Fuller, Smith & Turner has accepted a blockbuster £250m offer for its entire drinks business from the Japanese beer group Asahi, including its flagship London Pride ale.
The company, which has three relatives of the Victorian brewing barons John Fuller, Henry Smith and John Turner on its board, said it had taken the decision to quit beer after 174 years to concentrate on running pubs and hotels.
The deal includes the Griffin brewery, its “spiritual home” in west London, on the banks of the Thames, in what is now the upmarket suburb of Chiswick.
Simon Emeny, the chief executive of Fuller’s, said: “Brewing has formed an integral part of our history and brand identity, however, the … driver of our future growth is now our premium pubs and hotels business.”
The deal also raised question marks over the future of the London Pride brewery. Beer has been flowing at the Griffin brewery since the late 1600s. But it is a slice of Britain’s brewing history that, along with other historic London sites, is also a chunk of valuable real estate hemmed in by gentrification.
“Fuller’s sale of its beer business, including the iconic Griffin brewery in Chiswick, is nothing short of astonishing,” said Paul Hickman, an analyst at investment research firm Edison.
“Management have always averred they would never sell the historic brewery, which they have described as Fuller’s ‘spiritual home’. In addition, London Pride is probably the most successful ale brand in the UK.”
A spokesman for Asahi said the Japanese group was committed to making beer at the Chiswick site, which employs 400 people. “Based on the agreement, we will continue to brew beers at the Griffin brewery in Chiswick. It is and always has been the home of London Pride.” However, some redundancies are expected as a result of the deal.
The £250m deal also includes Fuller’s other drinks operations, Cornish Orchards, Dark Star Brewing and Nectar Imports.
Other historic London breweries have not survived as property values in the cityhave soared. The Ram brewery in Wandsworth, west London, was sold off by Young’s in 2006 and is being turned into homes and shops, and the Mortlake brewery in south-west London is becoming luxury flats. Analysts speculated that the Griffin site could be worth up to £100m so could be ripe for even partial redevelopment.
Founded in 1845, Emeny became the first outsider to run Fuller’s in 2013. The clans still control roughly 50% of the shares and 75% of the voting rights, with six family members in senior positions. “It’s emotional, but the logic for doing it was compelling,” Turner told the Times on Friday. “The forces of change were just too great.”’
Mark Brumby, an analyst at the leisure specialist Langton Capital, said: “They have decided to cash in their chips. It could be that they felt they were not big enough to compete with the AB InBevs of this world, as well as some of the more esoteric craft bitters, but the obvious reason is that it is a crazy price.” The shares closed up 15.5% £10.50.
News of the sale was met with handwringing by Fuller’s drinkers on social media. Roger Protz, the editor of the Good Beer Guide, was “completely dumbfounded” by the deal. In a statement, the Campaign for Real Ale (Camra) said it was worried that the ongoing consolidation in brewing could lead to a “reduction in choice, value for money and quality for beer drinkers”.
“It’s a very sad day to see such a well-known, historic and respected name exit the brewing business,” said Camra’s chairman, Jackie Parker. “While the Fuller’s family has stressed it has sought to protect the heritage of the Griffin brewery, we’d call on the new owners to pledge to continue brewing operations at the Chiswick site.”
But while Fuller’s has remained famous for its beer, today it is the leisure division that delivers nearly 90% of its profits. Offloading its brewing, wholesaling and distribution operations will free up management to focus on its 182 pubs and more than 203 hotels.
The deal is the latest in a series that has transformed Tokyo-based Asahi into the world’s seventh largest brewer. It owns Japan’s top-selling beer, Asahi Super Dry, and in 2016 bought the Peroni, Grolsch and Meantime brands for £2bn as part of a carve-up designed to allay competition concerns around AB InBev’s takeover of SABMiller.
Fuller’s said the sale would hand shareholders a £55m-£69m windfall, with a sizeable chunk of that destined for relatives of the founders. The company will also use some of the proceeds to top up the company’s pension scheme.
