Findlay: ‘Marston’s is like a family business with the bad bits taken out’

Ralph Findlay’s voice is full of affection and pride when he begins talking about his time at Marston’s. He has been on the company board for 25 years and, along with his 20 years as CEO, it has provided him with an intimate knowledge of the company’s history and achievements.

When asked about leaving a company after such a long association, “It’s never easy,” he admitted. “You have to judge the right time to do it, but businesses do need to move forward.”

One of the things that attracted Findlay to Wolverhampton & Dudley Breweries, Plc, as Marston’s was known at the time when he joined in 1994, was that “it was a very hands-on business.”

After time spent at Price Waterhouse, Bass and Geest (now Bakkavor), Findlay joined the business as financial controller. “I wanted to get more of a grip on operations, the nitty gritty, and not be a sort of head-office-bound person. David Thompson [then managing director] was perfect for that because he would give you responsibilities that you had not got any experience in and would allow you to take them on and see how it went. And that was fantastic for me.

“I didn’t have any thought that I would still be here - never mind 27 years later - I didn’t think I would be there five years.”

Marston’s highlights

Findlay mentioned that one of the highlights of his time at Marston’s was the 1998-99 period, when he was finance director and when management trebled the size of the business in the space of 12 months, believing that “consolidation was going to be one route to achieving growth in difficult market conditions.”

This “extraordinary period” included WDB’s hostile bid for Marston, Thompson & Evershed. But Marston, in its defence, launched a bid back for WDB. Findlay described it as “a highly unusual move called the ‘Pac-Man’ defence, which is when the thing being pursued turns on its aggressor.” Nonetheless, in February 1999, WDB won and acquired Marston, Thompson & Evershed for £285m.

Also in 1999, WDB bid for Morland Plc, but lost out to Greene King. This was followed six months later by an agreed merger with Mansfield Brewery Plc.

The 1998-99 period of acquisition was followed by period when WDB was “under bid conditions for a full twelve months.” First came a £470m takeover bid by Robert Breare’s Noble House, then a £485m hostile bid by Robert Tchenguiz’s Pubmaster group.

“It was properly frenetic, an extraordinary era,” said Findlay, which was then followed by a period of consolidating businesses including Eldridge Pope, Jennings, and Wizard Inns, a process that took the business away from being a Midlands business to one with a national footprint.

Findlay highlighted several personal learnings from this experience including the need to have a clear understanding of the value of the business, knowing your shareholders and communicating regularly with them. It was important not panic and have good attention to detail, he said. “You’ve got to sweat the small stuff in such circumstances.”

Another highlight for Findlay was the challenge of dealing with the 20-year decline in ale volumes, with the company heavily exposed to this decline through its Banks and Pedigree brands. Findlay talked about looking to the US market and noticing the growth in regional, craft and provenance.

With the thought that these trends would be appearing in the UK market, the company set about creating a portfolio of brands which “achieved really good growth in brewing” and culminated in the deal to create the Carlsberg Marston’s Beer Company in November 2020. By the time the deal was done, 90% of the sales of its beer brands were outside of the Marston’s group, to either other pub companies or the off-trade.

The culture at Marston’s also received praise from Findlay. “It’s a very strong culture,” he said. “It’s like a family business with all the bad bits of family business taken out. There is a very strong sense of ownership and people.”

Thoughts on Andrew Andrea, the new CEO

With Findlay’s departure from Marston’s Andrew Andrea becomes the new chief executive officer. Andrea was previously the group’s chief financial officer and corporate development officer and has served on Marston’s board since 2009.

Findlay talked in positive terms about Andrea: “He knows us very well and right now, given the uncertainties in the market, having someone who knows which levers to pull is a good thing. He is very operational, very focused and very disciplined.

“He’s got a very clear idea about where he wants to see operational improvement and where Marston’s can be better. And I think he is going to be good for the business for all those reasons.”

Findlay’s new role at C&C

Findlay will become chairman of C&C Group, the Tennent’s lager and Magners cider owner, from March next year. C&C also has a 47% stake of Admiral Taverns.

“It’s in a sector I know well and really enjoy,” he said, when asked about the move to C&C. “There are a whole series of business that have all got opportunity and still need to be brought under one roof at C&C.” He cited Matthew Clark, the distributor, as an example, suggesting it had “massive potential” which had not yet been fully exploited because of Covid-related disruption.

C&C also has a 47% stake of Admiral Taverns. “It is a growing business and a successful business. And will go further with the recent addition of the Hawthorn estate.”

“I think the C&C business is in an interesting place, has interesting operations within it, great brands and will evolve.”

“I am delighted to have the opportunity to work with him at C&C,” he said of the prospect of working with David Forde, C&C’s chief executive.

Pubs’ enduring appeal

As has been the case for the last forty or fifty years, the pub sector is being challenged, said Findlay, not just by the off trade, but by current concerns around VAT, business rates and staff pay.

“Pay rates for staff are inevitably only going to go one way,” he said.

He talked about drink categories: “The most challenging problem currently is traditional cask ales, which are generally catering for an older consumer, who is more reluctant to go out post-Covid.”

“Craft and world beers is where the on-trade growth is. And the way the on-trade will deal with declining volume will be to premiumise.”

This means that consumers will pay more for the best brands in the sector, which Findlay described as a “good development,” due to the need to make more margin on brewing which has been a “low-return-on-capital business”.

“Fundamentally I am an optimist about the sector” he said, adding that he sees pubs as being adaptable and having an enduring appeal.

He is particularly positive about community pubs. “The role of that they play has been enhanced and cemented by what has happened in the last 18 months,” he said.

And for his leaving do, Findley said, “I insisted it happen in a pub. I didn’t want to have it in a restaurant or a hotel. We are going to a Marston’s pub and I am looking forward to that.”