Brewers Carlsberg UK and Marston’s announce merger

Danish brewer Carlsberg and British pubs and cask ale firm Marston’s have announced a joint venture, prompting concern among small brewers who fear being squeezed out of the market.

Shares in Marston’s surged by 36%, recovering some of the value lost since the Covid-19 lockdown shut pubs across the country, as investors applauded the tie-up.

Under the deal, the Danish firm will own 60% of the new Carlsberg Marston’s Brewing Company with Marston’s holding 40% and receiving a cash payment of up to £273m.

The new business will offer a mix of Carlsberg’s mass-market lagers and Marston’s cask ale brands such as Hobgoblin and Pedigree, and will also be able to feed Carlsberg beers into Marston’s estate of around 1,400 UK pubs.

The Society of Independent Brewers (SIBA), the trade body representing small breweries, warned the deal could make it harder for independent beer firms to get their beers into pubs.

“This merger is the latest in a series of consolidating measures within the UK beer market,” said SIBA chief executive James Calder.

“It has the potential to take the Marston’s brand global and brings Carlsberg back into the distribution and porterage business only after a few short years of leaving it. This merger yet again has the potential to impact negatively on small independent brewers by further reducing the access to market they receive.”

Despite the growth of craft beer in the UK over the past decade, small breweries have struggled in the face of a fightback from global brewing giants, some of which have sought to cash in on changing tastes by buying out smaller operators.

These include Carlsberg’s own takeover of London Fields, as well as Heineken’s investment in Beavertown, and the deal that triggered a wave of buyouts – Budweiser owner AB InBev’s deal for Camden Town Brewery.

Carlsberg’s group chief executive Cees ‘t Hart said the deal would bring customers “wider choice, greater capacity, product innovation and marketing and distribution efficiency benefits”.

The chief executive of Marston’s, Ralph Findlay, said: “This new partnership acknowledges Marston’s strategy, position and consistent outperformance against the UK beer market, realising value for shareholders today, whilst retaining an interest in the future upside of the combined entity.”

Analysts at stockbroker Jefferies described the joint venture as “attractive”, pointing to benefits including one-off synergies of £32m and annual savings of £24m by the end of the venture’s third year.

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Billionaire Boparan buys Carluccio’s brand and saves 800 jobs

The billionaire Ranjit Singh Boparan has bought the Carluccio’s brand and 31 restaurants in a deal that rescues more than 800 jobs.

About 40 further outlets of the ailing chain, which called in administrators in March, will be permanently shut, with the loss of 1,000 jobs. All the Carluccio’s outlets are currently closed and its staff are on furlough.

Boparan, 53, has made his fortune in the food business and owns the Giraffe and Ed’s Easy Diner chains as well as Fox’s Biscuits and a vast supermarket chicken empire.

More than 30,000 pubs and restaurants ‘may not reopen after lockdown’

Phil Reynolds, a joint administrator of Carluccio’s and a partner at the corporate restructuring firm FRP, said: “The Covid-19 lockdown has put incredible pressure on businesses across the leisure sector, so it has been important to work as quickly and as decisively as possible in an extremely challenging business environment to secure a sale, which ensures the future of the Carluccio’s brand in the UK casual dining scene.”

The buyout of Carluccio’s marks the latest expansion of Boparan’s empire. He has been labelled the “chicken king” as he is the co-owner and founder of 2 Sisters Food Group, which supplies about a third of the chicken on UK supermarket shelves. The company, which also owns Fox’s Biscuits, was the subject of parliamentary and food watchdog inquiries in 2017 after a Guardian and ITV News undercover investigation into food standards at a 2 Sisters chicken plant.

Boparan’s interests also include the turkey producer Bernard Matthews and the upmarket Cinnamon Club restaurant in London, as well as Boparan Restaurants group, which operates 140 outlets across six chains.

Satnam Leihal, the managing director of Boparan Restaurant Group, said: “This acquisition is in line with our strategy to grow our restaurant group with quality brands. While it is an extremely challenging time for the sector, we believe quality hospitality businesses will recover in the long term as people return to eating out.”

Boparan is extending his empire as restaurants and pubs face intense financial pressure during the coronavirus crisis. UK operators have been closed since the end of March and will not be allowed to open to diners until at least 4 July, when the third step in the government’s lockdown easing plan is due to take place, if progress in tackling the virus allows. Even then, businesses are expected to have to operate with strict physical-distancing rules, which are likely to dramatically affect profits.

