Courage hit again as Rhodes joins exodus

Simon Rhodes is the latest to quit Scottish Courage. David Benady and Stephanie Bentley ask if he is a casualty of a branding battle

When the second-most senior marketer at the nation’s biggest brewer decides to throw in the towel and takes a job in a totally unrelated sector, it’s a fair bet there’s a story behind it.

That is just what Scottish Courage’s brand director for lagers, Simon Rhodes, has done amid reports, denied by SC, of conflicts between the company’s marketers and its brewery bosses. Rhodes is leaving the Edinburgh-based brewer to take up the post of group marketing director at healthcare company PPP (MW April 10).

Rhodes has refused to make any comment on his move. But at the heart of the story is the merger of two businesses with contrasting views of the world.

In 1995, Scottish & Newcastle paid Courage shareholders 425m for the brand strengths and clever advertising of Foster’s, John Smith’s and Holsten. Courage, lacking a network of pubs to distribute its brands, had traditionally concentrated hard on its marketing to ensure it gained listings in rival brewers’ pub chains.

S&N is, by contrast, a distribution-led organisation, with a huge network of pubs to put its brands into. When S&N struck the takeover deal, it boasted to the City of 75m savings through rationalisation.

However, there have been reports that this has led to tensions between the “beer barons” in charge of production and distribution at S&N and the new marketing team in Edinburgh. An industry source comments: “Rhodes was not too happy that Scottish Courage is more a trading than a branding company.” Senior S&N executives, on the other hand, were concerned that marketing spend was to be refocused on a few big national brands and away from the smaller, regional ones.

What is beyond dispute is that brands such as McEwan’s ale (owned by S&N) are being retrenched into local areas, and micro brands such as Magnet Pale Ale have been axed, while the Home brewery has been closed. Marketing support for other, small brands is being phased out, and S&N, SC’s parent company, has told analysts that some of the smaller brands will be left to “wither and die”, (MW February 9 1996). Last week it became clear SC was cutting back support for its Canadian brand Molson and dropping agency FCB. An SC spokesman says there are “no immediate plans to spend above the line” on the brand.

SC denies this has caused ructions within the beer division. The spokesman says: “It is absolute rubbish. If someone is suggesting a power struggle between the marketing and production people, they are just gossiping.”

Others close to the company take a different view: “I think it is true. The Courage salesforce recognised the power of national brands, and the need to subordinate second-tier brands in the regions. But with S&N you have Newcastle Breweries, Matthew Brown and Scottish Brewers – which prefer supporting their regional brands as opposed to the national brands.

“There is an element of frustration because of the different selling styles. The Scottish beer barons are commonly regarded as the smartest of the bunch. They know what the problem ahead is: it’s going to be like marketing in a foreign country. It is not enough to announce here is John Smith’s – the Scots will say ‘so what?’. They are used to drinking relatively unchallenging beers such as McEwan’s Export and Bass’s Tennents. You have a problem here in trying to introduce beers that are firstly English, and secondly have a different flavour,” adds the source.

But there is another theory. Rhodes’ high-profile exit comes after the departure of a long line of less well-known senior marketers from SC. Strategic planning director John Roberts, marketing controller for Foster’s Peter Harding, marketing manager for Miller and Hofmeister John Edwards, marketing controller for Kronenbourg Brian Crean and head of new product development Frances Brindle have left. These all came from Courage, and a common explanation, favoured by the company, is that they were unhappy uprooting their families and making the journey north of the border. Overall marketing director John Nicolson, a Scot and the man in charge, has no such qualms and has happily relocated.

At least one well-informed source believes that this is the reality behind Rhodes’ departure: ” Rhodes is very capable, very bright. He was very good with the brand owners but he didn’t want to live in Scotland.”

If the reason for all these departures is indeed the problem of relocation, that cannot augur well for SC. How will it lure the UK’s top marketers if most of them baulk at the idea of moving away from London and the Home Counties?

Rhodes has worked under Nicolson’s shadow for many years – at Birds Eye, at Courage and now SC. Going to PPP gives him a chance to shine on his own, even though it is not within the classic packaged goods area he is used to. If speculation on an imminent takeover of PPP is well founded, there could be an advertising boost for the company.

But he leaves an important gap at SC that could be hard to fill.

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