Scottish & Newcastle picks an outsider as new chief

Scottish & Newcastle broke with tradition yesterday and named an outsider to take over as chief executive, ending an 11-month search for a successor to Sir Brian Stewart, the executive chairman.

Tony Froggatt, a former Seagram executive, will join the brewing and pubs group next month. Mr Froggatt, 54, will initially replace Guy Dickson, the former managing director who retired in December, but will assume executive responsibilities in July, when Sir Brian steps aside to the role of non-executive chairman.

Analysts said Mr Froggatt would have his work cut out to restore S&N's credibility after a disappointing year that has seen the company's shares more than halve. A profits warning in February because of a bungled restructuring and fears that a dividend cut is imminent have dragged the shares down to their lowest level for more than five years. Yesterday they fell 2p to 340p.

Mr Froggatt, who has dual British and Australian nationality, has worked in the drinks industry for the past two decades, most recently as president of Europe, Middle East & Africa for Seagram Spirits & Wine. He spent 15 years at International Distillers & Vintners, which was part of GrandMet.

Mr Froggatt's appointment confounded City observers, who had thought S&N would promote Ian McHoul, its finance director, to the post.

John McGrath, the chairman of Boots who knows Mr Froggatt well from his time at GrandMet, said he was "an excellent guy ... who will bring a lot of experience of the beverage industry". Mr McGrath added: "He can lead a team well, he gets on very well with people. I think that's incredibly important."

But industry executives were less sure. One chief executive called the decision "a lost opportunity" for S&N, adding: "It doesn't strike me as the most dynamic or dramatic of changes." One S&N insider described the choice of the former Cinzano chief executive as "evolutionary rather than revolutionary".

Sir Brian cited Mr Froggatt's "strong record of developing international drinks businesses and brands", such as Chivas Regal and Absolut vodka, as justification for his appointment. S&N has made great strides overseas in the past few years, adding France's Kronenbourg and Finland's Hartwall to its stable of UK brands such as John Smith and Newcastle Brown Ale.

Mr Froggatt, who flew back to his current home in Sydney last night, said he "looked forward to making the most of the opportunities ahead". He will receive a base salary of £630,000, in line with Sir Brian's.