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British brands abroad

Ian Sclater is a freelance journalist based in Scotland.

Many British brands have been acquired by large, foreign family-owned conglomerates. How do they manage to retain the quintessential British qualities so important to their image?

The Rolls-Royce Motor Cars company has a German driver, BMW. The exclusive Thomas Pink clothing company fits its French owners, the LVMH group. Some of Britain's best known breweries have been lapped up by Belgians (Interbrew) and Americans (Coors).

Some of the UK's most iconic brand names are in the hands of family-owned overseas businesses. That their 'foreign' ownership may not be common knowledge to many British consumers and their continued acknowledgement as quintessentially British brands may itself be a testament to their owners' success in retaining the brands' inherited values of 'Britishness'.

Bass ale
When the Belgian beer giant Interbrew bought British brewers Bass (for UK£2.3 billion) and Whitbread (£400 million) within a month of each other in 2000, it sparked fears among many of Britain's beer-drinkers that the internationalisation of the brands might affect taste and choice.

Although, the theory went, Interbrew had shown respect for its own Belgian beer styles, and even produced a few world-class brews, it also had some supremely bland, mass-market products. Would its quest for world domination be at the expense of some the unique characteristics of its new acquisitions?

To allay fears, Interbrew took to referring to itself as 'the world's local brewer' and invited members of the UK's Campaign for Real Ale (CAMRA) to an urgent meeting to reassure them of the company's high value of Britain's beer heritage. Interbrew's British CE Hugo Powell said: "Beer is a local business, therefore our local strengths, local brands and local people will be the key to success."

Interbrew is not, however, a cuddly family brewer run by benign sentimentalists. The company is controlled by three secretive Belgian families – de Spoelberch, Van Damme and de Mevius – who, despite the company's Brussels flotation, between them still own 65% of the company. The board is populated by several key family members, led by Baron Frédéric de Mevius, and while they have taken a less hands-on role since Hugo Powell took the helm in 1999, they inevitably remain a powerful voice within the company.

Bass and Whitbread were integrated and renamed Interbrew UK. In the process Interbrew took control of one-third of Britain's brewing industry and transformed it from a national one into a global one.

Dating its origins back to 1366, Interbrew now owns nearly 200 beers worldwide, including such powerhouse global brands as Stella Artois and Beck's, speciality brews like Hoegaarden and Leffe and iconic national brands like Staropramen of Prague.

For the most part, the attempts to strike a balance between national and international branding and local products have worked. The company was careful to retain Bass ale's famous red triangle logo, which was painted by Edouard Manet in 1882 in 'Un bar aux Folies Bergeres'.

Carling
Anxieties about British brewing standards were also raised when the Adolph Coors Company, the giant American brewer, purchased the UK's leading lager brand, Carling, from Interbrew in February 2002.

Most beer aficionados would place Coors high on the list of all-time taste-free beers, and the prospect of the boys from Golden, Colorado getting their hands on Carling filled many a lager-lover with dread.

They needn't have worried. Says Paul Hegarty, external communications manager for Coors Brewers Limited: "The Americans have been incredibly hands-off. They have said, 'You are running a successful business, and we don't want to interfere'. We get some broad strategic steers from the US, but our brand management process is run out of the UK by the people who were doing it beforehand."

Hegarty adds that Coors wanted to grow their business but at the same time be less dependent on a single brand and one beer market. Rather than divesting a lot of US management time into running the UK company, they sought to bring more talent into an already profitable business, which was available at the right price at the right time.

Founded in 1873, the family-owned Coors Brewing Company is the third largest brewer in the United States and the world's number eight. All the Class A (voting) shares are owned by the Coors family, who also own a significant portion (about 30%) of the Class B, non-voting shares.

In explaining the acquisition of Carling, chairman Peter H Coors said: "The deal represents a strategic opportunity for Coors to participate in one of the world's largest beer markets with an already successful business platform, including Carling's proven management and employee team and an existing supply chain. We intend to leverage the strengths of both organisations to grow market share, profitability and cash flow."

The company also said that the combined assets and talents of the two companies would make it a more diversified and competitive player in the global beer business. The company's European subsidiary and producers of Carling, Coors Brewers Limited, is now the second largest brewer in the UK and represents about 29% of the overall Coors volume.

Jaguar
Ford family members have a long history of power struggles with executives, starting with Henry Ford himself. So there was little surprise when CEO William ("Bill") Clay Ford, Jr, great-grandson of the founder and the family's leading representative, recently took a more personal, active interest in the company's archetypal British car, Jaguar.

Now in its 100th year, Ford is still about 40% family-owned. When it acquired Jaguar in 1989 in a hostile takeover, it paid US$4.07 billion for the privilege. Three years later, Jaguar was losing $1 million a day.

Bought as a vehicle to take Ford upmarket, instead Jaguar almost came to a grinding halt. Recession in Britain and the expansion in the US of Japanese luxury brands like Lexus and Infiniti might have driven it off the road completely were it not for Ford's patience and deep pockets. Today, Jaguar is back on track and competing effectively with the likes of Mercedes and BMW.

Chris MacGowan, then chief executive of the UK's Retail Motor Industry Federation, said: "There was so much shouting when Jaguar was sold, but it has been transformed. Ford is good at recognising the strengths of a brand name. The Jaguar quality and message are there. They have enhanced it."

