Bloomberg News

Beer Trucks Hit Road Early as Fuller Hopes Olympics Saves Summer

July 20, 2012

July 20 (Bloomberg) --Fuller, Smith & Turner Plc (FSTA), the brewer of cask ales including London Pride, said the Olympics may salvage a rainy summer that has kept Britons away from pub gardens, even as event traffic presents delivery challenges.

Fuller, which operates more than 360 pubs in the U.K., plans to make deliveries in the small hours as some road lanes in London are dedicated to athletes and dignitaries from 6 a.m. to midnight, Chairman Michael Turner said in an interview. Trucks will deliver from 1 a.m. to 5 a.m. from the brewery in Chiswick, on the Thames a few miles west of the Olympics site.

The delivery plan should beat traffic congestion and if the weather cooperates, U.K. brewers will make up lost ground with the Summer Olympics, Turner said. Fuller’s like-for-like sales at its managed pubs and hotels declined 1.1 percent in the 15 weeks ended July 14, following the wettest June since 1910, as fewer people drank outdoors.

“The sun needs to come out and play so that we can all go out and celebrate team Great Britain with a pint of London Pride,” Turner said in the July 18 interview.

The company completed the acquisition of 30 pubs last year, increasing the size of its chain before the games, which start July 27.

“Fuller’s massive investment in new pubs is performing well and it is excellently positioned to benefit from the Olympics,” Paul Hickman, an analyst at Peel Hunt, said in a note to clients, reiterating a buy recommendation on the stock.

Young’s Beer

The decline in pub revenue missed a prediction for growth of 1 percent by Lindsey Kerrigan and Simon French, analysts at Panmure Gordon. While Fuller’s recent acquisitions are “impressive,” the analysts said in a note to investors that they “continue to prefer Young’s for those seeking exposure to London and the southeast.”

Young & Co.’s Brewery Plc (YNGA), another capital-city favourite with almost 250 pubs, moved its beermaking out of London several years ago after operating what was considered the oldest continually operating brewery in the city. Its shares are down 2.8 percent this year through yesterday, compared with a 2 percent decline for Fuller.

Young’s said July 10 that “trading has improved significantly” in recent weeks after being depressed by the rainy weather despite the Queen’s Diamond Jubilee celebrations and the Euro 2012 soccer championship. The brewer opened The Calf pub at the Stratford Westfield shopping center in June and also operates The Cow “on the doorstep of the Olympic Park,” Chairman Nick Bryan said in a statement.

Fuller’s beer volume rose 1 percent in the 15 weeks through July 14 as it introduced new brews including “Hope and Glory.”

To contact the reporter on this story: Maria Tadeo in London at mtadeo@bloomberg.net

To contact the editors responsible for this story: David Risser in London at drisser@bloomberg.net; Douglas Lytle at dlytle@bloomberg.net


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