Carluccio’s was founded by the late chef Antonio Carluccio in 1999 and was owned by Landmark Group, a Dubai-based retail and hospitality conglomerate.

Restaurants that have been rescued

Beverley
Bluewater
Bristol, Cribbs Causeway
Cambridge
Cheshire Oaks
Chester
Chichester
Colchester
Derby
Kingston, Bentalls
Leamington Spa
Leeds, Trinity
London, Islington Development Kitchen
London, Marriott Heathrow
London, Marriott Regents Park
London, Richmond
London, South Kensington
London, St Christopher’s Place
London, St Pancras Station
London, Waterloo Station
London, Wimbledon
Manchester, Trafford Centre
Manchester, Piccadilly
Portsmouth
Reading
Sheffield
Solihull
Southampton
Stratford-upon-Avon
Walton-on-Thames
Dublin Dawson Street

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Quarantine measures may lead to shortage of fruit pickers in Britain

Quarantine restrictions aimed at preventing overseas visitors bringing in new cases of Covid-19 and the government’s controversial immigration bill could lead to shortages of workers to harvest fields and pick fruit, representatives of the UK’s food producers have warned.

Industry leaders called for ministers to think carefully before bringing in rules that would make it harder for seasonal and migrant workers to get into the UK to work in fields, farms and food processing plants.

Seven things city leaders can do to drive a green, fair recovery from Covid-19

  • Remove through motor traffic from residential streets and extend pavements near shops, schools and parks to make walking safe and enjoyable for transport and exercise.
  • Introduce safe access routes on foot, bike and scooter from homes to parks and green spaces and introduce automatic pedestrian lights at crossings so people do not have to push buttons and risk infection.
  • Establish safe cycle routes to and from work for key workers, especially hospital staff, by closing roads and carriageways where necessary so people have a safe alternative to private cars and public transport.
  • Create safe walking and cycling routes to and from schools, and close down streets around schools to motor vehicles at drop-off and pickup times.
  • Use libraries, schools and sports stadiums to distribute nutritious, sustainably produced food to communities that need it most, and scale up food waste collection and treatment, including distributing household composting kits and guidance.
  • Retrofit all public buildings, many of which are empty now, drastically improving energy efficiency and creating thousands of green jobs.
  • Work with other cities to invest the billions tied up in city funds and pensions in climate solutions to drive green job creation and create a more resilient and sustainable economy.

They made their remarks moments before the environment secretary, George Eustice, called for British people to apply for jobs that would normally be done by foreign workers.

He acknowledged that only about a third of workers from countries including Romania and Bulgaria, who would normally come to the UK were here already and only “small numbers”, would continue to travel.

“One thing is clear and that is that this year we will need to rely on British workers to lend a hand to help bring that harvest home,” he told the daily Downing Street press conference.

Embarrassingly, as Eustice made his appeal, the Pick For Britain website set up by the government in conjunction with farming and agriculture bodies was down. Earlier in the day, Prince Charles had called for a second world war-style army of workers to come forward to stop crops going to waste.

The challenges Covid-19 has presented food producers were the focus of a hearing of the environment, food and rural affairs select committee.

Industry leaders also explained that shops and supermarkets ran out of food because the algorithms used by suppliers did not take into account the dramatic change in shopping habits that the coronavirus crisis caused.

Ian Wright, the chief executive of the Food and Drink Federation, told the hearing the food distribution network in the UK was “completely banjaxed” by the change in consumer behaviour in the early stages of the crisis.

Wright said: “The fantastic just-in-time processes rely on using immediate previous behaviour as a predictor of the next behaviour, which is fine unless the next behaviour is completely different – which it was.

“So the algorithms were completely banjaxed and as a consequence of that shelves were empty and the distribution system began to be incapable of dealing with the demand.”

Wright said the crisis had shown how vital the food industry was. “If you can’t feed a country, you don’t have a country,” he said. “That has been borne out in this crisis in massive order.

“We don’t think the current immigration bill addresses the sort of country we want to be. I think it is surprising that given the lessons of the last last eight or nine weeks that the immigration bill is back in parliament unchanged, given what we have learned about the people working in food and drink, in distribution centres and the care sectors.”

Calling for the home secretary, Priti Patel, to look again at the bill, he said: “It would be a shame of the legacy of this crisis was an immigration system that didn’t work.”

The government is drawing up plans to require travellers arriving in the UK to isolate for 14 days as part of an effort to limit the number of new Covid-19 cases.

