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British pubs bank on Games to reverse fortunes

June 17, 2012

The beer industry claims it is being suffocated by taxes and competition from supermarkets, which offer attractive promotional offers on beer.

By Julien Mivielle

LONDON: British pubs and brewers are preparing for a bumper summer supplying pints for visitors to the London Olympics, desperately hoping the extra business will prove a pick-me-up for the ailing industry.

Yet some analysts caution that it will give a short-lived three-week boost without any lasting effect.

London-based SABMiller, the world’s second-largest brewer, told AFP it expects the Games to boost sales, while Dutch giant Heineken is one of the Olympics’ official sponsors.

That makes Heineken well-placed to take advantage of the influx of tourists — it will be the only brand on sale at Games venues.

“There are no bigger, global or more spectacular events than the Olympic Games and Paralympic Games,” said Stefan Orlowski, managing director of Heineken UK.

Eyebrows have been raised at the £4.20 price of a 33-centilitre bottle at the venues.

However, all 50,000 pubs in the country stand to benefit from the event, with punters drawn to watch the action on big TV screens on their premises.

“Pubs remain a quintessential part of British culture, so we anticipate the Olympics will directly benefit local pubs with a significant increase in tourist trade,” said Jon Howard, spokesman for CAMRA, a group which campaigns for traditional beer.

This will provide a welcome boost for a sector which is undergoing a serious crisis — a dozen pubs are closing every week in Britain.

The beer industry claims it is being suffocated by taxes and competition from supermarkets, which offer attractive promotional offers on beer.

Consumers, hit by austerity, unemployment and recession have cut down on their drinking at pubs as disposable income becomes scarce.

Miserable hangover

One analyst warned that when the excitement of the Games wears off, Britain’s beer industry is likely to be left with a miserable hangover as it returns to the losses which have dominated balance sheets for the last decade.

“There will be a small impact, I don’t deny that, but it’s a very minor impact and it’s not going to reverse the long-running trend,” warned Spiros Malandrakis, from the Euromonitor consultancy.

The 2004 Athens Olympics and the 2010 football World Cup in South Africa both brought about a boost in consumption for the host countries, but sales quickly returned to normal.

“Macroeconomic problems prove to be much more important than a three-week sporting event,” said Malandrakis.

The industry suffered a harrowing 2011, with a five percent decline in the volume of beer sold across the country.

This year it should fare a little better, with the decline limited to two or three percent, according to Euromonitor.

- AFP


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