Foster to overhaul Inntrepreneur chain
Courage chairman poised to head Britain's largest pub company
Monday 24 July 1995
Inntrepreneur is jointly owned by Grand Metropolitan, the international food and drinks company, and Foster's Brewing of Australia, which is in the final throes of selling Courage to Scottish & Newcastle Breweries for pounds 425m.
Lord Sheppard, chairman of GrandMet, is believed to have pushed hard to recruit Mr Foster, who joined Courage in 1983 and has spent the best part of his three years as chairman negotiating the sale of the UK's second largest brewer to S&N.
Reaction among some publicans to the pending appointment appeared to be favourable, although one said Inntrepreneur "would have to move mountains to restore our faith in the management". Mr Foster was unavailable for comment.
Nigel Cairns, an Inntrepreneur lessee and spokesman for the Bristol Licensed Victuallers Association, said: "Foster has a better understanding of the trade than Inntrepreneur's previous management. And he must have taken some notice of the unrest among publicans."
The senior post at Inntrepreneur has remained vacant all year since Robert Williams, chairman and managing director of Grand Metropolitan Estates, then Inntrepreneur's management company, was made redundant.
Publicans blamed Mr Wil-liams for their problems. His policy of treating Inntrepreneur as a property company rather than a drinks retailing operation came under intense scrutiny by MPs on the agriculture select committee in 1993.
GrandMet has since stepped back from managing Inntrepreneur, although David Tagg, the international company's property director, has been handling affairs during the hunt for a chief executive.
Meanwhile, Inntrepreneur is struggling to keep pace with the rapid changes in the pub industry, mainly because it has been hampered by legal action from hundreds of publicans over terms contained in its 20-year leases.
Brewing and pub industries are inexorably on the path to consolidation, and financially weak operators are in real danger of collapsing in the wake of advances from being made by other companies.
Bass flexed its financial muscles on Friday, picking up the chain of 78 Harvester food pubs from Forte for pounds 165m cash. The number of Harvester pubs is expected at least to double in the next two years through conversions of large Bass houses.
Food is the main driving force in the pub industry. Whitbread's food turnover in the UK is second only to the McDonalds hamburger chain, and all the regional brewers draw 15 per cent of sales from selling meals.
The Inntrepreneur company was born out of a breweries-for-pub swap merger between GrandMet and Courage. Inntrepreneur has an asset base valued at pounds 1.2bn but, despite banking facilities of pounds 800m, lacks the financial clout to compete with the big pub-owning brewers - particularly in the rush to sell more food.
There is scope within the company's banking facilities, however, to increase investment significantly. A quarter of the pounds 800m facilities is on roll- over terms, which means that Inntrepreneur can sell pounds 200m of pubs without repaying a single penny of its loans.
The Inntrepreneur estate is slightly bigger than that owned by Bass, which will be toppled as Britain's biggest brewer once S&N clears remaining regulatory hurdles to take over Courage.
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