Next month’s smoking ban in English pubs will do little to ease the pressure on Carlsberg UK as it grapples with the knotty problem of declining beer sales. As an increasingly weak No 4 in a fiercely competitive British beer market, doing nothing is not an option.

The Danish brewer could do worse than look at what some of its rivals have done in a bid to cut costs and become more efficient. InBev, which makes Stella Artois and Beck’s, also owns Bass Ale, but the actual beer is produced under contract by Marston’s, the company behind Pedigree and Banks’s.

Scottish & Newcastle, the UK’s biggest brewer, has also taken a scythe to its heritage by closing its breweries in both Edinburgh and Newcastle and selling its Courage brand to the Wells & Young’s Brewing Company in Bedford.

The problem that Britain’s brewers face is that the reduction of brewing capacity in recent years has failed to keep pace with the steady decline in beer-drinking. Not only are people going to the pub less; they are also spending their money on different things. With more and more food being served, beer is being replaced by wine. And drinkers who once chose a basic lager such as Carlsberg are now opting for premium continental lagers.

An additional problem for Carlsberg is that its standard lager in the UK has an alcoholic strength of 3.8 per cent, compared with 5 per cent on the Continent. It also sells a 5 per cent lager under the Carlsberg Export tag, but is afraid to scrap the 3.8 per cent product as this would hit volumes.

Carlsberg has also been hurt by the huge changes in pub ownership, which have created ever bigger companies with ever greater buying power. Last month, it admitted that the renegotiation of its supply agreement with Punch Taverns had resulted in “lower prices and lower guaranteed volumes”. The impending expiry of its contract with Mitchells & Butlers is likely to have a similar impact.

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