Greene King’s shock decision to sell its Old Speckled Hen brands to the Spanish lager brewer Damm has shone a light on the rapacious profiteering of giant supermarkets.
Old Speckled Hen is one of Greene King’s major brands but the income from sales to the off-trade is tiny as a result of the deep discounts demanded by the retailers.
As the football World Cup gets under way this month, we will all be confronted in supermarkets by what are known as “slabs” – boxes of 12 beers for around £12 – sold as cheaply as bottled water.
The beers are brewed by the giant global brewers that account for 80 per cent of all the beer produced and sold in this country. They can afford the discounts as a result of the volumes they sell through supermarkets.
Some years ago, when Bass was still involved in brewing and owned Carling, a senior executive confided in me that the profit on a can of the lager was just two pence.
This is the economics of the mad house – except at the time Bass was producing two million barrels of Carling and the pennies stacked up.
The lager is now owned and brewed by the Canadian/American giant Molson Coors.
Greene King is a big company but it’s not in that league. It has invested £40m in a new brewery in Suffolk that will concentrate on cask and craft beers, and its brewing and retailing strategy has changed as a result.
A spokesman told me: “We’re moving to our new brewery in 2027 and we’re streamlining our brewing operations to focus on beers for our pubs and the wider on-trade.
“We’re stepping away from supplying bottles and cans to supermarkets and have agreed the sale of the Old Speckled Hen family to Damm UK.”
Damm, best known for Estrella Damm, owns the former Charles Wells’s Eagle brewery in Bedford. It’s not new to the game. The brewery was founded by a German family in Barcelona 150 years ago and is now one of the leading Spanish breweries.
It has been brewing in Bedford for four years and has clearly taken a long, hard look at the way the British market operates. The Spaniards must be confident they can make a living from the off-trade without being taken to the cleaners by the supermarkets.
All I can say is “buena suerte con eso” – good luck with that.
Greene King owns a massive estate of 2,600 pubs, restaurants and hotels. It supplies those outlets with draught and packaged beers with no middle men creaming off the profits.
Its two main cask brands, IPA and Abbot, are popular in its pubs and also, as the spokesman said, in the wider on-trade, meaning free-trade pubs or those owned by other brewers or pub companies that allow their tenants to sell guest beers.
And as part of the deal with the Spanish brewer, Greene King will continue to sell Old Speckled Hen in its own outlets. You could say it’s a case of Dammed if you do or Dammed if you don’t.
One bottled beer, Strong Suffolk Ale, will stay in Suffolk. The 6 per cent beer is of historic importance and needs to be loved and promoted by its owners.
Strong Suffolk is a now rare example of what was called in the 18th century “country beer”. It’s a style that depends on slow maturation in oak casks and is then blended with young, fresh beer. It’s similar to the sour red beers of West Flanders in Belgium.
In the case of Strong Suffolk, a 12 per cent beer known as 5X is stored in oak casks for many months and is then blended with a fresh, young beer, BPA (5 per cent), standing for Best Pale Ale.
As a result of the wood ageing, the finished beer has a hint of lactic sourness, balanced by oak, spices and a sherry-like fruitiness.
The beer used to be brewed on a regular basis but in recent years it has been reduced to small and occasional batches. The beer is not bottle conditioned with live yeast and my frequent requests for Greene King to allow the beer to mature naturally without filtration or pasteurisation have fallen on deaf ears.
When the new brewery opens in 2027, surely that would be the time to produce a draught version of Strong Suffolk and have it standing proud on bars alongside IPA and Abbot Ale.