Wright said: “I think there is a big concern about access to labour in the UK for seasonal workers. The quarantine regulations that are being talked about at the moment are a big concern.

“It’s difficult to see how you are going to get around that for those who are coming in – normally about 60,000 workers come in for the harvest. It’s going to be difficult to see how they are going to arrive if they are due to arrive during the quarantine period.”

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Nick Allen, the chief executive of the British Meat Processors Association, said the crisis showed that food security should be taken “really seriously”.

He said up to 70% of the people who worked in the plants he represented were not UK citizens. Allen said it was possible British people would take up jobs that used to be done by foreign nationals.

“But we have huge concerns and would really like to think more flexibility will be brought in,” he added.

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Boparan group set to buy Carluccio’s restaurants

Ranjit Singh Boparan, the owner of the Giraffe restaurant business and the founder of 2 Sisters Food Group, is poised to buy nearly half of the Carluccio’s Italian dining chain out of administration, in a deal that will save about 900 jobs.

Boparan Restaurants, which owns the Giraffe, Fishworks and Ed’s Easy Diner chains and the UK franchise for the US fast food chain Slim Chickens, is expected to confirm a deal to take on about 30 Carluccio’s outlets as early as Tuesday.

About 43 further outlets of the ailing chain, which called in administrators from FRP in March, will be permanently shut with the loss of about 1,000 jobs, according to Sky News. All the Carluccio’s outlets are currently closed and its staff on furlough under the government’s coronavirus lockdown rules.

Boparan has been labelled the UK’s “chicken king” owing to his role as the co-owner of 2 Sisters Food Group, which supplies about a third of the chicken on UK supermarket shelves. The company was the subject of parliamentary and food watchdog inquiries in 2017 following a Guardian and ITV News undercover investigation into food standards at a 2 Sisters plant.

The billionaire’s food group, which recently brought in the turnaround expert and former Co-op boss Richard Pennycook as chairman, also includes Fox’s Biscuits. Boparan’s interests also include the turkey producer Bernard Matthews and the upmarket Cinnamon Club restaurant in London, as well as the Boparan Restaurants group, which operates 140 outlets across six chains after closing at least 20 Giraffe outlets in 2019. It previously owned the Harry Ramsden’s fish and chips empire, which it sold off last year.

Boparan is extending his empire as restaurants and pubs have come under increasing pressure during the coronavirus crisis. UK operators have been closed since the end of March and will not be allowed to open to diners until at least 4 July, when the third step in the government’s lockdown easing plan is due to take place, if progress in tackling the virus allows. Even then, businesses are expected to have to operate with strict physical distancing rules, which are likely to cut into profits heavily.

Carluccio’s was founded by the late chef Antonio Carluccio in 1999 and is currently owned by Landmark Group, a Dubai-based retail and hospitality conglomerate.

It called in administrators following a difficult period for casual dining chains after a private-equity fuelled over-expansion ramped up competition before the industry was hit by rising costs and slowing consumer confidence.

In 2018, Carluccio’s landlords backed a restructuring plan in the form of a company voluntary arrangement (CVA), an insolvency procedure which allowed it to close about 30 of its restaurants.

The latest Carluccio’s deal comes as Casual Dining Group (CDG), the owner of Bella Italia, Café Rouge and Las Iguanas, which employs about 6,000 people, is also set for a major restructure.

The group, which runs about 250 restaurants, is expected to close outlets and put some parts of the business into administration after hiring the advisory firm AlixPartners to help consider options. The beer, chips and mussels chain Belgo and the group’s smaller chains Huxleys and Oriel are also at risk as part of the restructure. The group sold off its La Tasca tapas brand this year.

A spokesperson for CDG said: “As is widely acknowledged, this is an unprecedented situation for our industry and, like many other companies across the UK, the directors of Casual Dining Group are working closely with our advisers as we consider our next steps.”

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KFC to reopen further 80 outlets in UK, bringing total to 100

The fast food chain KFC is ramping up plans to reopen its UK outlets despite the coronavirus lockdown, pledging on Wednesday to open a further 80 restaurants – for delivery only – which will take the total to 100 by early next week.

The UK’s largest fast food chicken chain has gradually re-opened 20 of its restaurants over the past couple of weeks in order to offer a pared-back menu.

