Since settling into David Ford’s chair as Chief Executive at Heineken Ireland last year from her former post as Vice President of Human Resources at Heineken USA, Maggie Timoney has had a chance to gather her impressions of today’s Irish licensed trade. She shared these with me recently in her Murphy Brewery offices in Cork.
The Ballina native can see that the trade has battled through a tough six or seven years of recession with a lot of pubs having closed over that time. Personal consumption has been decreasing set against punitive excise increases,she states.
“All this has put a tremendous amount of pressure on what has been the centre of Irish culture, the pub.
“Some, in rural areas, simply couldn’t make it and we’re seeing consolidation in the more urban areas such as Dublin and Cork.
“But I’ve also seen a resilience where publicans from Connemara to Dublin have tried to innovate to survive.”
And she’s seen a resilience here that one wouldn’t necessarily see in the US.
“I’ve visited a lot of Dublin pubs to see a progressiveness where they’re trying to do things differently in food and beer,” she adds.
‘Modularisation’ within the public house is fairly unique to Ireland, again indicating that progressive mindset of trying to attract different walks of life at different times of the day.
Things have certainly changed since she left these shores back in 1985.
She’s noticed, for example, that pubs don’t seem to be the centre of the community as much as they used to be.
“When I grew up, younger people went to hang out in the pub with friends and this is now very different with the trend of at-home consumption,” she says.
In pitting her experience in the US against her understanding of the Irish licensed trade, certain things occur to her.
“We need to do things at a faster pace,” she believes, “In the US, a decision is made quickly and carried out whereas here we talk about things but don’t act as quickly as we could.
“How can we, as an industry, work together (including the LVA and VFI) in a speedier fashion? By working cohesively together in a more proactive way whilst looking out for the interests of the publican.”
Beer market performance
Happily, the on-trade figures for beer sales volumes MAT through June have again been up 1.5% while off-trade sales have been down 3.1% compared to H1 2013.
“Beer sales overall are down 0.3% MAT through June with the market being down 0.8% year-to-date, so the decline is slowing down and it’s great to see the on-trade coming back.”
Nevertheless, she’d like the Government to re-instate the Groceries Order banning below-cost selling.
But despite this, people are coming back into pubs, she believes, because they’re fed up with the recession and the ‘doom and gloom’.
“I’ve also noticed a lot of new cars this year and last, which is another encouraging spending sign.”
On the agenda
Over the next year or two her priorities at Heineken Ireland are primarily to deliver results, she explains.
“My priorities are two-fold: ensuring we continue to grow our core business – the Heineken brand – but also to put innovation higher on our agenda.
“One major priority is to tackle the punitive measures imposed by the Government.”
In this she’s not only wearing her Heineken Ireland MD hat but also that of Chairman of the Alcohol Beverage Federation of Ireland.
“Above all else we need to ensure that we tackle alcohol abuse in Ireland,” she says, “I’m a mother and Heineken is family-owned with family values.
“We don’t want to see people falling down on the streets or families broken up by alcohol abuse.
“As an industry we’ve tried to tackle this ourselves via Drinkaware in which we continue to invest. We can’t turn a blind eye to alcohol abuse but to make progress we need the Government to work with us.”
Instead, among other constraints on licensed trade, Government talks about banning the industry from sponsoring sports.
“A huge amount of funding goes towards sponsoring sporting events, so who’s going to fund that gap?” she asks, “Studies show no link between alcohol abuse and alcohol companies sponsoring sports.”
Apart from that, the industry would give an open-armed welcome to Government-backed and independently-monitored statutory codes around advertising.
“They’re voluntary right now and we all abide by them and are happy to abide by them,” she says.
In the company’s mid-year report, she notes, “It continues to be tough to operate in this declining market”.
Here in her Leitrim Street office she elaborates on that: “The main challenge would have to be the Government tax measures put in place over the last two budgets. I’m not sure why they did that. If it was in the hope that by upping the price they’d lower alcohol abuse, it didn’t work.
“And the increase is also bad for tourism. It’ll lead to a resurgence of cross-border purchasing. Earlier in the year we’d a price difference of 33% tempting people across the border for nappies and alcohol.
“We need to ensure that we protect our indigenous industries and ensure that the Government doesn’t continue to increase such punitive taxes. We need a reversal of excise to protect our pubs.
“The second thing is that so long as the economy continues to recover slowly, it can only be hoped that this pace of recovery will increase.
“We’re seeing a recovery where sales are not as bad as the year before but this recovery is slow and very fragile. We need to ensure that we do the right things to fuel its recovery.
“The good news is that people are beginning to come back into the pubs and from an industry perspective we’ve seen Irish craft beers emerging. This is good news for our category and good news for the industry.
“Innovations such as our launch of Radler low-alcohol beer also help bring people into the segment, providing an option for people who don’t want a 4.3% beer.”
Consulting with the individual publican
As the market continues to polarise between urban and rural, suppliers have found problems servicing individual pubs.
But Heineken Ireland is very much around helping grow the pub, helping grow the overall business of the pub, she claims.
“It’s more of a consulting mindset than just a Heineken Ireland mindset,” she explains, “It’s more about co-operation in attaining business growth.”
She intends that Heineken Ireland will continue that mindset.
“I’ve confidence that it will work out. The pub is part of the fabric of Ireland and of our society. I think if you fast-forward 10 years down the road, the pubs that will flourish will be the pubs that continue to evolve in a progressive way and stay true to the fabric of what the essence of our Irish pub is.”
When she first arrived back here, she was really shocked to discover that the Government simply refused to talk to the industry about combating alcohol abuse.
And she remains nonplussed by this stance.
“I’d love to know why the Government won’t talk to us, what’re they afraid of? We bring a lot to the Irish economy, we want to put a dent in alcohol abuse and we’re perfectly willing to engage with the Government, but they won’t even meet with us!”
To get an answer, she may well have to stop off at Enda Kenny’s constituency office in her home county to pose that question directly to the man himself. After all, her mother is still one of his constituents…..