UK: S&N going sweet to offset continuing decline in beer market

Scottish & Newcastle, the UK's biggest brewer, is considering moving into soft drinks as it expands its range of drinks to make up for a declining beer market, The Financial Times published December 28.

The brewer, which owns the Foster's and Kronenbourg brands and commands 28 per cent of the UK beer market, is also among those that believe there is a growing market for low alcohol and non-alcoholic drinks. "Our reason for being is not wedded to the hop," says John Dunsmore, S&N's managing director for the UK. "We would not rule out non-alcoholic development."

The brewer does not own any soft drink brands in the UK but distributes other companies' soft drinks to pubs and hotels through Waverley TBS, its wholesale business.

S&N already produces non-alcoholic beer in Russia, France and Portugal, with Russia being the biggest market. Although beer still accounts for more than 40 per cent of alcohol drunk in the UK, total consumption - defined as beer drunk in pubs and sold through supermarkets - has been declining markedly.

S&N warned in November that the UK beer market was suffering from a "depressed consumer environment" with sales volumes falling 6.7 per cent in the third quarter.

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