Executive Summary

The beer market was worth £15.35bn in 1996. Growth in consumer spending remains in line with the broader economy in this very mature, saturated market.

Beer's share of all alcoholic drinks spending is also fairly stable. Despite public perceptions, per capita consumption of beer in the UK is average by international standards. The UK's five largest brewers, although dominant domestically, with 93% of the market, are relatively small on the international stage.

Brewers have traditionally measured their market in volume terms (by barrelage), but changes in distribution and consumer tastes are shifting the emphasis to value and profitability. Public houses continue to be the main outlets for beer, but these outlets are shifting towards meals, and independent public house companies are offering a wider choice of draught beers, free of traditional ties to brewers. Supermarkets are increasingly important and stock similarly wide ranges of packaged beers.

Innovation has kept pace with consumer experimentation in this traditional industry. The 1990s have brought widget or `draught-in-a-can' beers, ice beer and nitrogenated keg beers, of which Caffrey's Irish Ale, from Bass, is the outstanding introduction of recent times.

General prospects for brewers and the beer market are reasonable, with even the smaller regional brewers adapting to new public house trends, take-home growth, and even discovering export potential for their ales. A question mark hangs over the immediate future structure of the industry, with the Government's decision on an agreed merger of the breweries owned by Bass, Carlsberg and Allied Domecq having been delayed until after the General Election.

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