Opinion

Wetherspoon/Heineken standoff continues

JD Wetherspoon’s abrupt decision to throw out all Heineken products from its 930-strong pub chain in England, Scotland, Northern Ireland and RoI is not without precedent.

It’s understood that the UK-based chain has taken such drastic action in the past when it fell out with a major equipment supplier some years ago.

The present situation appears to have arisen following Heineken Ireland’s refusal to supply Heineken lager and Murphy’s Irish Stout to Wetherspoon’s second Irish pub in Dun Laoghaire, The Forty Foot.

It’s understood that Heineken had come under pressure from Dublin publicans demanding to know if the brewery had supplied Wetherspoon’s first Irish outlet at preferential rates when The Three Tun Tavern began selling lager at €2.95 a pint shortly after opening. This priced the product at nearly €2 below many suburban Dublin pubs.

The brewer also demanded personal guarantees of Wetherspoon’s Chief Executive John Hutson before supplying Wetherspoon’s second outlet, The Forty Foot.

Wetherspoon Chairman Tim Martin stated, “We’ve 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 £80 million last year.

“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 €4 million, is unacceptable and hard to understand.”

For its part, Heineken Ireland would only state that it was “aware of the comments made by JD Wetherspoon and its Chairman.

“It is unfortunate that we find ourselves in this position with a customer,” it continued, “It is not our intention to comment in any further detail at this point as we do not wish to comment publicly on relationships with any customer.”

The standoff is likely to test brand loyalty among Heineken’s customers – both trade and consumer – as Guinness discovered already here in relation to Wetherspoon’s earlier adoption of Heinken products in preference to Diageo’s when it opened The Three Tun Tavern.

But perhaps the real question is just how significant is the withdrawal of Heineken’s products from all Wetherspoon outlets? With Wetherspoon consuming less than 0.4% of Heineken’s £1.6 billion annual UK sales total, Wetherspoon’s £60 million sales figure is worth even less in terms of the level of profit taken from this arrangement by Heineken.

Not surprisingly, talks are likely to be going on and the likelihood is that they will eventually come to some form of agreement. After all, they’re both huge companies. But both remain tight-lipped as to their future relationship, most likely as the ongoing talks await resolution.

Things will happen, undoubtedly, but whether the Heineken brand or the Murphy’s brand wends its way back into the JD Wetherspoon operation both here and in the UK remains open to question.

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