Irish Distillers' head raises a glass to new position as IBEC president

Boasting an annual turnover of more than £600 million, pre-tax profits of £50 million and a portfolio of strong international…

Boasting an annual turnover of more than £600 million, pre-tax profits of £50 million and a portfolio of strong international whiskey brands, Irish Distillers is one of the Republic's oldest and most prestigious firms. But its chairman and chief executive, Mr Richard Burrows, acknowledges that the company faces the challenge of translating its dominance on the home market to increasing sales overseas.

Irish Distillers controls only 2 per cent of the world's whiskey market.

The challenge for Mr Burrows is clear: to expand brands like Jameson, Powers Gold Label and Paddy under the circumspect eye of the company's French parent, Pernod Ricard, which measures success in international rather than domestic terms.

He decided recently to add an extra challenge taking on the position of IBEC president at a time when the organisation faces the challenge of remaining a relevant voice for its disparate group of business members.

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But having led a large company like Irish Distillers since 1978 and piloted it through a protracted rationalisation and a bitter takeover battle, such challenges seem manageable.

Mr Burrows says he is aware there are few chief executives of large Irish companies who have lasted as long in the top job. Educated at Wesley College, Co Dublin, he is a chartered accountant by profession and has been working in the drink industry since 1971, when he worked for spirit importers Edward Dillon & Co.

There was no particular reason he began working in the sector and his own family has no background in the industry or Irish Distillers in fact his father was a journalist with The Irish Times.

His first job with Edward Dillon & Co helped him learn about all aspects of the drinks business within a very short period. He remembers those days with fondness, but is glad the country is now more progressive and less austere.

"The increase in prosperity has been the great change between now and then, we have all come a long way and it is great to see the self-confidence of Irish people now," he says.

He admits this does not mean everyone automatically toasts the Celtic Tiger with a whiskey tumbler in hand. "The connection between increased economic prosperity and whiskey drinking is a tenuous one at best," he says.

Hairshirt budgets throughout the late 1970s and early 1980s not only made whiskey expensive, but partly darkened its image. "Throughout the 1970s as I was working in the industry, I saw whiskey being hit in budget after budget and it made our job very difficult."

His annoyance at these measures is partly prompted by the fact that this was the period when the industry had a chance to expand, as more women started drinking spirits.

He remembers the mid-1960s when women in pubs were a rarity and drinking whiskey or vodka was perceived as being unladylike. While women are now a viable group to target commercially for spirit companies, the younger section of the population remains elusive, he says.

But even here he is confident. "If we can introduce people to the product in the right environment they become interested," he states. In an effort to do this, Irish Distillers regularly runs tastings for people who are not normally spirit drinkers.

Things were a lot different when he took over the company in 1978 from Mr Kevin McCourt who radically changed Irish Distillers, but had yet to develop a serious export strategy.

"We were all aware at that stage that if we did not begin a serious export drive we would vanish," he recalls.

He set about this task and the equally difficult one of reducing the company's cost base which was large in comparison to its larger, but leaner international competitors.

"We needed capital investment in our warehouses and bottling plants and we had things like three cooperages which we just could not afford to run at that stage," he says.

While reducing the workforce from 1,400 to 600 made him unpopular in some quarters, the lengthy period over which the redundancies took place sugared the pill a little, although there were tense and bleak days in 1987 when the largest number of employees were let go.

The company was convulsed by that process. But the takeover battle which engulfed the firm in 1988 was no less dramatic. Involving a large cast of prominent characters in Irish business, the hostile bid from the Grand Metropolitan-controlled GC&C group started one of the toughest takeover battles seen in Irish corporate history.

Looking back, Mr Burrows remains satisfied the company made the right decision in nailing its colours to the mast of Pernod Ricard which launched a friendly counter-bid and eventually won. His abiding memory of the period is being locked in offices for hours with "armies of lawyers and accountants".

"I think our relationship with Pernod Ricard since then has shown we made the right decision to reject the advances from Grand Met and others," he says. He is prepared to put it in even stronger terms. "If we had been taken over by the GC&C group, then we probably would not be here now," he says.

He adds that Pernod Ricard operate a decentralised structure which suits Irish Distillers and that sales targets are not dictated to the Irish company by Pernod Ricard, but agreed with them.

The parent company's apparently benign attitude to Irish Distillers is easy to understand when one considers that sales of Jameson exceeded one million cases for the first time last year. This sales growth was the fastest in the international drinks industry in 1997. Mr Burrows hopes a £20 million worldwide advertising and promotional campaign makes it sustainable.

He says the alliance with Pernod Ricard means Irish Distillers can use the French company's extensive worldwide distribution network to good effect.

"We are confident that once we are able to get our product to people, its quality will take over from there," he says.

He describes his own management style simply. "I generally explain to people what I want and then let them get on with it." He likes to work in teams and says the size of the global whiskey market means there is no danger of managers fishing out of the same pool.

The company recently found itself in the news for making donations to all the main political parties. Mr Burrows, despite current controversies, is up-front about the issue and defends the donations vehemently.

"We as a company feel strongly that it is right political parties are adequately funded and we do not see anything wrong with that."

He is equally matter of fact about the future of IBEC, the employers' organisation, of which he is now president.

"There is a commonality of interest between what IBEC wants and what is good for the economy," he says.

He rejects the charge that IBEC is controlled by a cabal of senior directors from the large plcs and the semi-states. "Look at IBEC national executive for example, there is an equal spread of small and large firms involved," he states.

He adds that commercial rivalries between IBEC's member companies are not a serious problem. "While companies may be in competition at times, the health of the economy and the business climate generally are something everybody is concerned with and that is where IBEC comes in."

When asked why he has decided to succeed CRH chairman, Mr Tony Barry, as president, he says it is because he believes firmly in companies participating in their communities. "Pernod Ricard encourage their subsidiaries to get involved in their local economy and we agree with that," he says.

During his two years in office, he will be calling upon his large network of friends and contacts, many of them established while pursuing his lifetime passion sailing.

As a member of Howth Yacht Club and chairman of the Irish Sailing Olympic Committee he finds himself on a yacht most weekends. He says the appeal of the sport is the "infinite variety", involving both changeable seas and weather.

This variety, he says, is what he also likes about business and possibly referring to both activities, he says he has "yet to fall in the water".