Charlene de Carvalho: the new queen of British brewing

You may not have heard of her, but she is the second-richest woman in Britain. What's more, she owns a controlling stake in Heineken, the company that just bought British brewing institution Scottish and Newcastle.

Mention the name Charlene de Carvalho to most people and you are likely to be greeted with a blank stare. The Heineken heiress keeps a low profile and lives an unremarkable life, blending into Chelsea like any other elegant, middle-aged wife and mother.

Yet, with a fortune of £3.2bn, de Carvalho is Britain's second richest woman, says The Mail on Sunday. And last week she became "the new queen of British brewing" when Heineken, in which she has a controlling stake, took over Britain's biggest brewer, Scottish & Newcastle.

De Carvalho, 52, has brewing in her blood. Her mother, Lucille, was the daughter of a Kentucky bourbon baron; her father, Freddie Heineken, the visionary Dutchman who clawed Heineken back from the brink of disaster after debt, divorce and bad management saw the family lose control of the firm his grandfather had founded in 1873. By secretly buying up shares, 30-year-old Freddie regained the firm in 1954 and went on to turn Heineken into the world's second largest brewer by volume. "I wanted to prevent strangers from doing strange things under my name," he said.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

A bon vivant who regularly hosted the Dutch royal family on his yacht, Something Cool, Freddie Heineken was also a marketing master, says The Times. He gave the brewer back its traditional green label and tweaked the beer to suit national markets. He ran a tight ship, but with humour. "I do not sell beer, but gaiety," he said. Even being kidnapped in 1983 failed to quash his spirits. After a three-week ordeal, Freddie claimed the kidnappers had tortured him by making him drink Carlsberg.

Following Freddie's death in 2002, there was "frantic speculation of an imminent unwinding of the family's stake", says the FT. It may have been no bad thing. After years of growth, Heineken had become an also-ran in a consolidating industry; impeded from expansion, many said, by the family's reluctance to loosen its grip by issuing shares to fund acquisitions.

But while Charlene showed no desire to run the business, she also showed no signs of being prepared to let it go. After studying law at the University of Leiden, she briefly became an intern at Heineken before marrying Michel de Carvalho and moving to London. She became a patron of the arts and a mother of five but never stopped calling the shots at Heineken, says BusinessWeek: she retained a say over everything, from packaging to acquisitions. And behind her stands her husband, Michel, now vice chairman of Schroder Salomon Smith Barney, and the one who now "speaks for the family" on the Heineken board.

Michel de Carvalho's life "reads like something out of Hello magazine", says The Daily Telegraph. Born of Brazilian-English parents, he became a child acting star and later skied for Great Britain in three Winter Olympics. De Carvalho seemed destined for Hollywood, and later said that quitting acting was "just about the most stupid decision" he ever made. But he's been no slouch as a banker, rising from a junior position at Nikko Securities to become one of Citigroup's leading men in London and a driving force in securing Heineken for the next generation. Charlene, too, has publicly vowed to keep the company independent she hopes her eldest son will eventually take the reins, noting that the family is "part of Heineken's past, present and future". Shored up by the spoils of the Smith & Newcastle deal, there's not much sign of that changing.

How Scottish & Newcastle played a blinder

The likely carve-up of Britain's last independent major brewer by "a bunch of lager louts at Carlsberg and Heineken" (to quote the Daily Mail) provoked the usual outcry of a heritage lost all the more so because of the timing of the move. There was something poignant, said Grant Ringshaw in The Sunday Times, about the 259-year-old Scottish & Newcastle agreeing a takeover on one of the biggest drinking occasions in Scotland's calendar: Burns Night. The firm was the last of the "Big Six", the once-mighty group of brewers who, until being blown open by the Monopoly Commission in 1989, dominated the UK trade.

But will anyone really mourn their passing, asked the FT? "Certainly not the British pub-goer,"who long ago signalled "indifference to the brewers' products"; nor the operators who have since transformed Britain's gloomy, smoke-smelling pubs. Scottish & Newcastle shareholders should also be raising a glass or two. Led by Sir Brian Stewart, the Scottish & Newcastle board has played a blinder, says Ringshaw, forcing Carlsberg and Heineken to raise their bid three times (pushing the price up £3bn to £10.3bn) even against the backdrop of a "savage bear market".

Within the deal, Heineken will get Scottish & Newcastle UK businesses, including John Smith's, Foster's, Kronenbourg and Newcastle Brown Ale, as well as some overseas operations. But the bulk of these, including Scottish & Newcastle's stake in valuable Russian joint venture, BBH, will go to Carlsberg. It's been a "messy and long-winded affair", said Andrew Hill in the FT. But Scottish & Newcastle shareholders should approach it like a haggis: "savour the warm-reekin' richness of the finished product and try to avoid thinking about how it was made".