Published 7th July 2024
Updated 7th October 2024
It comes as no surprise that Marston’s has announced this week that it has sold its remaining stake in the Carlsberg Marston's Brewing Company. It will now operate just as a pub chain, leaving Carlsberg as the largest cask ale brewer in the United Kingdom.
Now, I've been a member of the Wolverhampton branch of Campaign for Real Ale since 1988, and all the time that I've been aware of Banks's, they often seemed to put themselves in financially dangerous situations. Buying a successful brewery with a good range of beers, which is feeding its established pubs, is something that Wolverhampton and Dudley did a lot; sometimes stretching their own finances which were propped up by pub sales, selling brewery land, and taking out bank loans.
Banks’s Brewery itself was established in Wolverhampton in 1875, with Wolverhampton and Dudley Breweries Limited being registered in May 1890, to amalgamate Banks’s, C.C. Smith also based in Wolverhampton, and George Thompson and Sons based in Dudley. Since then, the company has absorbed over a dozen breweries including Hansons in Dudley in 1943, whose brewery they then closed in 1992 and Marston's in 1999.
Wolverhampton & Dudley continued to stretch their finances by making further takeovers including Jennings in 2005, Ringwood in 2007, and Wychwood (the brewers of Hobgoblin) in 2008 and more. They fended off several takeover bids themselves. The company changed its name to Marston’s in 2007, which sadly saw many Banks’s pubs in Wolverhampton being rebranded.
Since the Brexit vote, the drop in the value of the pound has seen several foreign takeovers, including large London brewer Fullers, which was taken over by Japanese brewer Asahi.
The pandemic closed pubs for months, leaving brewers with increasing debts and little income. Without the restrictions on energy prices that domestic users saw, many breweries closed and others were unable to repay loans. Marston's sold 60% of its brewing operation to Carlsberg, forming the Carlsberg Marston Brewing Company in 2020, based in Wolverhampton.
In 2021, Marston's had debts of over £1,200 million, which had reduced only to £1,100 million by December 2023. This week, Chief Executive Officer Justin Platt said that selling the remainder of the brewing operation now frees the company to focus entirely on its pub operating, and reduces their debt by £20 million.
CMBC will continue to brew beer for the Marston's pubs. Carlsberg has also agreed this week to pay £3.3 billion to take over the Britvic company. Carlsberg now owns three large brewery sites: their original site in Northampton, Marston’s Brewery in Burton-upon-Trent, and Banks's brewery in Wolverhampton. Time will tell if any of the sites will merge, but for now, let's hope the smell of hops continues to drift across Chapel Ash here in Wolverhampton.
8th October Update: brewing to cease at Banks's Brewery
Carlsberg Marston's has announced its intention to close the brewery. Their press release reads:
Carlsberg Marston’s Brewing Company (CMBC) has announced its proposal to close Banks’s Brewery in Wolverhampton in Autumn 2025, as part of a restructuring of its brewery network.
The proposed restructuring comes in response to the decision by Mahou San Miguel not to renew its long-term exclusive licence partnership from 2025 and the decline of cask ale volumes over several years. CMBC will be supporting colleagues across its wider network impacted by these proposals, including the 97 employed at Banks’s Brewery, and will be working with trade union and colleague representatives throughout the consultation process.
As part of the network restructuring, CMBC will increase investment in its breweries in Northampton and Burton, with a long-term ambition to establish Marston’s Brewery in Burton as a national centre for craft beer and traditional ale brewing in the UK.
CMBC will be investing more than £6m in significant new projects at its brewery in Burton, including the refurbishment of its cask ale line to brew traditional British ales, as well developing the brewery’s capabilities for brewing innovative, contemporary craft ales.
In addition, as part of CMBC’s long-term logistics strategy, the business will be investing significantly in a new logistics depot in the Black Country region, to support its nationwide secondary logistics network.
Paul Davies, CEO of CMBC, said: “This has been an extremely difficult decision, however it has been necessary to restructure our business to maintain our competitiveness in a challenging UK beer market.
“The hard reality is that, because of the current climate for ale and Mahou San Miguel’s decision not to renew its exclusive production and distribution agreement with CMBC from the start of next year, we will have significant excess capacity across our brewery network which we have to address.
"The team at Banks’s has been unwavering in its dedication and commitment to the brewery. We will ensure that we support all our people closely throughout this extremely challenging period.
“While the proposed closure of our Wolverhampton brewery is very regrettable, with the significant investments we are making in our Northampton and Burton breweries, our strong portfolio of brands and industry-leading logistics network, CMBC will continue to deliver for our customers and focus on long-term growth.”
References:
http://breweryhistory.com/wiki/index.php?title=Wolverhampton_%26_Dudley:_Acquisition_History
Marston's Press Release announcing the full sale of its brewing operation.
Marston's press release quoted above, announcing the closure of Banks's Brewery.
