Magazine article Marketing

OPINION: Why Heritage Means Brown Ale Must Remain Forever Newcastle

Magazine article Marketing

OPINION: Why Heritage Means Brown Ale Must Remain Forever Newcastle

Article excerpt

In response to the increasingly competitive market forces in the UK beer market, Scottish & Newcastle (S&N) must now save costs. In a classic move, it hired consultancy Credit Suisse First Boston to suggest cost-saving strategies.

Credit Suisse turned to page one in the Big Book of Management Consulting and recommended a rationalisation of the distribution chain.

It estimated pounds 25m could be added to annual revenues by closing one of S&N's breweries. The first to fall victim was S&N's Fountainbridge brewery in Edinburgh. It will close at the end of this year. How long before the next small S&N brewery faces the chop?

Now here comes the moment of truth. S&N is the brewer of Newcastle Brown Ale. The famous 'One and Only' has been brewed for decades at the Tyne Brewery in Newcastle, but there is a rumour sweeping Tyneside that a change may be on the cards.

The state-of-the-art Federation Brewery across the river in Gateshead has been kegging Newcastle Brown since October and many, including a director of the Campaign for Real Ale, fear the temptation to save money will triumph over the tradition and heritage of the brand. Could S&N really be considering taking the Newcastle out of Brown Ale?

Brand versus economics. It is an intriguing and increasingly common strategic conundrum for organisations. Last year, Deutsche Bank faced exactly that question. The global bank had become increasingly frustrated with the arcane employment legislation and heavy taxes it experienced in Germany. …

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