Gunfight at the ALMR conference
My session, subtitled ‘The Good, the Bad and The Ugly’, featured leaders of three industry suppliers — in no particular order: Diageo, Punch Taverns and PPL.
My instructions were clear. I was not to draw explicit comparisons between the men on stage and the characters played by Clint Eastwood, Lee Van Cleef and Eli Wallach in Sergio Leone’s classic spaghetti Western — as tempting as that would be.
Instead, I was to challenge them to say how they are supporting the pub industry and how they are contributing to their customers’ success.
The ALMR counts a number of high-profile suppliers among its membership, and its birthday event invitation encouraged suppliers to attend to network with their operator “friends”.
So are the likes of Diageo, Punch and PPL really your friends, or do you have a less-than-convivial relationship with them?
Martijn Van Buuren, channel director at Diageo, highlighted the investment and resources his company targets at the on-trade. He urged hosts to have confidence in the company’s premium brands and price them accordingly to achieve a strong GP.
Roger Whiteside, CEO of Punch, told the audience of the journey he is leading his company on, how it counts tenant profitability among its key performance indicators, and how it wants to enter into meaningful partnerships with high-quality operators.
Both faced tough questions from ALMR members, and gave a good account of themselves — but were no doubt grateful to be sharing the stage with a ‘bullet magnet’ in the shape of Peter Leathem, the MD of PPL — whose proposed music licence tariff increases have united the industry in dismay and anger.
PPL’s attempts to justify its stance still fail to convince. Leathem should be admired for fronting up to the conference. It was a brave gesture. But until his arguments about why licensees should pay substantially more money for an identical product are more coherent and convincing, it may be a futile effort.
It got me thinking that shared objectives lie at the heart of successful operator/supplier relationships. While some suppliers may have priorities that seem to conflict with the on-trade, for example supply to supermarkets (eg. Diageo) and primary duties to shareholders (eg. Punch), most will find common ground with their customers.
Diageo wants pubs to sell more of its beers, wines and spirits, and at higher prices — and that would be a happy outcome for pubs too. Punch want tenants to earn more (though I’m aware this statement will be controversial in some circles), because that means its pubs are trading well, and it will benefit from a share of greater profits.
But it is hard to see what is mutually beneficial about the relationship between pubs and PPL. This supplier clearly acts exclusively in the interests of its ‘clients’ — musicians and music rights holders. Its website states: “PPL exists to ensure that those who invest their time, talent and money to make recorded music are fairly paid for their work.” No more, no less.
Its duty of care appears to go no further than to those it represents. And until or unless that changes, PPL should be viewed with suspicion and its price-hike proposals strongly resisted.
As one ALMR conference delegate reminded me after the supplier session, the Clint Eastwood film that followed The Good, the Bad and the Ugly was the revenge movie Hang ’Em High.
