Belhaven's £70m Interbrew deal
SCOTTISH brewer Belhaven has signed a £70m lager supply deal with Belgian beer giant Interbrew, the groups said today. East Lothian-based Belhaven has signed the five-year deal with Glasgow-based Tennent Caledonian Breweries, a subsidiary of Interbrew, which will see it supply Stella Artois as well as Tennent's Lager to its pubs under one agreement.
The deal continues a supply arrangement between Belhaven and Tennent Caledonia dating back to 1979, under which Belhaven sourced its lager from the firm leaving it to focus on brewing ale such as its Belhaven Best brand.
However, Interbrew bought Tennent Caledonian two years ago as part of its acquisition of the Bass brewing operations, and the new deal means Belhaven can source Interbrew's Stella brand as well as Tennent's under the same arrangement.
Stuart Ross, chief executive, said Belhaven used to buy the Stella brand from Whitbread. Whitbread's brewing arm, which sold the lager under licence from Interbrew, was bought by the Belgian giant prior to its acquisition of Bass brewing.
Ross said the continuation of the contract was an 'important milestone' for Belhaven. 'The combination of Tennent's, Scotland's leading mainstream lager and Stella, the UK's most popular premium lager, was irresistible,' he added. Under the deal, Belhaven will supply the lager to its 160 pubs.
Belhaven also said it was investing more than £1.5m in a new bottling plant at its brewery in Dunbar, East Lothian, to 'increase efficiency and enhance product quality'. However, Ross said there would not be any direct increase in jobs.
The investment came as Belhaven said it had seen its sixth consecutive year of 'record' sales and profits since flotation. Pre-tax profits for the year to 31 March rose 23% to £9.2m while turnover was 25% ahead at £69m, boosted by the acquisition of 15 pubs from Alloa-based Maclay last year.
Belhaven said the contribution from the Maclay pubs had exceeded expectations. Ross has further growth plans following the Maclay deal, and is aiming to double the group's 160-strong estate in three-to-four years.
Shares in the group rose 5% following the announcement, up 16 1/2 p to 321p. The total dividend to shareholders is 9.2p, a 10.2% increase on last time.
