Tapping Profits

Because beer-quaffing Britons loyally support some 300 breweries, 3,000 brands of suds and 70,000 local pubs, economists have long classed the national beverage as a "depression-proof" staple. This being the case, big brewers have run their businesses with all the imagination of the National Coal Board.

That sort of thing may be changing. For one, Chairman Douglas Peter Grossman, of Watney-Mann, Britain's No. 2 brewery (behind Allied Breweries), argues that the industry is hopelessly "straitjacketed" by outdated production and marketing methods. For himself and his company, Grossman has introduced radical changes in Watney's all-too-quaint pubs, launched into discotheques at home, capitalized on the growing popularity of English-style pubs abroad. The innovations have tapped surging profits: while most of the industry is as tepid as its brew, Watney's last month reported a 19% jump in earnings for the first half of fiscal 1967, to $15 million.

One reason for Grossman's crusade is that Watney-Mann's 1966 performance was small beer: profits slipped by $2.4 million, to $20.2 million. The government's severe deflationary measures did much of the damage. Among other things, Britain's brewers were hit from one side with a 10% surtax on the retail price of their beer, which has already been taxed at about 50%.

Tip for Tap. Unable to do much about the freeze, Grossman began hacking away at the costly cobwebs the company inherited when it was formed nine years ago by a merger of two of Britain's oldest brewers. Streamlining Watney's chain of 6,650 company-owned pubs, he shut down those serving only 100 or so regular tipplers, opened new ones in more populous areas. Crossman has also converted many pubs into "Schooner Inns," which serve $1.40 steak dinners and sell a "terrific amount of liquor."

Angling for the youth market, Watney's experimented with a swinging "discotheque pub" in London called the Bull Sheen in 1966. Since then, the company has opened six more, plans to set up others. And Grossman has found a ready market for the English pub--dart-board, half-pint mugs, Watney-Mann beer and all--overseas. Duesseldorfs Victoria was opened last week in a sort of tip-for-tap deal with local owners (Watney's supplies advice on "authentic" details, the pubs buy Watney-Mann's beer); more of them are planned for Madrid, Florence and other cities.

Next stop is the U.S., where Watney-Mann plans to get the first of a chain of franchised pubs in operation this year. This time Watney's will look upon its move as more of a comeback than an invasion, since Grossman claims that the sands of the Old West are still laced with British beer bottles left over from frontier days.

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