Guinness PLC buys 25% Harp holdings from Greene King.

Guinness PLC buys 25% Harp holdings from Greene King

Last week, Guinness PLC and Greene, King and Sons announced that Guinness has acquired the 25-percent shareholding and loan stock interest in the Harp Lager Co., owned by Greene King. The Harp Lager Co. will now be a wholly-owned subsidiary of Guinness.

Greene has held a substantial shareholding in Harp since 1979 as part of a long-term agreement for the supply and distribution of Harp's portfolio of lager brands, including Kronenbourg 1664. The shareholding provided Greene King with a stake in Harp lager brewery on the Park Royal site of Guinness Brewing.

Over the last five years, Greene King has enjoyed continued growth in its sales of Harp brands, well ahead of market trends, the company said. The increase in Harp Lager volume has allowed Greene King to exercise its option, contained in the long-term distribution agreement with Harp, to brew Harp under license. Consequently, Greene King made a major investment in its own lager brewery, where it began production of Harp earlier this year. The transition to licensed brewing has thus removed the rationale for Greene King to maintain even a minority share in the Harp brewery at Park Royal.

"We have been delighted with the success of the Harp and Kronenbourg brands throughout our tied estate and free trade business," said Simon Redman, chairman, Greene King. "The sale of our shareholding in the Harp Lager Company is a logical step now that we are brewing Harp lager under license. Our continuing brewing and distribution agreements will maintain our commitment to the Harp brands; our lager strategy is now in place for the 1990s."