A bar room brawl has broken out between JD Wetherspoon and Heineken, resulting in the pub chain refusing to serve the brewer’s products at any of its 926 pubs in the UK and Ireland.
The spat, which puts at risk £60m of business a year between the two companies, erupted after Heineken refused to supply its lager and Murphy’s stout to Wetherspoon’s new pub in Dún Laoghaire, County Dublin and demanded a personal guarantee from Wetherspoon’s chief executive, John Hutson, in order to supply any other of its products to the pub. The guarantee would make him liable for any debt the pub group had with the brewer.
Wetherspoon is due to open its Dún Laoghaire pub next week, its second venue in Ireland, as part of an assault on the Irish market where it hopes to open 30 pubs.
The latest spat follows a row with Guinness owner Diageo over pricing, which resulted in Wetherspoon’s first pub in Ireland – The Three Tun Tavern in the Dublin suburb of Blackrock - launching without being able to serve Ireland’s most famous pint.
Wetherspoon founder and chairman Tim Martin said: “We have been trading with Heineken for 35 years and they have never requested personal guarantees before. It’s obstructive to do so now, especially when we made record profits of around £80m last year.
“The refusal to supply Heineken lager and Murphy’s just before the opening of our new pub in Dún Laoghaire, which represents an investment by us of nearly €4m, is unacceptable and hard to understand.”
A spokesman for Heineken UK said it was “unfortunate that commercial issues in Ireland between Heineken Ireland and JD Wetherspoon have led to the current situation. We are seeking a resolution as soon as possible. It is not our intention to comment in any further detail at this point.”
Drinks industry analysts said Heineken, which is considered a premium lager in Ireland, may have been attempting to hit back at Wetherspoon for charging €3 a pint for its lager when the average price in the country is about €5. They also speculated that the request for a personal guarantee provided Martin with an opportunity to make a stand in a country where brewers tend to have more power than pub companies, which are typically far smaller than in the UK.
Simon Matthews, analyst at Goodbody stockbrokers in Dublin, said: “Whether it is a coordinated strategy, or Heineken Ireland has acted without considering the repercussions for the rest of the group, I don’t know. But clearly it has upset JD Wetherspoon’s management.
“Asking for a personal guarantee from the chief executive of a company of this size, that is performing strongly, is very unusual. I think that the reaction from Wetherspoon is understandable seeing as it is due to open an 8,000 square foot premises next week and these requests from Heineken appear to have come out of the blue.”
Apart from its lager and Murphy’s, Heineken also owns Beamish stout. Wetherspoon plans to serve Bath Ales Dark Side Stout and Marston’s Revisionist Craft Stout instead.
