Breweries 'could have been saved by workers'

September 13, 2006: A call for new forms of social ownership for small breweries - including management buyouts and co-operatives - is made by editor Roger Protz in the 2007 edition of the Good Beer Guide, published by the Campaign for Real Ale (CAMRA).

Mr Protz says the cull of regional brewers must be stopped in order to ensure a good choice of beers for drinkers.

“In the past year, Gale's of Hampshire, Ridley's of Essex and Hardys & Hansons of Nottingham have been taken over. Gales and Ridley's have already been closed by their new owners, Greene King and Fuller's, while the future of Hardys & Hansons in the hands of aggressively expanding Greene King is very much in doubt.”

“These companies could and should have been saved. They are of the right size to be run and owned by their management and workers or turned into community co-ops.

“Management buyouts can succeed. Bass sold its Highgate Brewery in Walsall to its management in 1995. The Old Crown pub in Hesket Newmarket, Cumbria, and its small brewery were sold to the local community, who run both pub and brewery as co-ops.”

Mr Protz says that when breweries such as Gale's and Ridley's are family owned, with no stock market involvement, the families should offer the companies in the first instance to their workforce.

“There are advantages to families if they sell to the employees and allow them to pay over a period of five years. Such an arrangement would mean the family could avoid paying capital gains tax.

“If the family demands the full amount up front then the employees would have to raise the cash from loans or grants. They could seek support from their trade unions or from local authorities.

“When a brewery is quoted on the Stock Exchange the employees should buy a 5% stake in the company and start to build a bigger stake over time until they have a sufficient shareholding to influence company policies.”

An example of how successful the suggested practice can be is the John Lewis Partnership - which includes Selfridges and Waitrose. It is run and owned by its workers and is one of the biggest retail groups in Britain. The son of the founder of the group gave the company to its workers back in the 1920s.

Several professional football clubs have been saved from going out of business by their supporters. Brentford, Chesterfield, Rushden & Diamonds and Stockport County are now owned and run by their supporters, while a supporters' trust is now part-owner of Lincoln City.

Mr Protz added: “It would be naïve to suggest that running a professional football club is analogous to owning and controlling a brewery. But a common factor is that they both have loyal fan bases. Trusts involving both brewery employees, pub tenants and drinkers could play a crucial role in saving local breweries for their communities and protecting them from takeovers and closures.”

l The Good Beer Guide 2007 is available from CAMRA priced £14.99. Order by calling 01727 867201 or order online at www.camra.org.uk