Inside track

How do you see the lager market developing over the next few years?

For us at Scottish & Newcastle (S&N), innovation and product quality has driven Foster's wider and faster than ever before - consumers are willing to re-appraise standard lager because they know that they a getting a cold, consistently high-quality pint that they will enjoy and come back for again.

In terms of where we go from here, it really depends on consumers' expressed needs. In June, we purchased the rights to the Foster's brand in Europe and we know it has great potential to develop into other categories.

We have just launched Foster's Twist and it's no secret that we have also been looking for low alcohol products; but these will only be successful if we can deliver great taste and consistent quality.

Why have you put so much investment behind Foster's Twist? Surely lager with lime is an old concept?​

The reason we have invested behind the brand is that we think it is a winner - early indications are that drinkers agree with us.

Before we launch any product, we undertake a huge amount of consumer research to understand whether we are meeting genuine consumer needs. The concept of Foster's Twist is a lighter drinking lager with a lime note that is derived, in part, from a careful selection of hops.

This leads to a more subtle flavour combined with a very distinctive Foster's taste. A modern "twist" on a classic drink if you like.

How much of an adverse effect do you anticipate the smoking ban having on your beer and cider portfolio?​

Early indications from Scotland are that the pubs and bars that have not planned or invested for the ban are the biggest losers.

We are certainly seeing customers who have provided good quality outside facilities, or adjusted their offering, doing better than those who have simply gone into denial. While some brands may suffer others may well emerge and thrive as new drinkers come out for the first time. There are a number of reasons to think that matters will be less marked in England. For a start, licensees have known what to expect for some time now and will have plenty of time to prepare for a ban (probably in the summer of 2007). There is also a higher density of managed houses where a systematic approach will be taken to preparing for the ban.

Nonetheless, we have to recognise that the smoking ban represents a major market disruption and that this is going to make life very tough for a lot of the on-trade market. In essence our summary would be that it will accentuate the trends that are already established.

Overall, I believe that we are well prepared as a business and there is much we can do to mitigate the negative effects whilst helping our customers to benefit from the positives.

Several supermarket chains claim brewers are responsible for the rock bottom prices of beer and cider in their stores. Is this fair?​

No - a fairer way to put this is that the problem of cheap beer in stores, particularly used as footfall drivers, is shared across the industry rather than an issue exclusively for retailers or brewers. As ever, there is a question of balance in these matters and we have simply expressed a view that there is now a lot of emphasis on cheap drinks.

Our views, expressed to the Competition Commission, have generated healthy debate on the matter and we are certainly keen to work closely with the multiple grocers and other stakeholders to find solutions to this issue. This approach has worked very well in the on trade with the vast majority of daft promotions and irresponsible products long gone - a real credit to UK licensees.

Has the success of Irish cider Magners in the UK taken you by surprise?​

We have tracked the growth of Magners for some time now and were well aware of the brand's potential from our experiences in Ireland.

In reality, the vast majority of growth in the UK cider category has come from Strongbow and we have been extremely pleased with the brand's progress since we acquired the Bulmer's business in 2003.

What Magners brand owner C&C has done is bring significant new investment into the premium packaged cider category and this has created new demands for the drink.

Because of our knowledge and expertise in the category, we have been able to develop and launch three new entrants into the premium packaged category - each with a specific consumer or drinking occasion in mind.

What's the biggest challenge today regarding the relationship between brewer and pub company?​

It's quite clear that we have a common objective - to ensure that the on-trade remains an attractive environment for consumers to enjoy their leisure time; despite the challenges of changing legislation, consumer demands and competition from other sectors.

In practice, that means matching the right drinks to the right retailing environment. I think that recent progress in responding to the responsible drinking challenge shows what can be achieved when retailers and producers work closely together rather than blaming each other.

The role of the British Beer & Pub Association has been hugely influential in facilitating this collaboration and I will be using my chairmanship to build on this good work.

CV:

• December 2005:​ Appointed chairman of British Beer & Pub Association
• 2002-present:​ Managing director and chairman S&N UK
• 1997-2002:​ Head of UK on-trade
• 1996-1997:​ Director of corporate development, S&N
• 1993-1996:​ Head of UK equities NatWest Securities (now Deutsche Bank)
• 1990-1992: ​Brewing & brands director, Marston's
• 1985-1989:​ International Brewing, Distilling & Leisure Analyst, Wood Mackenzie
• 1983-1984: ​Drinks analyst, Rowe & Pitman
• 1982-1983: ​Tenanted sales manager, Grand Met
• 1980-1982: ​Graduate trainee at S&N (sales & marketing)