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UK Food and Drink Report Q1 2008Published by: Business Monitor International Published: Feb. 4, 2008 - 77 Pages Table of Contents
AbstractThe UK’s per capita spending on food and drink continues to rise as a move towards convenient andhealthy products drives consumers towards higher-margin products. This, coupled with a general trendtowards premium, higher-quality products, is forecast to push per capita spending up by 30% over thenext five years. This increase is good news for both manufacturers and retailers as the higher margins willaid sales and profit growth in both sectors.The move towards premium products is highly pronounced in the beer and spirits sector and this hasprompted UK based brewer SABMiller to acquire Dutch brewer Grolsch. This acquisition boosts itsrange of premium beers and allows the company to offer a premium brand with a strong heritage that isalready very well known in the UK. Beer sales by value are forecast to increase only slightly over thenext five years as volume sales are fairly flat in the mature UK market. Therefore to improve, or even justmaintain, profits brewers will need to increase their margins by selling more of these premium products.In another brewing development Carlsberg and Heineken launched a hostile joint bid for UK firmScottish & Newcastle (S&N), with the high-growth Russian venture Baltic Beverages Holding,currently jointly held by S&N and Carlsberg, the motivation behind the move. This move highlights theimportance that UK and Western European brewers place on emerging markets as sales in many WesternEurope markets, including the UK, have been flat for several years and premiumisation cannot be reliedupon to improve profits indefinitely. The UK’s mass grocery retailers (MGR) breathed a sigh of relief as the UK’s Competition Commissionannounced its findings from its investigation into the MGR sector. The results were good news for mostMGRs as the commission found that any lack of competition was due to a scarcity of supermarkets inparticular areas giving certain retailers virtual monopolies over certain towns or districts. The report alsohighlights that the land-banks that retailers have built up are maybe being used to stifle competition.Therefore the one retailer who may not be totally satisfied with these findings is Tesco who, with thelargest amount of undeveloped plots, may be forced to sell-off a considerable portion of its land-bankwhich may open it up to increased competition. Get Full Details About This Report >> |
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