End of an era for British brewing.

(From Off Licence News)

Foreign brewers will account for more than 75 per cent of the British brewing industry if the takeover of Scottish & Newcastle is completed. Even if the current AGBP7.8 billion offer from Carlsberg of Denmark and Heineken of Holland is thwarted by a counter bid, the chances are that the Foster's-to-John Smith's Agiant will still end up under overseas ownership. Only international beer behemoths such as Anheuser-Busch and SABMiller would appear to have the strength to out-punch the Continental brewers - already known in the City as the "lager louts". Diageo could attempt to repel the invasion but few are banking on a wine and spirit intervention. Although S&N has let it be known that it is keeping its door wide open, there is no sign that Carlsberg and Heineken will have to contend with a rival approach. So the way appears clear for the pair to break up what is the last largely British-owned major brewer.

Carlsberg already has 12 per cent of the British market and would run into monopoly problems if it swallowed the S&N business in this country. Extending its operations here is not, however, on its agenda. Its desire is to get its hands on S&N's half share of Baltic Beverages Holdings, where it already has a 50 per cent interest. Operating in the former Soviet Union, BBH is probably the fastest-growing brewer in the world.

Heineken will take over the UK operations. As Britain's biggest brewer, S&N has at least 25 per cent of the market. Heineken's current involvement is tiny, probably less than 1 per cent. So Whitehall regulators will have little, if any, interest in the deal that will catapult the Dutch brewer into the top beer position. In one swoop it will overtake Coors, the US group in second spot, and third-placed InBev, the sprawling Belgian-based group.

Redundancies The Scottish break-up will undoubtedly lead to heavy redundancies among the administrative and clerical staff. For one thing, the resources to run an international operation will no longer be needed. And will Heineken want all the brands now in its wide portfolio? There must be a possibility that at least some ales will be sold. Already, other brewers are exploring the possibility of buying unwanted brands - Marston's has hinted it might be interested.

Certainly John Smith's, the major Scottish bitter, would be an enticing acquisition for the likes of Marston's and Greene King with their extensive distribution networks. Both have been busy buying smaller regionals in recent years and once S&N disappears will emerge as Britain's leading home-owned brewers. Heineken could also ponder the retention of the famed Newcastle Brown Ale. Dealing with the iconic beer could ...