Don’twriteour pubs off yet...

Aug 5 2008 by jez Davison, Evening Gazette

AFTER a lifetime in the beer and pub industry, his glass is still half full. But then you have to stay optimistic when you’re opening public houses during one of the worst trading periods in living memory. JEZ DAVISON raises a glass to Alistair Arkley...

PUB entrepreneur Alistair Arkley is not a happy man.

He’s fed up with premature reports in the national media proclaiming the demise of the industry.

According to him, the pub trade is not spiralling into an irreversible decline and most landlords do take their corporate social responsibility seriously.

He also believes Teesside can be a world-leading business centre and local entrepreneurs aren’t lagging behind the rest of the UK - a point he set out to prove recently by joining the board of the British Business Angels Association (BBAA).

Like most Scots, he is not short of an opinion. “Some in the media would have us believe that landlords are the root cause of teenage binge drinking,” he says. “Police checks find there are very few under-age drinkers in pubs. Most landlords are sensible enough to know they could be prosecuted if they serve under-18s or people who are too drunk.

“The problems lie in the availability of cheap booze in supermarkets. Tesco and Sainsbury’s should have designated tills for the purchase of alcohol.”

He’s not prepared to let the industry, that has taken up much of his time since leaving Aberdeen University 30-odd years ago, take the rap for society’s ills, but he does concede it’s having a rough ride.

According to the British Beer and Pub Association, there were 1,400 pub closures in 2007 - around 27 per week - compared with 200 the previous year.

Beer sales in pubs are at their lowest level since the Great Depression in the 1930s, down 10.6% on the same quarter last year. And, according to sector analysts Christie & Co, the period since the introduction of the smoking ban just over one year ago has seen the worst trading conditions in living memory. On top of that, the Chancellor has hiked up the price of a pint by 4p.

It’s enough to have any landlord weeping into his beer. But, according to Alistair, the tradition of going to your local pub is not dead, even if it is becoming increasingly difficult to drag punters through the doors.

“Smart pub operators are competing more generally in the leisure market. They’re finding other ways to add value to the pub experience by concentrating on their food offering, hosting events or improving their facilities,” he says.

After selling his £32m pub group, New Century Inns, to brewers Greene King in November, Alistair’s busy building a similar business with strong emphasis on good, locally-sourced food.

Aimed at “the middle-market white van man who likes to take his wife and kids for a good meal”, his business model involves buying “big pubs with large covers” and boosting footfall and turnover by revamping the facilities and the menus.

He claims to be “not too bothered” about making money from this venture but his track record suggests he probably will.

After becoming managing director of the Camerons Brewery in Hartlepool in 1985, he went on to raise £30m to establish Century Inns and helped to grow Orchid Drinks - famous for its Amé, Aqua Libra and Purdey’s brands - into a £20m business that was eventually sold to Britvic in 2000.

Fascinated by the cut and thrust of commerce since his years as an engineering undergraduate in his home town of Aberdeen, Alistair honed his fledgling commercial skills in sales and marketing roles at Proctor & Gamble before being head-hunted by Scottish & Newcastle in 1979. Two years later he became director of sales and marketing and ran a team of 90 before joining Camerons in 1985.

After leaving to establish Century Inns in 1991, he masterminded a flotation that would eventually see the firm sold to Enterprise Inns in 1999 - the year in which he launched the New Century Inns model of buying managed pubs and converting them to leaseholds.

After a period of such frantic activity, it was little wonder he was listed in The Publican’s 1990s roll call of “People of the Decade”. But on Teesside, he was more influentional still, picking up a CBE in 2006 for his contribution to regeneration in the North-east, where he was a former board member of regional development agency One NorthEast and chairman of both the Tees Valley Partnership and the Northern Business Forum.

His corporate ventures are cyclical - he claims they occur roughly every seven years. And now he’s itching to get on with the next by building his “white van man” pub empire.

The vehicle this time will be Billingham-based New Century Enterprises, in which he owns a 50% stake, an umbrella company for Chameleon Inns, in which he’s owned a one-third share since 2001, and The Passionate Pub Company, in which he has just under a 25% interest.

Meanwhile, he’s rubbing up his halo by offering his services to BBAA, a Dragon’s Den-style investment and advice vehicle established to support small companies and start-ups.

For Alistair, the BBAA is as much about advice as venture capital opportunities. And having built a reputation for unravelling knots in overly complex business models, his advice is simple: “Work out what assets you’ve got and how to add value to them. Follow your convictions and if it doesn’t work out, be prepared to fall over and pick yourself up again.”