global forces
Global&forces&and&the&Western&European& brewing&industry& By#Mike#Blee#and#Richard#Whittington#
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This#case#is#centred#on#the#European#brewing#industry#in#Western#Europe#and#examines#how#the#increasingly# competitive# pressure# of# operating# within# global# markets# is# causing# consolidation# through# acquisitions,# alliances#and#closures#within#the#industry.#This#has#resulted#in#the#growth#of#the#brewers’#reliance#upon#sperC brands.#
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In!the!early!years!of!the!21st!century,!European!brewers!faced!a!surprising!paradox.!The!
traditional! centre! of! the! beer! industry! worldwide! and! home! to! the! world’s! largest! brewing! companies,! Europe,! was! turning! off! beer.! Beer! consmption! was! falling! in! the! largest! markets! of! Germany! and! the! United! kingdom,! while! burgeoning! in! emerging! markets!around!the!world.!In!2008,!Europe’s!largest!market,!Germany!ranked!only!5th! in!the!world,!behind!China,!the!UnitedGStates,!Brazil!and!Russia.!China!with!12%!annual! growth!between!2003!and!2008,!had!become!the!largest!single!market!by!volume,!alone! accounting!for!23%!of!world!consumption!(Euromonitor,!2010).!
!!!!Table! 1! details! the! overall! decline! of! European! beer! comnsmption.! Decline! in! traditional!key!markets!is!due!to!several!!factors.!Governments!are!campaigning!strongly! against!drunken!driving,!affecting!the!propensity!to!drink!beer!in!restaurants,!pubs!and! bars.! There! is! increasing! awareness! of! the! effects! of! alcohol! on! health! and! fitness.!
Particularly! in! the! United! Kingdom,! there! is! growing! hostility! to! soGcalled! ‘blinge! drinking’,! excessive! alcohol! consumption! in! pubs! and! clubs.! Wines! have! also! become! increasingly! popular! in! Northern! European! markets.! However,! beer! consumption! per! capita!varies!widely!between!countries,!being!four!times!higher!in!Germant!han!in!Italy! for!example.!Some!traditionally!low!consumption!European!markets!have!been!showing!
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This#case#is#centred#on#the#European#brewing#industry#in#Western#Europe#and#examines#how#the#increasingly# competitive# pressure# of# operating# within# global# markets# is# causing# consolidation# through# acquisitions,# alliances#and#closures#within#the#industry.#This#has#resulted#in#the#growth#of#the#brewers’#reliance#upon#sperC brands.#
#
In!the!early!years!of!the!21st!century,!European!brewers!faced!a!surprising!paradox.!The!
traditional! centre! of! the! beer! industry! worldwide! and! home! to! the! world’s! largest! brewing! companies,! Europe,! was! turning! off! beer.! Beer! consmption! was! falling! in! the! largest! markets! of! Germany! and! the! United! kingdom,! while! burgeoning! in! emerging! markets!around!the!world.!In!2008,!Europe’s!largest!market,!Germany!ranked!only!5th! in!the!world,!behind!China,!the!UnitedGStates,!Brazil!and!Russia.!China!with!12%!annual! growth!between!2003!and!2008,!had!become!the!largest!single!market!by!volume,!alone! accounting!for!23%!of!world!consumption!(Euromonitor,!2010).!
!!!!Table! 1! details! the! overall! decline! of! European! beer! comnsmption.! Decline! in! traditional!key!markets!is!due!to!several!!factors.!Governments!are!campaigning!strongly! against!drunken!driving,!affecting!the!propensity!to!drink!beer!in!restaurants,!pubs!and! bars.! There! is! increasing! awareness! of! the! effects! of! alcohol! on! health! and! fitness.!
Particularly! in! the! United! Kingdom,! there! is! growing! hostility! to! soGcalled! ‘blinge! drinking’,! excessive! alcohol! consumption! in! pubs! and! clubs.! Wines! have! also! become! increasingly! popular! in! Northern! European! markets.! However,! beer! consumption! per! capita!varies!widely!between!countries,!being!four!times!higher!in!Germant!han!in!Italy! for!example.!Some!traditionally!low!consumption!European!markets!have!been!showing!