Monday Interview: Gary Haigh, Miller Brands UK

Gary Haigh, boss of Miller Brands UK, sees the market for his products growing
Gary Haigh, boss of Miller Brands UK, sees the market for his products growing
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THE smoking ban in pubs was one of the best things that ever happened to a time-warped, women-unfriendly pubs industry, believes Gary Haigh, the managing director of Miller Brands UK (MBUK).

Some might think it a controversial view given that the ban – introduced here in 2006 and the rest of the UK the year after – is widely seen as accelerating pub closures that have seen 10,000 outlets put up the shutters in the past decade.

But Haigh, who has been three years at the UK helm of the SABMiller brewing empire, is unapologetic.

“A smoke-free atmosphere has seen a real improvement in the environment of the on-trade. The smoking ban is one of the best thing that have ever happened to us as a company,” he says.

“It forced pub groups to rethink their models and give a more segmented offer rather than pubs just being about sticky carpets and dartboards that women often avoided. That model was not going to work any more.”

Warming to his theme, he says a more sophisticated pub offering embracing “gastro-pubs, mixed gender pubs, celebration pubs” was the silver lining of the smoking ban.

“The ban was not the only catalyst but it certainly helped,” Haigh says. “The UK has now got an incredibly eclectic, rich, professional on-trade.”

Haigh admits the sociological change also benefited MBUK specifically because it focuses on the premium, upmarket sector of the beer market typified by its leading brands, Peroni Nastro Azzurro, Pilsner Urquell and Miller Genuine Draft.

Currently, about three dozen pubs nationwide are closing a week, but a dozen or so are opening or being refurbished, and Haigh says the latter tend to be more sophisticated – “with great food and toilets” – which play into MBUK’s strengths.

The group is careful where its beers are stocked to preserve their cachet, be it draught Pilsner (number three in Scotland after Tennent’s and Stella Artois) or Miller Genuine Draft, number two in the bottled segment.

Miller Genuine Draft, in particular, built up a firm following over the many years the old Edinburgh-based Scottish & Newcastle Breweries produced it under licence for American giant Miller Brewing before SAB bought the company in 2002.

That determination to sell premium beers only at suitable outlets that could move enough product saw MBUK withdraw from about 200 pubs in the UK a couple of years ago.

Haigh says it is now in about 10,000 outlets out of the UK’s total licensed estate of 100,000 – that’s 10 per cent coverage against 7 per cent a few years ago.

The strategy seems to be paying off. In the year to March 2014 MBUK’s domestic lager volumes climbed 5 per cent, easily outstripping an overall UK beer market down a little under 1 per cent, a similar decline to the previous 12 months.

Since then, the trade has also benefited from a pleasant, if not stunning, summer this year. “Weather can have a big impact, be it snow in winter or rainy weekends. My boss does not accept weather has that big an impact but I think he’s probably pulling my leg on that one.”

As well as taking the smoking ban in its stride, Haigh says MBUK has also benefited from the lengthy period of austerity Britain has been going through.

“In times of austerity it is the mainstream that gets squeezed. Drinkers migrate to premium or economy products,” he says. “And, even in austerity, beer is an affordable, everyday treat. We are not breaking the bank.”

He also believes there is a north/south divide on attitudes to what many in the brewing industry see as a psychologically significant £5 pint. Haigh arguably knows what he is talking about, having grown up in Lancashire and married a lady from York, where his dad once worked for the Rowntree chocolate company.

“If you were talking about £5 in York for a pint they would probably say that is a rum price to be paying. But when you come down to the South-east people are more prepared to accept higher prices. They are paid better,” he says.

Before he took the reins at MBUK, Haigh ran SABMiller’s business in Poland, another country with a strong beer heritage. However, there are differences, he says, with 88 per cent of beer and lager in Poland consumed at home, compared with a 50-50 split between pub and home drinking in the UK.

It leads the MBUK man to one of his favourite topics, the “over-taxation” of beer in Britain compared to other parts of the world.

Haigh welcomed George Osborne’s scrapping of the beer escalator, by which tax on beer automatically went up 2 per cent above inflation every year, in his 2013 Budget, and a penny being taken off beer tax in each of the past two years.

But he says the Polish public would never have accepted what became predictable increases in UK beer, cigarettes and petrol taxes over many years.

“If you tried that in Poland there would be a revolution. They are used to beer tax maybe going up every four or five years.”

He is also against minimum alcohol pricing, which the Scottish Government has proposed but is being investigated by the European Commission for its potential anti-competitive effects.

The basic principle of minimum pricing is that it might curb irresponsible drinking, but Haigh says “the heaviest drinkers are least responsive to price”.

On less contentious issue back on home turf, Haigh says MBUK’s brands – which also include the Czech brand Kozel and a Belgian Abbey ales – are doing well enough for him to feel comfortable in not seeking to add any new drinks to the line-up any time in the near future.

“Organisations can get distracted by new brands, almost like having a new toy, when you already have great stuff in the stable and it is just a case of working it harder,” he adds.

However, he is keen on innovation. During the past year MBUK has introduced unpasteurised and unfiltered Tankovna Pilsner to the UK through beer tankers from Prague directly to permanent tanks in two London pubs in Parsons Green and trendy Shoreditch.

In the past month it has introduced the “mercy dash” to a pub in Dublin, and Haigh says he would “not rule out” a possible extension of the ground-breaking initiative to Scotland at some juncture.

“The only thing is the unpasteurised beer, which gives Pilsner its very freshest taste, has a shelf-life of five days so we have to shift it quickly.”

30-second CV

Born: 1964, Lancaster.

Education: Cambridge University (English literature).

First job: Brand manager, Procter & Gamble. Best piece of business advice received: You have two ears, one mouth. Use them in that ratio.

Car: BMW 3 series. Kindle or book? Both.

Relaxation: Grade 8 standard (the top) pianist; grade 5 standard guitarist.

Can’t live without: Sleep

Favourite holiday destination: Cyprus.

What makes you angry? Tottenham Hotspur FC’s inconsistency.

Best thing about your job: The people in the industry.