Greene King breaks ground on new GBP 40 million brewery
United Kingdom | The pub operator and brewer Greene King broke ground on a new, state-of-the-art brewery in Bury St Edmunds, Suffolk, in August, marking the start of a GBP 40 million (USD 54 million) construction project to build a more sustainable facility.
The move from its historic Westgate brewery in the scenic centre of Bury St Edmunds aims to modernize its operations and reduce its environmental impact, while retaining hundreds of local jobs and maintaining Bury St Edmunds' status as a historic brewing town. Locals, particularly those who live in the rather posh town centre, which has an 18th century grid system of narrow streets, will probably toast the old brewery’s eventual closure with champagne.
The new brewery, which is built on a greenfield site outside of town right next to Greene King’s new distribution centre, is expected to come on-stream in 2027. The brewer said that at the new site, water usage in the brewing process would be reduced by more than 50 percent per pint, alongside improvements in energy efficiency. It aims to be carbon net zero by 2040 and reduce its greenhouse gas emissions by 50 percent by 2030.
New brewery has less capacity
Whether Greene King will completely vacate its Westgate Brewery, where it has been brewing cask ales for over 200 years and also operates a small microbrewery, is not clear. Media reports differ on that issue. The company also owns the Belhaven Brewery, Scotland’s oldest working brewery, which was established in 1719.
What is clear is that its old brewery (with a capacity between 500,000 hl and nearly 1 million hl beer per year) has become too large for its current needs and probably too costly to run. Insiders estimate that the publicised investment would buy Greene King installations with a capacity of 150,000 hl beer per year. This reflects the fact that in the past 40 years the production of beer in the UK has halved.
Cost rises hit profits
By its own account, Greene King runs some 2600 pubs, restaurants and hotels across England, Wales, and Scotland. This makes it one of the biggest pub companies in the UK. In its financial year 2024 (ended 29 December), it reported a loss of GBP 147 million (USD 198 million) before tax, impacted by a “dramatic increase” in costs.
While revenues increased by 3.2 percent to GBP 2.45 billion (USD 3.3 billion) and adjusted operating profit was up 6.4 percent to GBP 198 million, economic conditions as well as non-cash goodwill and property accounting impairments resulted in a statutory operating loss of GBP 16.4 million and an on-paper statutory loss before tax of GBP 147.1 million. This compares to a GBP 45.2 million profit in the previous year.
The number of Greene King’s managed pubs fell from 898 to 878 during the year. Its branded pub division, which includes Hungry Horse and Chef & Brewer, fell from 600 to 580 sites and the number of sites under leased, tenanted and franchise agreements fell from 1125 to 1114, it was reported.
Growth through acquisitions
Over the past 25 years, Greene King has sought to expand through acquisitions, including Morland Brewery (1999), Ruddles Brewery (2002), Ridleys Brewery (2005), Belhaven Brewery (2005), and Kimberley Brewery (2006). Of the acquired breweries, only Belhaven is still in operation; the others have been closed.
In 2019, the Hong Kong-based CKA Group acquired the pub and beer company for USD 5.6 billion. CKA Group’s diversified UK portfolio also includes the pharmacy chain Superdrug, the mobile operator Three, utilities firms and windfarms.
