CARSON ATTACKS HEAVY TRADE DISCOUNTING

Published: 23 July, 2008

By Tim Atkin MW

The heavy discounting that has been a prominent feature of the trade over the last 12 months is unsustainable, according to Chris Carson, CEO of BRL Hardy Europe. Talking to Harpers in the wake of a comprehensive restructuring' of the BRL Hardy business in the UK, Carson said, I'm not sure that the current level of discounting is sustainable for brand owners or retailers, because cash margins are being eroded.' In the week before Christmas, BRL Hardy announced three redundancies: Anthony Eadle (from administration), Rob Thompson (sales) and Gary Burch (marketing). The company has also combined its sales and marketing departments to form two integrated units. The first of these, covering the on-trade - as well as the multiple specialist, wholesale, cash and carry, independent, convenience and travel retail - will be run by trading director Len Bodill. The second, run by development director Adrian McKeon, will be responsible for marketing and selling to the multiple grocers. Paul Koks, trading director for Scandinavia and Mainland Europe, Jon Mullen, chief financial officer, and Adrian Ford, operations director, will still report to Carson. The re-alignment reflects our desire to focus more attention on certain areas to meet our growth expectations in 2003', said Carson. As Bodill's unit will employ two to three times as many employees as McKeon's, this could be read as a move away from BRL Hardy's previous reliance on the multiple grocers. We will be looking to grow our business in the grocery sector,' said Carson, but we will be looking to grow it even more in the on-trade, the multiple specialists and the convenience sector.' Carson did not go as far as Graham Cranswick-Smith, who recently described Australian brands as cannon fodder' in the major multiples (see Harpers, 22 November 2002), but he is still the first major UK trade figure to publicly express his disquiet about the UK retail scene. Really deep discounting is fraught with danger. BOGOFs are lowering the average retail price for wine in the UK, because the consumer is being pulled towards these irresistible deals,' he said. BRL Hardy did BOGOFs in 2002 on its Hardy's Crest brand, but Carson told Harpers that this will not be a major part of our activity' in 2003.

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