'Breweries will close' as cask volumes drop
by Graham Ridout
Analyst AC Nielsen has painted one of the gloomiest pictures ever about the state of the cask-ale market.
Its report on cask volumes for the year to December 2004 rubbished suggestions that the market was worth about five million barrels a year. The report said UK cask-ale volumes 'are not five million, nor four million, nor three million, but nearer 2.777 million barrels.
It said if estimates from HM Revenue & Customs and microbrewers' sales were excluded, the figure would be closer to 2.327 million barrels in 2004, 5.7% down on 2003.
The report's author, Graham Page, said: 'Cask ale, as this review clearly demonstrates with hard, indisputable statistics from reliable sources, is not growing overall, but declining still.
But he added: 'The level of decline has slowed and clearly some cask-ale brewers are doing very well. Many micros, boosted by sliding-scale duty, now in-creased further, are doing well, as are some regional brewers.
The report also underlined the dwindling power of the national brands. The combined volumes of regional brewers and small micros now account for just over 50% of the market.
Page suggested the rising popularity of regional and smaller brewers might help to arrest the decline in sales. It could even lead to growth in the sector for the first time in more than a quarter of a century, he said.
The market for cask ale remains strongest in the south of England especially London, Wales, the West Country and central England. However, the market for premium ale in London fell 15% nearly 2.5 times the national average.
AC Nielsen believed the continual churn of pubs in the capital had affected sales and distribution, as well as people converting to standard-strength ales.
Page said the challenge facing cask-ale producers was winning new consumers from lager drinkers. 'There will be con-tinuing consolidation in the industry, warned Page. 'More breweries will close and more pubs will change owners. More pubs will also close.
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Winners and losers
Draught Bass in decline
Marston's Pedigree in growth, neck and neck with Bass as leading brand
Greene King Abbot fell back
Greene King Old Speckled Hen growing strongly
Courage Directors strong in the south, but declining
Wadworth 6X picking up after a decline in sales
Charles Wells Bombardier growing rapidly
Adnams Broadside growing rapidly
Shepherd Neame Spitfire growing rapidly
Timothy Taylor Landlord growing as a result of Madonna's endorsement
Fuller's London Pride growing and one to watch
Young's Bitter growing and another one to watch
Thwaites a sleeping giant now gearing up for growth
