Tom Ward: Time to honour benefits agreed in S&N takeover

A long, happy and healthy retirement, time to spend with your family and friends, the opportunity to travel and enjoy your hobbies - isn't this what we all dream of as we spend 40-plus years of our life dedicated to work?

This is certainly the expectation of thousands of my colleagues who have dedicated large parts of their working life, or in many cases, all of their working life, to the success of a great Edinburgh business, Scottish & Newcastle plc.

S&N's roots date back to 1749 when William Younger laid the foundations of a business which grew to become one of the world's leading brewing empires, as well as a major public company headquartered in Scotland.

Until three years ago, S&N's brewing interests reached from the Capital to new markets in China, India, Russia and beyond. At one time the business also included thousands of the best pubs in the UK, including such iconic city hostelries as the Caf Royal and Rutland Bar.

However, the course of the company's history changed forever in 2008 when the S&N Group was acquired by Heineken and Carlsberg and the business was split up. The UK business, with its number one market position and household brand names, was very much a "jewel in the crown." Heineken acquired the UK business, which is now based at South Gyle and has its HQ in Amsterdam.

Over the years, S&N had developed a well-deserved reputation as a responsible and admired employer where it was common for members of the same family to join the firm, with often two generations working in the business. S&N was very proud of its commitment to employee pay and benefits and in particular its record on pensions; the company had made pension payments offsetting for inflation for almost 40 years thus ensuring the wellbeing and welfare of not only employees but also their dependants.

During negotiations with Heineken, S&N wanted to protect the interests of employees and pensioners who had dedicated so much of their life into building S&N into the business which was so attractive to the foreign suitors. With this priority in mind, a number of meetings took place with Heineken's senior team from Amsterdam to discuss the subject of pensions and the future security and welfare of the company's current and past employees.

S&N's team was reassured and Heineken gave a public undertaking in advance of the final stages of the acquisition which said two things - firstly, that the takeover would not affect the rights of pensioners and secondly, it was Heineken's intention to continue S&N's long-standing practice of providing discretionary increases on pensions in line with inflation. Heineken also advised the pension trustees and the Board of S&N that Heineken understood the position of the pension fund and stood behind this commitment.

With this clear undertaking in place and set on public record, the acquisition was recommended by the board, accepted by shareholders and then approved by the Court of Session in Edinburgh.

However, only three years later and with no consultation or explanation, Heineken has failed to fulfil its previous undertakings; in late 2010, pensioners were advised that there would be no increase on their pre-1997 pensions. Pensioners' frustration and disappointment has been made worse by the lack of consultation and explanation. Nor has there been any clarification of Heineken's future intention.

The global standing, size and reputation of Heineken as the world's most international brewer, gave pensioners great comfort and reassurance but sadly, Heineken is now taking a position which is at odds with previous statements.

This is a major issue for tens of thousands of S&N pensioners across the UK, many of whom are in Edinburgh. We have been treated unfairly and dishonourably. Most importantly, the continuation of this decision will lead to the rapid devaluation of pensions and potential hardship.

At a time when there is understandable public concern about the high-handedness of major multinationals after they have taken over important UK businesses, pensioners have formed a group to represent and protect their interests and are asking the UK Government Select Committee to investigate Heineken's actions.

There is no doubt that the progress and success of S&N is due to the efforts and talents of the men and women who worked for it in the past and work for it today. Those men and women deserve to be protected in their golden years of retirement.

Tom Ward is a former S&N corporate development and strategy director and is now the spokesman for the S&N Pensions Group campaign. www.snpensionsgroup.com

A heady brew centuries in the making

The William Younger Brewery was established in Leith in 1749, and was later passed to the founder's son, William Younger II.

In a separate venture, William McEwan established his Fountain Brewery in Fountainbridge in 1856. In 1931 William Younger and William McEwan merged to form Scottish Brewers Ltd, and in 1960 came a further merger, with Newcastle Breweries, to form Scottish & Newcastle Breweries Ltd. Subsequent years saw further changes, among them the acquisition of Matthew Brown breweries and Courage and ventures in both India and China. In 2004 the Fountain Brewery closed.

Joint takeover bids from Carlsberg and Heineken were rebuffed twice in 2007, but were finally successful in 2008.