The Big Interview: Mark Hunter

We’re in the pub across the road from the Molson Coors head office in Burton-on-Trent, Staffordshire, trying to talk positively about the industry when Johnny Rotten, of the Sex Pistols, loudly butts in.

“No future!” he wails. “No future! No future!”

He’s impossible to ignore. Mark Hunter has to laugh. If this choice of Monday lunchtime background music is anything to go by, pubs have only themselves to blame if Rotten turns out to be right.

Of course, Hunter himself, in his first speech as chairman of the BBPA before Christmas, seemed a touch apocalyptic. Falling beer volumes, the rate of pub closures and continuing pressure from the crippling duty escalator meant the very survival of the industry was at risk, he said.

“Yes, I was trying to shake people up,” he admits. “I’ve got this position of influence, and if in five years not much had changed and I hadn’t tried, I wouldn’t forgive myself. We want to have an influence on things at the BBPA — otherwise we wouldn’t bother to turn up — and I’m willing to be outspoken if the alternative is that an opportunity to have an influence hasn’t been taken.”

We can expect Hunter’s outspokenness to be carefully calculated, though. His record as chief executive of Molson Coors UK, on matters such as maintaining profit margins and alcohol policy, shows him as a distinct voice somewhat askew to mainstream industry opinion. But it’s the kind of thoughtful voice, too, that demands to be heard.

He first got involved with the BBPA when he got back from a stint with the parent company in Canada. Around the world Molson Coors encourages its executives to play a part in industry bodies and it was something that made perfect sense to Hunter.

“I was keen to do it,” he says. “I believe the industry should stand together on issues and be united.”

During a couple of years on the BBPA board he worked alongside Marston’s Ralph Findlay — the previous chairman — Enterprise Inns’ Simon Townsend and Shepherd Neame’s Jonathan Neame to put together a new strategic framework for the organisation.

“We thought it was too internally-focused and lacked clarity of purpose,” he says. The result is that Hunter now heads a focused team split into three strands with Everards’ Stephen Gould in charge of pubs, Neame beer and Townsend communications.

Conflicting interests?​

There have been concerns that the way the industry is structured today, the BBPA is hampered by riding the two horses of beer and pubs. Hunter sharply disagrees.

“No, I don’t see that there’s any tension between beer and pubs. Beer is still a very important part of a pub’s offer.”

But when it comes to an issue such as minimum pricing, isn’t there a conflict?

“Minimum pricing is a complex issue. At Molson Coors we’re against alcohol being sold below the cost of production, and other members of the BBPA have different views. There are things as an organisation we can’t take a position on.

“But overall it’s remarkable how well we’re aligned. The BBPA has been clear and consistent on the tie, for instance, and the measures we now have in place — the arbitration framework, the code of practice.”

As a solution to the intractable row about the way pubcos treat their tenants this was, apparently, accepted by Government, only to be thrown into question by Parliament.

“I’m never surprised by the machinations of Government,” says Hunter, philosophically. “But we are disappointed. There has been mischief-making. And among MPs there is still a superficial perspective, a lack of understanding of the business model, that the tenanted model is fundamental to the pub industry.

“I’m not clear what will happen now, politically, but we will make good our commitments and our members are moving towards full implementation of the arbitration framework. There has already been a step-change in the pubcos’ approach, compared with two or three years ago.

“We need to move on,” he adds. “Or there is a danger that the issue becomes a distraction from a growth agenda.”

That may not be so easy, considering how the tie has become entangled with debates around the decline of the pub.

Taxing issues​

“People are rightly concerned about pub closures and falling beer sales but there are lots of forces at play,” Hunter insists.

“The increase in coffee shops, fast-food outlets and so on means it’s a tougher landscape for pubs to operate in. There are bound to be winners and losers.

“On top of that you have the 60% increase in tax on beer and more pressure from red tape and licensing. We want the right framework for growth and we should be talking to MPs about what they need to deliver for the industry and in particular the community pubs sector. If they come at it from that direction it will be more helpful.

“The tax issue has been frustrating. All the evidence now is that high taxation is revenue-destructive — and taxation on beer is contrary to the health agenda, too. We’ve put forward these arguments before, I know, but we’ll keep at it.”

He does have some positive things to say about the coalition.

“It’s been consistent on self-regulation, it’s taken the view that introducing more red tape is a last resort. And the Responsibilty Deal has got traction, I think. But there is a broader challenge — we simply don’t have the ‘thought leadership’ around an appropriate taxation model.”

In contrast, taxation is at the core of Hunter’s own approach, potentially linking alcohol policy to the health of the brewing and pub industries — as well as the health of the rest of the nation.

As a relatively low-alcohol product, beer, he believes, should be getting the tax breaks.

“If we link taxation to social responsibility and health, beer could be a bigger part of the solution — the impact could be liberating. But it is actually taxed more than certain sectors. If you had to try to explain to someone why tax works the way it does in this country, you would be at a loss.”

There was some recognition of the potential for beer to offer this sort of solution in the decision to create a new tax band for beers brewed at 2.8% ABV and below.

Molson Coors itself, reveals Hunter, will soon be announcing a move related to the new opportunity and, significantly, is reviewing its long-established but less-than-dramatically-successful 2% ABV brew Carling C2.

“Time will tell whether drinkers take to 2.8% ABV beers, and it will also be interesting to see whether the Government is open to bands at 3.2% ABV or 3.5% ABV. That would give us a chance to introduce more flavour complexity.”

If the law would only allow it, brewers could be promoting their ability to produce a variety of flavoursome beers at lower strength.
“We need to broaden our appeal, celebrate the benefits of beer and compete with wine — and I’m confident we will see a more cohesive celebratory approach to beer coming through in the next couple of years.

“We must concentrate on the positives. Take coffee. It has the ritual, the flavours — you can pay £3 or £4 for a cup of coffee and there’s no tax on it! We’ve got to become more bullish about the value of beer relative to other beverages.

“Take Sharp’s,” he adds, referring to the craft brewery Molson Coors took over this time last year. “It can’t keep up with demand. It’s an example of what you can do if you get on the front foot. We should be celebrating that.”

The same goes for successful pubs.

“In general the pub experience has step-changed in the past 10 years. We may not have reached North American standards yet, and there’s a lot to learn, but well-invested pubs with good people are doing well and showing there’s a real growth opportunity. That’s a cause for celebration.”

Hear that, Johnny?

Key dates​

1983​ Graduating from the University of Strathclyde, Mark Hunter works for Hallmark Cards before joining the industry with cider-maker Bulmers

1989​ Moves to Bass Brewery’s marketing department

1997​ Appointed to the board as marketing director

2002​ Bass is sold off to Interbrew and Coors, Hunter going with the American brewer

2005​ Following Coors’ merger with Molson he transfers to Molson Canada as chief commercial officer

2007​ Returns to Burton as chief executive of Molson Coors UK and joins the BBPA Council

2009​ Joins the BBPA board

2010​ Becomes chairman of the BBPA’s finance committee
2011​ Takes over from Ralph Findlay as chairman of the BBPA