Calder relishing the top job at Tennent's

Before taking the top job at Tennent Caledonian last March, he had clocked up no less than 41 years with wholesaler Wallaces Express.

Mr Calder joined the Irvine-based company full-time from Ayr Academy in 1975, rising to become managing director in 2000 and then staging a management buyout with Chris Cosh 2003.

His move to the Glasgow brewing giant after C&C Group, Tennent's Dublin-based owner, completed its acquisition of the wholesaler last March.

Fast forward 12 months and Mr Calder seems very much at home as we chat in his office at Tennent's Wellpark Brewery in Glasgow.

But he admits life has been hectic since making the switch.

"It's certainly been challenging, coming into a business of the profile and scale of Tennent's and bringing Wallaces into that," said Mr Calder, who succeeded John Gilligan at the helm. Trying to integrate the two businesses has been interesting and challenging and educational to a degree.

"Every day is a school day - when you've been in the trade for 40 years you think you know something about it, but you are learning stuff every day."

The integration of Wallaces into Tennent Caledonian, whose vision is to be a "brand-led, multi-beverage one stop shop" for thousands of Scottish publicans, is progressing well. Stage one was completed in September, when the sales teams merged.

Phase two, which is centred on integrating distribution and IT systems, is running ahead of schedule, and due to complete towards the end of April.

While Mr Calder conceded some among Wallaces' near 300-strong team were apprehensive about the takeover, the majority are buying into the benefits it will bring.

A consultation to transfer the staff from Wallaces to Tennent Caledonian is currently ongoing. Wallaces' Irvine base will remain an important part of its new owner's distribution network, and retain some central administrative functions. Mr Calder said the process of transferring staff has been "relatively smooth".

He said: "Obviously people don't like change. When you put two businesses like this together people are maybe a bit nervous about the future, but we have been pretty clear on our vision. They know it is a great thing for the trade and they all buy into the vision of what we are offering."

Likewise, Mr Calder said the wider trade in Scotland has embraced the move.

Before the deal the two parties already had a fruitful working relationship, with Wallaces serving as a key route to market partner for Tennent's in parts of the country.

"A lot of our customers are enthusiastic about it," Mr Calder said. "They can't wait for it to happen - they see the benefits for their business.

"We're almost there. We'd probably like to be further ahead but we are where we are. These things take time."

This being the pub trade in Scotland, there are challenges on the horizon. In recent years the industry has had to grapple with the smoking ban and continual reform of licensing law. Now it is facing a potential downturn in sales as a result of lower drink drive limit.

Critics have been scathing about the effects on business, with the Scottish Licensed Trade Association declaring it will lead to more pub closures than the smoking ban..

Mr Calder, however, was sanguine about the trade's ability to deal with the new reality. "I think it's a bit early to tell," he said. "To judge it through the quietest trading months of the year when there is a whole lot of other factors at play -the weather, people on health kicks, all the usual January stuff [is hasty].

"My belief is the trade will continue to adapt. You have that worry about what the effect is going to be, but the resilience of the trade and its ability to adapt is what makes the on-trade in Scotland great."

While the industry is on the back foot over drink driving, it is taking a proactive stance on another major issue.

Tennent Caledonian is spearheading calls for an end to the "beer tie" in Scotland - a convention which compels tenants to buy beer from their pub company landlords.

The tie looks set to be scrapped in England and Wales under an amendment to the Small Business, Enterprise and Employment Bill, which will also provide for tenants to be entitled to seek open market rent reviews.

Tennent Caledonian is also supporting moves for a code of practice, based on bringing greater balance to the tenant- pubco relationship, north of the Border. It is currently the subject of a motion lodged by Glasgow MSP Paul Martin, which has garnered cross-party support.

Mr Calder is under no illusion over the boost a similar changes could have on the trade in Scotland, where there estimated to be around 1000 tenanted pubs.

Anecdotally, he said, the proposals are backed by about three quarters of tenants in Scotland, who are currently have to pay up to 50 per cent more for beer compared with open market prices. "I think it is a very important piece of potential legislation," said Mr Calder, noting that positive talks have been held with MSPs. "If we in Scotland are aligned with the England and Wales proposal it will be very important for the tied pub sector. It's an area in Scotland where I think we have to move quickly, because if we have different rules on the tied pubs in Scotland from England and Wales, then international pubcos will move in very quickly and upset what is a very strong on-trade business in Scotland.

"Tied tenants have got a whole lot of disadvantages in a very competitive market. Statistics indicate that in the past couple of years a tied pub is seven times more likely to go under because of some of these restrictions on the tenants.

"Some of these tenants are hardly able to earn a living wage out of their business."

On current trading, Mr Calder said Tennent Caledonian was on track with meeting its internal targets. He cited the strength of its 54-strong sales force, tasked with calling on 6000 customers on a regular basis, as evidence of its determination to be the leading beverage supplier to the licensed trade in Scotland.

While some brewers have moved to cut sales teams, Mr Calder believes having staff in the field is the best strategy. "It's a people business - people buy from people," he said. "Although our model isn't the cheapest to operate, we think it's the one that supports the on-trade best."

These days Tennent Caledonian, which employs about 420 staff, is the jewel in the crown for C&C, notably as its Magners business has found the going tough in the UK.

It has gone from strength to strength as C&C has thrown investment behind its Glasgow business since taking over, maintaining its stronghold in Scotland and growing in markets overseas.

The difference C&C has made is abundantly evident at Wellpark, where in recent years it has installed a bottling line, developed the Tennent's Training Academy, visitor centre and, just last month, facilities to allow companies to entertain clients at the site.

Then there is its joint venture with craft brewer Williams Bros in the Drygate Brewing Company, a microbrewery with bar, restaurant and events space next to Wellpark.

Mr Calder says there is rightly a "lot of noise" around the craft beer sector, but he highlighted that the volume of craft beer sold in Scotland remains comparatively low.

"On a scale of what it delivers in revenue terms, it is a lot of noise for not a lot of volume," Mr Calder said. "It is offering that bigger choice. People are aspirational and they want choice. It's important that publicans can give consumers that choice, and it's important that we as a brand-led wholesaler give our customers that choice."

Other investments by C&C have seen Tennent Caledonian take an equity stake in Maclay Group, and a 50-50 joint venture with Maclay in a pub ownership vehicle. The Thistle Pub Company owns five pubs, including Munro's in Glasgow and Clerk's Bar in Edinburgh.

Maclay went into administration in January but Mr Calder was unable to comment on the process, beyond stating that it was working Ernst & Young to realise the best deal for stakeholders. He also could not comment on whether the brewer would be interesting in buying out the business.

Likewise he was tight-lipped whether Tennent Caledonian would contemplate acquiring pubs in Scotland, in light of C&C's failed overtures to Spirit Pub Company.

"I can't comment on that," he said. "I only that it is evident from here that the parent group have invested heavily in Scotland and strongly support the on-trade in Scotland.

"You can see the improvements that are evident here; investments in Drygate, the Tennent's Training Academy [and] investing in the on-trade with loans and advance of discounts. "They have put a huge amount of investment into the on-trade in Scotland."