Marston’s toasts £780m Carlsberg venture
MARSTON’S has announced plans to merge its brewing arm with Carlsberg UK, in a joint venture worth £780m.
The move, the latest in a series of deals within the UK beer industry, will establish the Carlsberg Marston’s Brewing Company. The Wolverhampton-based firm will own a 40pc stake of the joint venture and receive a cash payment of as much as £273m, it said.
Last week, Marston’s secured a £70m short-term loan to help it through the Covid-19 pandemic, which has forced its pubs to shut.
The firm’s brewing assets, which include the Hobgoblin and Lancaster Bomber brands, were valued at up to £580m, with Carlsberg UK’S brewing division valued at £200m. Shares in Marston’s doubled after the announcement. The stock is still trading more than 40pc below its mid-february price. Marston’s said it would focus on its pub and accommodation business.
Separately, Carluccio’s, the restaurant chain, has been rescued by Giraffe and Boparan Restaurant Group in a deal that will save 30 sites, but lead to more than 1,000 job losses.
The extraordinary damage that is being inflicted on the economy is becoming clearer with almost every passing day. No corner of commerce has escaped unharmed but some industries, such as retail, will be completely redrawn. Lockdown is tearing the high street asunder. Retail sales have collapsed. April’s 18pc fall is by far the steepest downturn since the Office for National Statistics started collecting data in 1996, obliterating a 5.2pc drop in March, itself a new record.
Clothing sales plunged by half; 14pc of stores reported zero turnover last month; almost 40pc of department stores generated no income at all.
Separate figures from Springboard researchers show that the number of shoppers on the high street, in retail parks and shopping centres plummeted by 80pc in April.
The industry will convince itself that this is a blip, that the bottom has already been plumbed and that the rebound is under way as people start to emerge from their homes.
But retailers are fooling themselves. The end of lockdown will be a false dawn. Shopping will never be the same again – forget face masks, one-in one-out and Perspex screens, social distancing alone will see to it that more of us stay at home at least for the foreseeable future.
The pandemic has turbocharged the shift to online at the expense of old-fashioned bricks and mortar. Online shopping as a proportion of all retail reached a record high of 30pc. Seasoned retailer Theo Paphitis reckons the pandemic has accelerated the move by five years.
Over the past decade, an entire industry of insolvency experts, restructuring specialists and vulture funds has got fat, keeping scores of old-fashioned chains alive through
CVAS, debt for equity swaps and pre-pack administrations. Investors desperate to avoid losing their shirt have pumped in emergency funds, throwing good money after bad and prolonging the inevitable.
A giant clear-out awaits – fewer shopping centres, retail parks, department stores and failing fashion chains.
The impact on employment will, of course, be grave. Retail is one of the UK’S biggest employers. The hollowing-out effect on villages, towns and cities where most of us live will be profound, too.
It’s not just shops that are vanishing. Thousands of bank branches have closed. Restaurant failures have doubled. All of this sucks income from local economies. It leaves people feeling isolated and weakens communities.
Against such a bleak backdrop, optimism is in short supply. Yet, a reimagined high street can eventually emerge from the rubble, replacing uninspiring identikit town centres teaming with pound stores, payday loan providers and bookmakers.
This is a chance to rethink what we want the places where we live to look like. It is an opportunity for regeneration, to replace scores of empty properties with more housing. We may become more cautious but people will still want first-class leisure and entertainment, communal spaces to socialise, commercial offices and even shops, just fewer of the type that exist now.
Local, independent traders can step in, taking over the leases of boarded-up premises, but landlords will have to take their share of the pain and the business rates system needs to be abolished.
A rebirth can take place but it will take genuine entrepreneurialism, clever town-planning, enlightened policymaking and local leaders to be put right at the heart of it.
Purists fear for Marston’s
“Bang goes Marston’s,” said one Twitter user. Within minutes of the British brewer announcing a merger with Carlsberg’s UK arm, real ale drinkers were already drowning their sorrows.
Marston’s shareholders took a different view, its share price leaping 85pc on the news.
In fact, it’s not really a merger at all. The pair are putting their brewing operations into a joint-venture and Wolverhampton-based Marston’s will hold on to its 1,400 pubs. Still, purists will fear that the main aim is to flood Marston’s premises with Carlsberg lager. That seems inevitable.
A bigger concern is what this means for Marston’s brewing operations. Its six breweries include Wychwood & Brakspear in Oxfordshire, which makes Hobgoblin beer, and the Park Brewery, which produces Revisionist Craft Lager.
With 60pc of the joint-venture, Carlsberg has the upper hand. All good parties end with a hangover.
‘The end of lockdown will be a false dawn. Shopping will never be the same’