The American-owned company said in a statement that it was taking the major step “responsibly and carefully, with stringent processes and hygiene measures put in place. All our restaurants will continue serving a limited menu to help the smaller kitchen teams maintain social distancing.”

KFC has more than 900 branches in the UK and employs around 24,000 members of staff. Deliveries can be made via Just Eat, Deliveroo and Uber Eats.

The chain is joining a growing band of fast-food companies seeking to ease back into business during lockdown, albeit not without controversy given strict social distancing requirements.

Burger King, which has already reopened six sites for delivery and takeaway, is opening eight more from Wednesday, including its first ever drive-through.

The UK’s restaurants and pubs are allowed to prepare food in their kitchens for collection or delivery in spite of the lockdown, and many have been providing free meals to NHS staff and other key workers.

This week Nando’s reopened six restaurants in London and Manchester for delivery orders.

KFC said opening the restaurants would mean that it could continue donating food to the NHS and key workers – typically 10,000 meals a week in partnership with Deliveroo alone – in addition to the 13,000 it has already donated.

What are the UK government’s ‘five tests’ for ending lockdown restrictions?

The UK government has said that these five tests have to be met before they will consider easing coronavirus lockdown restrictions:

  • The NHS has sufficient capacity to provide critical care and specialist treatment right across the UK
  • A sustained and consistent fall in daily deaths from Coronavirus
  • Reliable data to show that the rate of infection is decreasing to manageable levels across the board
  • Operational challenges including testing and personal protective equipement (PPE) are in hand with supply able to meet future demand
  • Confident that any adjustments to the current measures will not risk a second peak of infections that overwhelms the NHS

Paula MacKenzie, managing director of KFC UK & Ireland, said: “I’m really proud of the way we, with our franchise partners, have been able to carefully get some of our restaurants up and running over the last two weeks.

“This next stage allows us to continue to provide wider access to hot food for those who need it most, whether that’s key workers after a long shift or those working from home who need a quick, affordable dinner for the family. I’m hugely appreciative of our team members who have returned to work – it’s a challenging time for everyone, but we’re so glad to play our part in helping to feed the nation.”

McDonald’s announced on Tuesday it was carrying out operational tests behind closed doors this week in preparation for a limited reopening of some restaurants.

Paul Pomroy, the chief executive of McDonald’s UK and Ireland, said reopening would happen only “when we are absolutely confident we can have the right measures in place to ensure everyone’s wellbeing”.

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Burger King, KFC and Pret announce limited UK reopenings

Three UK takeaway chains have launched limited reopenings, with staff wearing personal protective equipment (PPE) and practising physical distancing.

Burger King and KFC have reopened some sites for delivery only, while Pret a Manger is doing deliveries and takeaways.

The three firms argued that reopening would help NHS staff and other key workers, and promised that stringent safety measures for their employees were in place.

Burger King was operating at four sites from Thursday in Bristol, Swindon and Coventry as part of a phased reopening of more restaurants in the coming weeks.

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It said it had introduced measures including providing PPE masks and gloves for staff and training them on the government’s physical distancing measures.

Katie Evans, the marketing director at Burger King UK, said: “We hope that reopening these restaurants for delivery services goes some way to lifting our customers’ spirits in these difficult times.”

She said the restaurants would give away 1,000 meals a week to NHS staff based nearby. “We want to demonstrate how appreciative everyone at Burger King UK is of their efforts in these unprecedented times,” she added.

Pret a Manger was opening 10 shops in London near hospitals run by 160 workers who had volunteered to return. Its CEO, Pano Christou, said the shops would offer a reduced range, plus essentials such as milk, bread and butter for takeaway and delivery only.

There will be a 50% discount for NHS workers until the end April and meals will be donated to homeless people.

Christou said: “This will help give frontline healthcare workers better access to freshly prepared food while also getting our supply chain up and running again to deliver food to the homeless.

“My priority is always to protect our teams and customers as best we can, which means we have put in place a number of new social distancing measures.”

Although government guidelines state that restaurants and pubs have to close, they can prepare food for collection or delivery.

KFC has reopened 11 UK restaurants with a limited menu in the past week for delivery only, in London, Hampshire, Birmingham, Glasgow, Sussex, Greater Manchester and Staffordshire.

The chain said: “We’ve spent the time since closure developing new processes to ensure we can reopen carefully and responsibly, which we’ve now started to do. We also saw the impact the situation is having on those who may not be able to easily get to the supermarkets, like key workers. There’s a need for affordable, accessible food and we wanted to do our part.”

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