FT.com / Companies / Food & Beverage - Adnams faces fresh criticism from GPG.
It's not often I blog on individual companies but this is different. This is an attack on the best brewer in the world (have you tried their beer - and have you tried it at the Lord Nelson in Southwold?):
Adnams, the Suffolk-based brewer and pub operator, was forced on to the defensive on Monday following fresh criticism from Guinness Peat Group, the activist investor and rebel shareholder.
GPG, which holds 5.4 per cent of Adnams’ B-shares and 2.5 per cent of the voting rights, has been pushing for changes to the group’s corporate strategy and an end to the dual share structure.
Adnams has drawn sharp criticism from GPG over its trading performance over the past year. GPG has questioned the rationale behind the millions that the brewer has invested to modernise its production facilities.
It has also queried Adnams’ move into wine retailing, saying that the brewer should concentrate instead on building its beer and pub business in its East Anglia heartland.
I would no more trust GPG with Adnams than I would UBS with my tax return.
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In my experience (largely gained from Campaign for Real Ale newsletters), local and regional brewers listing on the Stock Exchange is a recipe for takeover by Greene King somewhere down the line! It’s happened to dozens of them.
I would say Adnams has a lot of competition in Suffolk Brewing – Nethergate, Mauldons and St Peters are all excellent (the Jerusalem Tavern in Farringdon, which is run by St Peters, may be the best pub in London!) OK, none of those produce anything like the same volume of beer as Adnams but they ain’t takeover targets either… in brewing, I’d say ‘small is beautiful’.
Howard
Norfolk also has some very good local beers
Greene King is not a good East Anglian beer
And I maintain – Adnams bitter is great – but even better in Southwold
No analyst will get that
Richard
Food and drink is very interesting and a prime example of where capitalism fails. Any lover of food and drink values the local above the regional, the regional above the national and the national above the international. In other words, the enthusiast looks for the rich, the complex and distinctive, whereas the mass market prefers the bland and uniform. Very few products manage to be global brands (as opposed to generics like Parma ham) of distinction (certain single malts would be the only example I can think of).
The real solution is for brewers to remain local, serving their local community and providing a decent income (and a great quality of life) for the family or friends that own and staff the business. But evntually a clever, ambitious child comes along. Or the family wants to retire and sell out. Or someone sees that the business isn’t “fulfilling its potential” and makes a takeover bid.
But gradually the business grows, then it gets floated on the stock market. It makes “innovations”. And what made the original business great gradually gets lost.
I think what is really needed is an appreciation that running a small, profitable business that produces something with historic resonance, that the local community wants and is of high quality is one of the greatest achievements possible. It is an end in itself. It is not the first step on the path to building a global empire. Being comfortably well-off is enough.
I don’t know much about Admans, but when I hear it is a quoted company spending millions “modernising” its production facilities the alarm bells immediately start ringing. I wish it luck though – the more independent brewers, the better.
Sorry, misspelled Adnams. Could do with some decent brewers offshore.