Magic Rock brewery acquired by Australian Lion group

Will Hawkes

Will Hawkes

29 March 2019

Magic Rock is the latest British craft brewery to fall to the multinationals after the Australian group Lion completed a deal to acquire 100% of the Yorkshire company for an undisclosed fee today.

Managing director Richard Burhouse, who founded Magic Rock in 2011 alongside brewer Stuart Ross, says that Lion’s desire to grow the business in a sustainable way appealed to him, and that their approach – in August last year – came at the perfect time. 'What they wanted to do was a really good fit for what we want to do with the business,' he says.

'It’s not just about buying the brand, it’s about the access we get to their knowledge and their people who are used to growing businesses. We’d had some other approaches over the last year but they didn’t appeal like this one. Lion is not going to rip the heart out of the brands, they can help us do it better.'

Lion, which is wholly owned by Kirin Holdings, bought the Bermondsey brewery Fourpure in July last year. Global markets managing director Matt Tapper is not ruling out further purchases in the UK. 'We’re excited where we are with Fourpure and Magic Rock,' he says. 'We’re going to keeping our eyes and ears open and if there’s an opportunity, then who knows?'

Magic Rock, which made 16,000 hectolitres of beer last year, has been an important player in the recent history of British brewing, helping to drive the demand for American-style pale ales with brands like Cannonball and High Wire. It was also among the first UK breweries to operate a US-style taproom at its Huddersfield brewery, which opened in 2015.

The brewery remains very well-regarded – the 4000-square foot taproom is widely considered to be one of the country’s best – but Burhouse appears to have grown tired of craft beer’s thirst for novelty. It was a factor in his decision to sell.

'I spent a lot of time in the early days being infatuated about feedback on the internet and it’s become apparent to me as we’ve grown the business that that’s not a responsible way to act,' he says. 'I’ve got people’s livelihoods on my conscience. It’s not about pleasing people on the internet. That’s not achievable. I want to grow brands.'

Burhouse, who owned 60% of Magic Rock’s shares with his wife (there were six other shareholders) says he hopes the deal will provide security for Magic Rock’s 45-strong staff. 'I’m conscious of my responsibility to the business and the staff,' he says. 'I don’t have all the skills required for the next step and I don’t want the brewery to wither on the vine. We need help, and Lion offer that.'

The news, which has been the subject of persistent industry rumour in recent weeks, comes at a time of significant turmoil in British beer. Distributor Bottle Shop went into administration earlier this week, and the last year has been notable for the volume of brewery buyouts and investments, including the sale of Fuller’s brewing business (bought by Asahi in January) and partial sale of Beavertown (Heineken bought 49% last summer).

Burhouse is contractually obliged to remain with Magic Rock for at least four years and says he has no plans to leave after that. 'There’s nothing else I’ve ever been as passionate about,' he says. 'I’m a Huddersfield lad born and bred and I’m not planning to move. It’s the perfect place for me.'

Tapper says he doesn’t want to change what Magic Rock do. 'We’d be crazy to do that,' he says. 'They’ve had eight years of making great beer. You’ve got a brand that clearly excites people, Richard and his team have done a great job. I’m confident we’re going to brew more beer, and I assume we’ll create more jobs. We want to get more beer into more people’s hands. We’re looking forward to doing that.'

Others will be less optimistic: smaller operators may feel they are now one step closer to being squeezed out of the market. Siba chairman Ian Fozard said at BeerX earlier this month that he believes the number of breweries in the UK has begun to drop, a sign of how tough the market has become. Lion may not have the financial punch of AB InBev or Heineken, but it’s still a very significant player.

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