Scottish & Newcastle

Arguably one of Britain's most iconic breweries, Scottish & Newcastle's flagship brand, Newcastle Brown Ale, is referenced in TV shows such as Friends, Films and throughout popular culture. Before the purchase of the FTSE listed public company by Heineken and Carlsberg in 2008, Scottish & Newcastle dominated the UK and European beer market, with key brands including Fosters, Kronenbourg 1664, John Smiths, Strongbow Cider and Kingfisher (a lager found in most Indian restaurants).

Scottish & Newcastle plc was founded in 1749 in Edinburgh. Over the years, the company expanded out from its original headquarters, to become an internationally successful business, with the quantities it brewed growing almost tenfold. The modern Scottish & Newcastle was founded by Grizel Syme, who managed the brewery of her deceased husband. This brewery and those run by her sons became the William Younger & Co firm before merging with McEwan's in 1931 to become Scottish Brewers. The name Scottish & Newcastle was formally adopted in 1960, after the company merged with Newcastle Breweries.

The company would later be ranked fifth in the UK in terms of production, selling around 6 Mhl a year by 1985. The growth would continue over the next decade until in 1995, the company purchased their rival brewers Courage. The takeover led to the UK brewing division being known as Scottish Courage and Scottish & Newcastle becoming the UK’s leading brewer, with annual productions of around 15 Mhl. The Scottish Courage name was short lived and by February 2006 the company had reverted to S&N UK.

Brewery Acquisitions

In the years since, S&N has expanded outside of the UK through various acquisitions of companies in Western Europe. These acquisitions helped Scottish & Newcastle to grow sales to well over 50 Mhl every year. In 2002, S&N acquired Hartwall, Finland’s leading beverage business. This acquisition led to S&N becoming 50% owners of Baltic Beverages Holding, which had interests in the Baltic countries, as well as Russia, Ukraine and Kazakhstan.

In July 2003, S&N acquired the struggling Bulmers firm which then added the popular Strongbow, Scrumpy Jack and Woodpecker brands to their extensive portfolio. This acquisition also brought Scottish & Newcastle the UK’s largest cider mill and orchards that were based in Hereford. Following this acquisition and the sale of their pub and restaurant chain, Scottish & Newcastle shares rose from 26.75p to 369p, making the company much more attractive to potential acquirers.

Too Big To Ignore

S&N struggled in many parts of their business, but became a thorn in the side of the world's biggest brewers. Britain loved their core drink brands and this was a threat to the market share of Budweiser (AB InBev), Guinness (Diageo) and Heineken. Shareholders wanted an exit strategy and Heineken were happy to provide one, in their 2008 acquisition.
- Dave Saunders, guest beer writer for Crafted Beer

Heineken Takeover

In 2004, drastic cost-cutting techniques were beginning to be introduced to help S&N cut their growing cost base. During the same year, Edinburgh’s Fountain Brewery and Newcastle’s Tyne Brewery were both closed. The following year, the company’s distribution depots - based in Bow, Chelmsford and Maidstone - were closed and integrated into the Dagenham Regional Distribution Centre. The use of transit points instead of full working logistical depots proved to be a much cheaper and more efficient alternative solution.

By this time, S&N was by far the UK’s largest brewery company, producing popular brands including Newcastle Brown Ale and Foster’s. By sales volume, the company was the world’s seventh largest brewer. The Edinburgh-based company employed 3,300 staff in the UK, alongside 30,000 in Europe and more than 7,000 staff in Asia.

On 31st March 2008, Scottish & Newcastle’s shareholders approved Heineken and Carlsberg’s £7.8 billion takeover deal. The deal had been in the pipeline since October 2007, with the acquisition finally being completed on 29th April 2008. At this point, Scottish & Newcastle’s shares were delisted from the London Stock Exchange.

On 23rd November 2009, the company’s name changed to Heineken UK Limited to reflect the name of the parent company.