The Oxfordshire family brewery WH Brakspear & Sons announced yesterday that it will be closing its Henley brewery after more than 220 years and concentrating on its tenanted pub estate.
The Henley brewery site is to be sold, and responsibility for brewing, marketing and distributing Brakspear's ales will pass to Refresh, the beer brands specialist that recently acquired the Wychwood brewery.
The move by Brakspear to becoming a pure pubco throws a sharp light on the intentions of JT Davies, the Croydon-based pub company that now owns a fraction under 30% of the Henley company's shares.
Most of the rest of the stock is owned by several hundred small shareholders, descendants of the families that have run Brakspear's in the past. With the company no longer a brewer, their sentimental attachment to owning a slice of beery heritage is likely to lessen considerably, and their willingness to sell up to a predator increase correspondingly.
Brakspear's chairman, Mike Foster, blamed the "ever increasing" pressure from pubcos for discounts and Gordon Brown's exclusion of companies the size of the Henley brewery from the progressive duty tax break granted in the last Budget to smaller brewers for the company's decision to quit making beer.
He said the strategic review of Brakspear's business activities, announced back in March, had concluded that the company could not continue to sustain the "substantial" losses incurred by the brewing operation.
Foster said: "The brewing industry has faced seismic change in recent years, which has seen the economics of brewing become increasingly difficult for vertically integrated companies such as Brakspear. The profitable sales of Brakspear beer to our pub estate are in gentle decline and in the free trade we are faced with ever increasing pressure for discounts.'
The Henley brewery will close by the end of this year with about 35 job losses, Foster said. He said: "This decision has been a difficult one for a company with our heritage, but we must look to the future. It is our responsibility to identify and implement the best way forward for our shareholders and stakeholders." The strategy would enhance Brakspear's underlying profitability, enable significant value to be realised from the sale of its site in Henley, and also ensuring the survival of Brakspear's ale brands, he said.
Refresh is now looking for a site to establish a smaller specialist brewery to brew Brakspear beer. Rupert Thompson, Refresh's chief executive, said: "By transferring equipment and brewing expertise to a local brewery and continuing respect for the traditional brewing craft with a modern marketing approach, we can preserve these great beers for future generations."
Foster said Brakspear intends to remain based in Henley on Thames and concentrate the future of its business around its 100 pubs and its property estate in the Thames Valley. He said: "The ambitious plans we have for the development of our pub estate continue. Over £3m is to be spent on five major pub projects together with a number of other smaller schemes during the rest of 2002 and into 2003. A further seven projects are in the pipeline and we continue to seek new pubs to expand our licensed estate."
Camra, the Campaign for Real Ale, has been running a drive to try to persuade Brakspear's to stay in brewing. Foster said the company had met with Camra to discuss the brewing of Brakspear's beers by Refresh, "and we are looking for them to work with us to support this new approach to ensure the quality and consistency of our beers are maintained."
The Henley brewery site is to be sold, and responsibility for brewing, marketing and distributing Brakspear's ales will pass to Refresh, the beer brands specialist that recently acquired the Wychwood brewery.
The move by Brakspear to becoming a pure pubco throws a sharp light on the intentions of JT Davies, the Croydon-based pub company that now owns a fraction under 30% of the Henley company's shares.
Most of the rest of the stock is owned by several hundred small shareholders, descendants of the families that have run Brakspear's in the past. With the company no longer a brewer, their sentimental attachment to owning a slice of beery heritage is likely to lessen considerably, and their willingness to sell up to a predator increase correspondingly.
Brakspear's chairman, Mike Foster, blamed the "ever increasing" pressure from pubcos for discounts and Gordon Brown's exclusion of companies the size of the Henley brewery from the progressive duty tax break granted in the last Budget to smaller brewers for the company's decision to quit making beer.
He said the strategic review of Brakspear's business activities, announced back in March, had concluded that the company could not continue to sustain the "substantial" losses incurred by the brewing operation.
Foster said: "The brewing industry has faced seismic change in recent years, which has seen the economics of brewing become increasingly difficult for vertically integrated companies such as Brakspear. The profitable sales of Brakspear beer to our pub estate are in gentle decline and in the free trade we are faced with ever increasing pressure for discounts.'
The Henley brewery will close by the end of this year with about 35 job losses, Foster said. He said: "This decision has been a difficult one for a company with our heritage, but we must look to the future. It is our responsibility to identify and implement the best way forward for our shareholders and stakeholders." The strategy would enhance Brakspear's underlying profitability, enable significant value to be realised from the sale of its site in Henley, and also ensuring the survival of Brakspear's ale brands, he said.
Refresh is now looking for a site to establish a smaller specialist brewery to brew Brakspear beer. Rupert Thompson, Refresh's chief executive, said: "By transferring equipment and brewing expertise to a local brewery and continuing respect for the traditional brewing craft with a modern marketing approach, we can preserve these great beers for future generations."
Foster said Brakspear intends to remain based in Henley on Thames and concentrate the future of its business around its 100 pubs and its property estate in the Thames Valley. He said: "The ambitious plans we have for the development of our pub estate continue. Over £3m is to be spent on five major pub projects together with a number of other smaller schemes during the rest of 2002 and into 2003. A further seven projects are in the pipeline and we continue to seek new pubs to expand our licensed estate."
Camra, the Campaign for Real Ale, has been running a drive to try to persuade Brakspear's to stay in brewing. Foster said the company had met with Camra to discuss the brewing of Brakspear's beers by Refresh, "and we are looking for them to work with us to support this new approach to ensure the quality and consistency of our beers are maintained."
