Guiness Peat Group (GPG), the activist investor best known for its previous campaign against Young & Co's Brewery, has written to fellow Adnams shareholders to complain about how the company is being run.
GPG blames the brewer and pub operator’s recent disappointing performance on poor corporate governance and calls for the dismantling of the “anachronistic dual share structure” that gives the Adnams family effective control.
The letter lays the blame on investments made by Jonathan Adnams, who maintains the family involvement begun when George and Ernest Adnams bought the Sole Bay Brewery in Southwold in 1872.
Adnams, who has been chairman for three years and was managing director for nine years before that, has overseen an £8m modernisation programme at the brewery and built a £6m distribution centre, both of which have won awards for their green credentials.
The Times newspaper says today that GPG has complained about Adnams’ 2008 result and said they were “so poor as to suggest that the substantial expansionary investment projects sanctioned by the board since 2000 have actually weakened rather than strengthened Adnams's traditional brewing and pub businesses in East Anglia”.
GPG, which has 5% of the equity but only 2.5% of the votes, questioned the rationale for developing facilities aimed at turning Adnams's eponymous ale into a national brand, and added: “It is plain that the background of a falling national beer market is not conducive to an expansionist strategy.”
It also criticised the brewer's launch of Cellar&Kitchen, a chain of shops selling kitchenware and wine. It described the venture as “far removed from the company's core competencies as a regional brewer and owner of pubs”.
In response, Adnams has written to the 1,300 shareholders rejecting many of GPG's points as “inaccurate”.
