew having become the new foremost in the market, next its buy of the brewing partitions of two of the industry's previous monsters, Bass and Whitbread (Keynotes July 2000).

The European brewing commerce is in the middle of the most important time span of restructuring in its long history. In 2000, the UK beer market was worth £16.42bn, a increase of 9.4% since 1996 (Keynotes June 2001).

The market for beer is static or in down turn (particularly the on trade); there has been no latest important market entry; the transparency of cost in the market, all shows, it is contended, that the market may be susceptible to oligopolistic or duopolistic demeanour (Office of Fair Trading report Sept 2000). 

PESTLE ANALYSIS ON THE BREWING INDUSTRY

PESTLE Analysis involves identifying Political, Economic, Social, and technological influences on an organisation. (Johnson &Scholes)  

 

POLITICAL / LEGAL

·   Rates of excise duty: Brewers in the UK continue to complain about the levels of excise duty in the UK compared with the rest of Europe. Excise duty is as much as seven times higher than in France, resulting in major smuggling operations into the UK. (See appendix 1).

In recent years, the price of beer has risen much faster than the rate of inflation. The duty element, on average, works out to around 33p per pint, with VAT, currently at 17.5%, also payable. Such financial disparity prompts not only UK consumers to travel to France for their beer, but also a growing number of 'professional' smugglers (Source: HMCE/HM Treasury/Mintel).

In January 2000, the Office of Fair Trading announced the start of the Beer Orders legislation, which restricted the number of public houses that the largest brewers can own. In some cases, the restrictions on integration have driven brewers to quit the beer market entirely. Although it has been more than ten years since the first moves to control pub ownership by major brewers were made, the Beer Order of 1989 based on the findings of Monopolies & Mergers Commission investigation; are still having an impact on UK brewing. The Beer Orders of 1989 prevented concentrated and vertical integration by the 'Big Six', but the conservative Government allowed the 1995 mergers that produced Scottish Courage, a dominant new force in brewing.

A bid by Bass to buy Carlsberg- Tetley was blocked by the government in 1997, and ownership of the breweries passed to Carlsberg. Allied Domecq hung on to its pub estate until 1999, when this remnant of its brewing history was sold to Punch Taverns.

In the UK it is compulsory for brewing firms to have a licence, without the licence firms cannot sell ...