Another pub chain is lost to a mega brewer

THe owner of Magners cider and Tennent’s lager is to snap up hundreds of pubs as it becomes the latest brewer to buy big chains.

C&C yesterday announced a joint takeover of Admiral Taverns with Proprium Capital Partners, in a deal understood to value the company at £220m.

it will see the brewer gain control of Admiral’s 845 pubs across england and Wales and follows a similar £400m takeover of Punch Taverns by Heineken.

Both deals will allow the companies to ensure that their top brands stay prominent at the hand pumps at a time when they are under growing pressure.

Big breweries are competing for space at bars against popular local craft brewers, with analysts saying a shift toward food and premium drinks at many pubs is also squeezing sales of mainstream beers.

Other players such as Carlsberg and AB inBev have responded by buying out craft rivals. C&C yesterday said its deal would give it ‘direct reach’ to customers in pubs and provide good returns.

Chief executive stephen Glancey added: ‘ The investment will provide our brands with improved distribution in some of the best community pubs across the uK, with an opportunity to enhance on-trade penetration further over time.’

Admiral Taverns posted profit of £15m for the year to the end of May 2016, up from £4.5m the previous year.

Chief executive Kevin Georgel, who will remain in post, said: ‘i look forward to working with the support of our new investors to continue to build on the significant progress the business has made over the last five years and take advantage of the opportunities within our markets, as and when they arise.’

Consumers are choosing ‘quality over quantity’ when it comes to alcoholic drinks, according to market analysis firm Mintel.

Richard Caines, a senior food and drink analyst, said: ‘Alcoholic drinks saw an increase in pub sales, in contrast to a decline in volume sales.

‘The latter reflected moderation in the consumption of alcohol, more drinking at home and the shift among pubs towards a higher proportion of venues becoming food-led.’

He said more than 90pc of British people still went to pubs or bars, however, despite their declining numbers.

Hargreaves Lansdown analyst nicholas Hyett said: ‘Although this is partly to do with distribution it is just as much a brand awareness exercise.

‘ Large brewers are playing catch-up with the local brewing revolution, which has given landlords a lot more choice, and so being able to make sure your drinks are in front of consumers at bars is a very attractive offer.

‘investors also like pub companies, because they generate pretty consistent revenues.’

C&C made a loss of £63m in the year to the end of February, down from a profit of £56m the previous year.

This was partly due to a one-off writedown of £107m.