How the brewers of Smethwick became the plaything of Barbados billionaires

Martin Vander Weyer’s Any Other Business

If you don’t follow hospitality-trade news closely, you could be forgiven for thinking of Mitchells & Butlers as a Midlands-based brewery notable for its handsome Edwardian pubs. But it has not been that for decades, and if it was once an icon of progress in the beer trade, its name these days symbolises everything that’s depressing about modern corporate wheeler-dealing.

Let me simplify the history. The Smethwick breweries of Henry Mitchell and William Butler merged in 1898; their company’s heyday lasted until 1961 when, during a fever of consolidation across the industry, it merged into what became Bass Charrington. After Margaret Thatcher’s Beer Orders forced the break-up of ‘tied’ pub estates, the brewing arm of Bass was eventually sold to Interbrew of Belgium. That in turn became part of a giant multinational called (take a deep breath here) Anheuser-Busch InBev, which claims a quarter of the global beer market. The pubs and hotels side, meanwhile, became Six Continents plc, and the Smethwick brewery closed to become a housing estate. Finally, in 2002, the pubs — including chains such as Harvester, bought from Forte, and Beefeater from Whitbread — were demerged from Six Continents under the revived name of Mitchells & Butlers.

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Julie Burchill

Will I ever pee again?

So that is the business you read about today: the operator of 2,000 watering-holes, ranging from All Bar One to ‘classic’ pubs such as the White Horse at Parson’s Green, where I drowned my sorrows in the Seventies. But along the way, M&B became an object of ardent financial desire, a status which radically altered its destiny. It fought off a bid from the Iranian-born tycoon Robert Tchenguiz, then got involved with him in a real-estate sale-and-leaseback that failed but left M&B with a £274 million loss on hedging contracts which turned into a one-way bet against falling interest rates; to complete this Noughties time-capsule of folly, the banks involved included RBS and Kaupthing of Iceland.