Ex-Asda chief calls for on and off-trade unity

"It's a great mistake to think it is an on-trade versus off-trade issue. If you carry on down this road of "on versus off" you will lose."

Strong words.

But then Archibald (or Archie to you and me) Norman is a man of strong words. Almost everything he says is considered and direct to the point. Perhaps this is a skill you need to hit the heights he has achieved in business and beyond.

Archie was, after all, the youngest-ever partner at management consultants McKinsey (aged 28); he helped transform Woolworths in the late 1980s and became chief executive of Asda and took it from number four in the market to number two ­ selling it to Wal-Mart in 1999 for £1.6bn.

And he went into politics ­ reaching the Shadow Cabinet in his first term as an MP. So he is both an off-trade retail expert and Westminster insider ­ how the pub trade could benefit from talking to more people like this.

You sense in his eight years in Parliament (he served as Conservative MP for Tunbridge Wells until he stepped down in 2005) he grew very frustrated at the slow pace of change ­ the inability to simply grasp the nettle and change things, as he was able to do at Asda.

He says what you find instead is a group of people who are very reactive; desperate to please the people who voted them in, or could vote them in. "In politics you constantly feel you have to make some form of reactive response," he explains.

In the current climate Norman feels the government is under pressure to make businesses act more responsibly. He feels if the alcohol retail industry can¹t get its act together, we¹d better prepare for the consequences.

"This industry is under attack and if its response is to squabble and fight, then you will all lose. You will all be regulated against. Because what you will have is a divided industry that is putting up no coherent argument," he said.

And by divided industry he does not just mean a divided on-trade; he is referring to both pubs and supermarkets. To return to his comments made at the beginning of the piece, Norman does not see this as an off versus on-trade issue. As far as the government is concerned the alcohol retail industry is one entity and it wants to hear a coherent argument put forward by this "one industry".

I point out that many in the pub trade, both licensees and those who work for pub companies, would find this way of thinking very troubling. The pub industry provides a controlled environment for the consumption of alcohol; it does not cut the price of alcohol to unacceptable levels in its outlets.

Norman accepts that the off-trade is not blameless. "I am not absolving the off-trade from any blame here. But within supermarkets there will always be competition on price. That will never change, so it is a mistake to attack it," he said.Impeded competition

He argues that if you stop deep-cut promotions you have addressed nothing and simply impeded competition and innovation.

"I understand the concerns people have regarding below-cost selling, but do they really want to embrace a regulatory regime that forbids you ever to sell at below cost? What if you have stock in your pub that you need to get rid of in bulk?"

It is a fair point, but my feeling is that most people working in the pub industry would be much happier with that state of affairs than the current one.

"The problems of binge-drinking are nothing to do with pricing or pub opening hours," he says. "It is more to do with deep-seated issues within society ­ with what people do with their social lives. This has to be addressed. Look at university towns populated with students who have nothing better to do than drink ­ this is not a result of Tesco running a promotion."

And he warns of the problems of regulation. One of Norman¹s current roles is deputy chairman of Coles, a supermarket retailer in Australia.

"The on and off-trade is very highly regulated in Australia. You are not allowed to sell alcohol in any food stores. The result of this is that you have less good retailers of alcohol, less good retailers of food ­ and there is still a binge-drinking problem."

So is he right? Does the pub trade need to reach out to the off-trade? Or is he talking naively about an industry he knows little about? The very idea of one of the big pub retailers, be they pub company, regional or family brewer, going to seek common ground with Tesco and Asda, seems so ridiculous as to be laughable.

And that is this industry's greatest problem. The question is, can we throw away the blinkers and heed this very serious warning from someone who has a better understanding of what is going on in Westminster than most?