Consolidation could be the future of the pub trade

By Nikkie Thatcher

- Last updated on GMT

Buying power: Tom Stainer says big companies are in the process of acquiring smaller ones
Buying power: Tom Stainer says big companies are in the process of acquiring smaller ones
The pub trade is likely to see more consolidation with pub companies and breweries buying smaller businesses, Campaign for Real Ale (CAMRA) chief executive Tom Stainer told The Morning Advertiser.

This follows the news about Stonegate Pub Company agreeing to buy Ei Group for £1.27bn, meaning the operator’s estate will increase by 4,000 sites, which was announced last month (July).

Stainer said: “You always see these cycles of expansion and contraction where you suddenly get an explosion of smaller operators and it seems natural the bigger operators will respond to that by making acquisitions.

“We have seen a trend recently of big, national or even international brewers starting to buy up smaller breweries, maybe that comes with established craft credentials as a response to the development of the beer market.”

Strategic play

He added: “In all businesses, you see this with the big guys who have the buying power, it is part of their strategy.

“We may see pub companies eyeing up the Stonegate and Ei Group deal, saying ‘we need to compete with that, we need to be of a similar size otherwise we are going to start to lose out’.”

Stainer, who was appointed chief executive of CAMRA in January, also outlined some of the major issues operators are currently facing.

Trade challenges

He said: “Changing consumer habits and behaviour is a given and everyone is talking about that. Potentially, consumers have less money to spend so they are more careful about how they are spending their disposable income on other leisure activities.

“This means the pub industry has to be much more agile and much cleverer in what they are offering to ensure they are appealing to everyone in society.

“The industry has thankfully, been talking properly for several years now about diversity and inclusivity.

“Pubs need to ensure they are getting that right because they can’t afford to be turning away about 51/52% of potential customers (male/female divide) by not offering things that appeal to them.”

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