Asahi to acquire Fuller’s beer business for £250m

Fuller’s, which was founded in London in 1845, produces premium brands such as London Pride ale, lager Frontier, and cider Cornish Orchards. The business being sold to Asahi Europe Ltd for £250m ($328m) consists of Fuller’s beer, cider and soft drinks brewing and production, wine wholesaling and distribution. 

Asahi has been strengthening its presence in Western, Central and Eastern Europe, particularly with the acquisitions of former SABMiller brands Peroni, Grolsch​​ and Pilsner Urquell​​ in recent years.

“Through the acquisition of these businesses and brands, we aim to establish a unique position as a global player that will grow based on renowned premium brands, in addition to Super Dry, Peroni, and Pilsner Urquell”,​ says Asahi.  

Fuller’s main production facility is the Griffin Brewery in Chiswick London, which has been brewing since 1654, and where brewing will continue under Asahi. 

Fuller’s: focus on pubs and hotels​

Fuller’s says it will turn its focus onto its pubs and hotels, which is the core of its business and responsible for 87% of Fuller’s operating profits. 

The sale of its beer business will give it ‘significant capital’ to invest in its pubs and hotels.

Fuller’s and Asahi Europe Ltd will also form a strategic alliance, with Asahi acting as a key supplier to Fuller’s pubs and hotels. 

“The beer business has been an important part of the Fuller’s history and brand identity, and its premium beers and ciders are a key part of what differentiates Fuller’s from its competitors,”​ says Fuller’s in a statement. 

“However, the core of Fuller’s today, and the driver of future growth, is the Fuller’s pubs and hotels business.  ​

“Given the existing relationship between the parties, with Asahi being a current key supplier to Fuller’s pubs and hotels business, and Asahi’s focus on brewing quality and brand building, Asahi was considered the ideal owner of the Beer Business and a valuable partner for Fuller’s. ​

“The Board believes that Asahi will foster an environment in which the Beer Business can flourish, both in the UK and internationally.”​

Constraints for mid-sized beer businesses​

Fuller's continues: “Recent structural changes to the beer industry, which have resulted in material economies of scale benefiting global brewers and a progressive beer duty spawning small brewers (resulting in over 2,000 breweries in the UK), have been challenging for the mid-sized Beer Business to navigate while maintaining the commitment made to customers to brew exceptional, award-winning beer at Fuller’s historic Chiswick home,”​ it says. 

In response to the challenges, it points to the acquisitions it has made such as premium cider and soft drinks maker Cornish Orchards, craft cask brewer Dark Star Brewing and boutique drinks wholesaler Nectar Imports. The beer business has also developed new products such as Frontier Premium London Lager to drive volumes. 

But Fuller’s concludes that, with limited financial resources compared to global brewers, the company's 'ability to add further value and drive organic growth in the Beer Business and its brands is constrained'.