Beer Industry & Swot Analysis

Strengths – W&DB’s strength lie on being an independent brewing and pub retailing business. Aside from brewing, the company also operate to around 1630 pubs – a mixture of both tenancies and managed pubs. They have a selection of the venues are modern bars of the Pitcher and Piano brand. Weaknesses – UK beer turnover was up 0. 2% over fiscal 2002. Profits were down 0. 8% due to cost pressures following the supply chain changes. The company also faced a significant loss of share within the on-trade segment.

These market share losses can be attributed to organizational issues (supply chain problems in the UK). Also, the accounting policy requires W&DB to value our property assets every five years. This year, 75% of their pubs fell into this category and were independently re-valued. The resulting uplift of ? 169. 5m has been adopted in the balance sheet, and represents an average uplift of 25% on pub values since these pubs were last re-valued in 1999. Next year, the remaining 25% will be re-valued in line with our accounting policy.

Opportunities – As W&BD had experienced pressure from regulation which will have an impact on the way they do business, whether to do with health, drinking behavior or smoking, regulation places clear responsibilities to their business. For this, the recent industry Responsible Drinks Retailing Awards, The Union Pub Company won the national award for ‘Most Responsible Pub Company’. The company also has enormous opportunities of expanding in other European markets or globally because of their unique products.

In December 2003, W&DB joined the steering group of the Beer Academy. This was a new initiative to educate people linked with the drinks industry in beer and to create more interest in beer. The initiative was backed by a large group of top industry names. This effort would greatly enhance their business goals. Also, in June 2004, W&DB announced that it had acquired Wizard Inns Limited. This was followed by the acquisition in January 2005, of the Cheshire-based brewery, Butronwood.

These additional acquisitions could attract more profits for the company. Threats – W&DB’s below par performance is a threat because to think that they had began brewing beer in Wolverhampton in 1875. Newer companies had overtook the growth and expansion of their company. Also, the company decided to put itself up for sale in 2000, and attracted a number of bids. However, it fought off a hostile bid from Pubmaster, a venture capital backed pub chain, in August 2001, and by 2002 the company’s share prices had increased again.

This phenomenon could happen again in the future, thus the company should weigh things out in merging because a bigger company might help them to improve and expand globally. You may also be interested in PESTEL Analysis beer industry

REFERENCES

Advertising Standards Authority. 2003. The British Code of Advertising, Sales Promotion and Direct Marketing. London: Committee of Advertising Practice. Bamforth, C. 2003. Beer: Tap into the Art and Science of Brewing. New York: Oxford University Press. Beer Marketer’s Insights. 1990, October 11. p. 3. Center on Alcohol Marketing and Youth. 2004.

Alcohol Advertising on Television, 2001 to 2003: More of the Same. Washington, DC: Center on Alcohol Marketing and Youth. Crompton, G. 1998. Introduction. In The Dynamics of the International Brewing Industry since 1800, Wilson, R. G. & Gourvish, T. R. (Eds. ) (pp. 1-12). New York: Routledge. Datamonitor. 2005, 18 June. The Wolverhampton & Dudley Breweries, Plc: Company Profile. UK: Marketline Business Information Centre. Datamonitor. 2005, October. Beer in the United Kingdom: Industry Profile. UK: Marketline Business Information Centre.