![#](www.e-malt.com/images/left_top_corner16x200.gif) | E-Malt.com News article: UK: Molson Coors declares interest in acquisitions in Scotland’s growing craft beer sector![Brewery news](https://e-malt.com/Images/BeerBullet2.gif)
The Scottish arm of North American brewing giant Molson Coors has declared it is open to making acquisitions in the country’s rapidly growing craft beer sector, as it highlighted a boost from two major supply deals with customers in Scotland, The Herald reported on September 5.
The brewer has a track record of acquiring promising craft and real ale brewers, having snapped up Cornwall-based Sharp’s in 2011 and Cork’s Franciscan Well in 2013.
Hugo Mills, head of Molson Coors Scotland, believes the rise of craft and cask beer mirrors consumers’ increasing demand for more niche and local products. And he said the company would “absolutely” consider doing deals in Scotland if the right opportunity arose.
Mr Mills said: “Would we like to enter into that arena for Scotland? Yes, we absolutely would, for no other reason than to reinforce our own commitment to the Scottish marketplace. It wouldn’t have a material difference to our own profitability or commercial set-up. We would rather probably do it because we’d like to be encouraging and supportive of the development of some cracking small craft brewers.
“So if the right opportunity presented itself then yes, we would certainly consider it.”
Despite rapid growth in recent years, craft beer still only accounts for a small proportion of overall beer sales in Scotland. Mr Mills estimates the sector is responsible for four to five per cent of beer consumption north of the Border and believes the market to still be in its infancy.
He said: “To the extent it will have a marked impact on the beer industry, I think it will require quite a few more years to make any material difference. The industry has proliferated in terms of the number of craft brewers. But the actual share of craft consumption still remains fairly small and fairly consistent.”
Molson Coors was recently buoyed by securing a supply deal with Northern Services, the operator of student union bars in St Andrews, Glasgow (Glasgow University Union and Queen Margaret Union) and Belfast (Queen’s). Mr Mills said Northern Services previously had a long-standing supply deal with C&C Group, owner of Tennent’s Lager.
“It gives us, undoubtedly, an absolutely amazing platform now to engage with the next generation of beer drinkers in Scotland,” he said.
It has also just completed a stint supplying the bars at the Pleasance in Edinburgh during the Fringe in August. “It’s got an amazing backdrop for people that are open-minded and trying and experiencing new things,” Mr Mills said. “That works extremely well for a lot our brands.”
Molson Coors continues to increase its share of the overall market in Scotland. Its Scottish unit is currently enjoying double-digit percentage growth, with data from industry analyst CGA showing that its Carling brand strengthened its position as number two brand behind market leader Tennent’s.
Carling grew its market share from 5.9 per cent to 6.3 per cent in volume terms in the year to July 9, while nearest rival Stella Artois saw its share drop to 4.6 per cent from 5.1 per cent. Tennent’s remains out in front with a 64.1 per cent share of the total beer market.
However, Mr Mills noted that the brewer’s strategy in Scotland is no longer as focused on Carling. Its ever-broadening portfolio includes the Swedish cider Rekorderlig, acquired from Chilli Marketing Brands last year, and Czech beers part of the Staropramen family. The brewer is also poised to welcome Miller Genuine Draft into its portfolio thanks to a deal cut in the aftermath of AB InBev’s giant, proposed acquisition of SABMiller.
Mr Mills is satisfied with the momentum Molson Coors is building in Scotland, but is mindful of the challenges the wider licensed trade is continuing to go through, including the continuing shift to craft products and food, and a tough economic and legislative backdrop.
He said: “As Molson Coors, we are certainly growing ahead of the marketplace – our business is (in) double-digit growth. We would be the only brewer in Scotland to be able to say that. We’re moving at quite a pace. What pleases me probably more than the growth is the fact we are positively impacting on businesses... and encouraging people to take on the changes needed to succeed in this tough marketplace.”
05 September, 2016
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