Heineken. Same incentives, new owner.
Heineken just invested 44 million pounds in nearly 650 UK pubs, which sounds like good news. They only own those pubs because of a law written to stop breweries owning pubs.
THE GIST ON HEINEKEN: "Last Orders"
Who owns British pubs?
Heineken owns 2,400 UK pubs. Stonegate, run by a private equity firm in the Cayman Islands, owns nearly 5,000. Greene King is owned by a Hong Kong property conglomerate. The British pub is increasingly owned by people who've probably never been to one.
What was the law meant to do?
In 1989 Thatcher's government passed the Beer Orders. Six breweries owned most of the pubs and 25% of the beer. The aim was to democratise the industry and give independent landlords a chance.
What actually happened?
The independents weren't the ones buying. Property companies were. They could buy beer wholesale, sell it to their tenants at a mark-up and charge rent on top: a worse deal with the same control, and completely legal.
Then, surprise, those companies got bought out by multinationals and private equity. Five of the original six British breweries left the country and 130 beer brands disappeared. 20,000 pubs have closed since, and pints are now a tenner in some places.
Why?
Changing who owns something doesn't change what happens to it if the incentives stay the same. The brewery extracts through beer. The pubco extracts through beer and rent. Private equity extracts through the asset itself. Each new owner is more efficient at taking value out and less connected to the thing they own. Heineken is just the latest doing what the system has incentivised it to do. Can you blame them?
Does it matter who owns your local?
Your take. One tap, then see how everyone else voted.
Quick answers
What were the Beer Orders?
A 1989 law passed under Thatcher to stop six breweries owning most pubs and 25% of the beer.
What happened to British breweries?
Five of the original six left the country and 130 beer brands disappeared, while 20,000 pubs closed.
Who owns the most UK pubs?
Stonegate owns nearly 5,000, Heineken 2,400, and Greene King is owned by a Hong Kong property conglomerate.
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