Saturday profile: Robert Wiseman

Published on Friday 31 October 2008 19:52

MOST cows in the UK inhabit the western half of the country. As it turns out, the rainier climate on the Atlantic side of Britain provides a more amenable environment for the bovine than the dryer, albeit more populated east.

Robert Wiseman, the chief executive of one of Britain's top three fresh milk dairies, has used this to his company's benefit. Locating the most recent of its seven dairies in the west – at Droitwich Spa, among one of the world's largest dairy herds, and most recently at Bridgwater in Somerset – gives the dairy an advantage, simply by being closer to the cows.

"The rest of the dairy industry has a lot of legacy issues – they are built in the wrong place. You have got two big dairies inside the M25. You don't see many cows around there," observes Robert Wiseman's spokesman Graeme Jack. Wiseman himself is also close to the cows. Outside the company's headquarters at Nerston, near East Kilbride, there are black and white Friesian cows – those used in the dairy's packaging and lorries.

It is where Wiseman's father, also Robert, established the milk round in 1947 that would eventually become one of the biggest dairy businesses in the country, listed on the London Stock Exchange with an market capitlisation of about 280 million.

The milk sector is under pressure. At the end of next week, the company is will bring out its interim results. Wiseman, who has previously described his firm as "a logistics business that happens to have a dairy at the other end", faces rising costs – the raw materials such as the milk, the plastic for the milk bottles, the petrol to run its 1,200 strong fleet of lorries. On the other side he also faces the intransigence of retailers reluctant to pay more – or to charge their customers more.

Added to this is a sector struggling under increasing burdens. According to NFU Scotland, milk production in the UK has not been so low in 37 years. Dairy farmers are going out of business as they struggle to contain costs.

"We are going to see in 2009 some processing capacity in the UK closing down," warns Ian Potter, a leading UK milk quota broker. "But clearly it won't be Wisemans."

Wiseman is, according to Potter, a "white knight" of the otherwise cut-throat dairy industry. Although, as one of the big three milk processors, which also includes Arla and Dairy Crest, Wiseman is inevitably the subject of grumbling.

Last year some farmers, concerned about not benefitting from a spike in commodity prices, held a protest outside Wiseman dairies.

"I call Wiseman the white knight of the industry. Since the demise of the Milk Marketing Board when farmers could sell direct to grocers, Wiseman has consistently been one of the top-end payers," says Potter.

"At this moment in time there are plenty of dairy farmers who would jump at the opportunity to be offered a Wiseman contract," adds Potter.

As if times weren't hard enough, Wiseman had also until last month been embroiled in a lengthy and difficult investigation by the Office of Fair Trading. The regulator was looking into alleged cartel activity in Scotland which at one point involved dawn raids on Wiseman offices.

This ran alongside a separate OFT investigation on price fixing between supermarkets and milk producers, which resulted in Wiseman paying out a 6m fine.

Last month the OFT cleared Wiseman, along with other Scottish dairies including Grahams and Scottish Milk Dairies, of the price fixing allegations due to insufficient evidence.

The issue had been rolling on since 2000, sparked by rival Express Diaries which had recently acquired a small dairy in Nairn.

Industry insiders suggest the row was sparked when Wiseman opened its Droitwich dairy smack in the middle of Express territory. Express then retaliated by moving into Scotland and then complaining to the OFT.

Wiseman feels vindicated by the OFT's decision but it hasn't been easy. It has eaten up eight years of time, and cost Wiseman "hundreds of thousands" of pounds.

If you nicked Wiseman's skin you might find milk flowing in his veins, not blood. Although he fancied being a chef because he liked cooking, the milk round was always the first priority since the age of 12 when he would get up before 5am to do the morning milk run before school.

The founder, Robert senior, passed the company on to his sons when he turned 60. There are three brothers, Alan, Robert and Gavin as well as sister Jean.

Alan, the chairman, was the first to join the business in 1967, while Robert followed in 1976. Gavin is the purchasing director while Jean is not involved with the running of the business.

Robert is married to his second wife Paula, and between them they have six children.

They married a few years after the tragic death of his first wife, Janette, who died suddenly of a brain haemorrhage while the family was on holiday in Florida. As difficult as this was, he has come to terms with his loss.

When turned 50 in 2005 he threw a massive party at his home, Auchterarder House, Perthshire, which he and Paula have lovingly restored since they bought it in 2002.

Friends of the family say it was Alan who set the company on the acquisition trail. soaking up 56 rivals since the brothers took over. Meanwhile, Robert is "very hands-on, day-to-day guiding the company and its strategy".

Jamie Mathieson, director of stockbrokers Bell Lawrie, has known the family since the company floated in 1994, counting Robert as a "pal".

"Alan is silent but deadly. Robert is much more vocal and demonstrative. But both of them are highly focused and very able, and they know their industry inside out," says Mathieson.

BACKGROUND

&#149 Robert Tennent Wiseman, 53.

&#149 Raised in East Kilbride, he joined the family business in 1976 after graduating from Auchencruive Agricultural College in Ayr the same year his father hands over the business to his sons.

&#149 The family's wealth is now estimated to be 170m.

&#149 1985 – Robert is appointed managing director

&#149 1994 – The company floats on the LSE

&#149 2002 – Becomes chief executive

&#149 2007 – The company is fined 6m by the Office of Fair Trading for its involvement in a price-fixing scandal.

&#149 Brothers Robert and Alan cash in shares worth more than 15m in shares in the business to beat changes in CGT legislation. Robert retained 17.24 per cent, while overall the Wiseman family holds 35.7 per cent

&#149 2008 – A profits warning due to rising costs sees share price slump nearly 40 per cent. Share price has failed to recover.