By Razak Musah Baba
LONDON--A spat between JD Wetherspoon PLC (JDW.LN) and Heineken
over pricing in Ireland has led the pub chain to call time on the
Dutch brewer.
Wetherspoon will no longer sell Heineken products at its 926
pubs in the U.K. The Heineken supply contract is worth some 60
million pounds ($93.4 million).
JD Wetherspoon said on Tuesday the brewer refused to supply
Heineken lager--Ireland's biggest-selling draught beer--and
Murphy's stout, before the opening of its second pub in
Ireland.
Heineken is concerned over Wetherspoon's pricing. Wetherspoon
has been selling Heineken lager and Murphy's at under 3 euros a
pint in its first pub in the country against an average price in
Irish pubs of around 5 euros.
Wetherspoon Chairman Tim Martin said: "The refusal to supply
Heineken lager and Murphy's just before the opening of our new pub
in Dun Laoghaire, which represents an investment by us of nearly
EUR4 million, is unacceptable and hard to understand."
JD Wetherspoon also said Heineken demanded personal guarantees
from Wetherspoon Chief Executive, John Hutson, to supply any other
products for the pub.
"We have been trading with Heineken for 35 years and they have
never requested personal guarantees before," Mr. Martin said,
adding that "it's obstructive to do so now, especially when we made
record profits of around GBP80 million last year."
In response, Heineken said: "We are aware of the comments made
by JD Wetherspoon and its chairman this morning. Heineken U.K. has
had a long standing and successful relationship with JDW in the
U.K. market over a 35 year period...We are seeking a resolution as
soon as possible, and it is not our intention to comment in any
further detail at this point."
This isn't the only supply issue that JD Wetherspoon has faced
in Ireland. Diageo PLC (DGE.LN), the owner of Guinness stout didn't
supply Wetherspoon's only pub in Blackrock, which opened in July,
due to pricing issues.
Goodbody, a Dublin stockbroker, points to the difference between
the pub market in the U.K.--where pub chains have significant
negotiating power, versus Ireland--where the pub market is
fragmented and power lies with the brewers.
JD Wetherspoon shares at 1530 GMT down 1.6% or 12 pence ay 787
pence, valuing the FTSE 250 firm at GBP965.6 million.
-Write to Razak Musah Baba at razak.baba@wsj.com; Twitter:
@Raztweet
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