Long-time Ford executive Nicholas Scheele steered Jaguar's comeback with some good, old-fashioned American know-how. He imported Ford's Quality One programme, which involves workers in redesigning the production process to stamp out defects, and slashed the bloated workforce in half.

As a result, from ranking 35th out of 36 in JD Power & Associates' 1991 quality survey, Jaguar is now in the top five with Lexus, Infiniti, BMW and Acura, and sales have surged with quality.

Ford also owns another symbolically British car, the Aston Martin, and while James Bond traded his in for a BMW roadster for a spell, Aston also looks to be shifting into high gear.

Purdey and Dunhill
James Purdey founded his gun-making company in London in 1814, and within 10 years, during which time he was involved in the early development of the revolutionary percussion cap, he was recognised as London's pre-eminent maker of bespoke sporting guns.

As firing mechanisms quickly developed in the middle decades of the 19th century, Purdey became established as one of the world's innovators, and a distinguished flow of international customers came to be 'measured' for their new guns and rifles in the famous Purdey Long Room at 57 South Audley Street, surrounded by photographs of famous fellow purchasers and within short range of the ledgers detailing the specifications of every Purdey built since the 1820s.

Today, Purdey's has added shooting clothing and accessories to its range and is one of only two London gun-makers to operate its own factory and apprenticeship programme. A single, custom-made gun can cost up to £65,000 and a rifle up to £75,000. Royal warrants have been bestowed on the company by each successive British monarch since QueenVictoria.

It is a few minutes walk from Purdey's in St James's to Mayfair, where at 48 Jermyn Street can be found the showroom of another of Britain's best known luxury brands – this one founded by a German.

When Alfred Dunhill established his first London shop, he declared: "If one can exactly meet the desires of a good class of public, time alone is necessary to make the business profitable. Compared with quality, price is relatively unimportant."

With flagship stores in London and New York, Dunhill has now been providing 'mature' men with classic, ready-to-wear items, leather goods and accessories since 1902.

Starting with 'Motorities' for the car enthusiast and 'Avorities' for the 'aeroplanist', the company has counted among its life-long customers everyone from the Duke of Windsor and Pablo Picasso to Rudolf Valentino and Elvis Presley. Explorer Sir Ranulph Fiennes even took a Dunhill lighter, perhaps the company's best known product, to theArctic Circleto test it in temperatures as low as minus 50° Centigrade. Today Dunhill's in-house design team continues to offer a bespoke service to the most discerning clientele.

Both James Purdey & Sons and Dunhill are now owned by one of the world's biggest family-owned businesses and a leading luxury goods group. Encompassing some of the most prestigious names in the industry, from Cartier (jewellery), Piaget and Baume et Marcier (watches) to Montblanc (writing instruments), Chloe and Jaeger-LeCoultre (clothing), Richemont is owned by the Ruperts of South Africa, second only to the Oppenheimers of De Beers Diamonds fame in that country's wealth stakes. The Ruperts also control Rembgro (formerly the Rembrandt Group), which has diverse financial, mining and industrial interests as well as owning a sizeable stake in British American Tobacco (BAT), the world's second largest tobacco manufacturer after Philip Morris.

The Rupert family patriarch Anton grew his business interests from humble beginnings to become one of South Africa's most successful entrepreneurs. While still a chemistry lecturer, he started making cigarettes in his garage before buying the small tobacco company Rembrandt in 1952 and introducing the world's first king-size cigarette.

Rembrandt grew into a major conglomerate, and Anton went on to oversee the company's transition into the luxury goods market, in which it is the world's no. 2 group behind LVMH of France.

Anton Rupert is also heavily involved in environmental conservation. He is the president of the World Wide Fund for Nature of South Africa and co-founder of the Peace Parks Foundation with Prince Bernhard of the Netherlands and Nelson Mandela.

A noted humanitarian, he once stated: "It is debatable for a large segment of humanity whether they enjoy a better quality of life than was the case a thousand years ago. One has only to think of the massive tragedies in places such as Ethiopia and Kosovo to know this may not be the case."

Richemont's executive chairman and Anton Rupert's eldest son, Johann (53), studied economics and company law inSouth Africabefore embarking on his extensive career in international business and finance. After working for Chase Manhattan bank in New York and serving on the boards of Rothmans International and BAT, and as executive chairman of Rand Merchant Bank, he became group CE of Richemont on its formation in 1988 and assumed his current position in September 2002.

Johann's cousin Jan (48) is a graduate in mechanical engineering. After a career in production management in both the tobacco and watchmaking industries, he is Richemont's manufacturing director in charge of the group's overall manufacturing strategy.

The family suffered a personal tragedy in 2001 when youngest son Anthonij died in a car accident at the age of 49. At the time of his death he was running Rupert & Rothschild Vignerons, the wine-making partnership between the Rupert and Rothschild families.

In recent years, Richemont has lost some of its lustre, as earnings in the luxury goods market have waned. The company recently reported a 53% slump in net profits – worse than its own predictions – and has lost 46% of its value in just over a year. It is currently worth an estimated $4.6 billion. Of Richemont's total sales, 43% are to Europe and Asia, with Japan the largest single market. Only 19% are to the Americas.

However, the Ruperts are well known to financial analysts for their conservatism and long-term thinking – Johann has been dubbed by stock market wags "Rupert the Bear" – and they seem prepared to wait for signs of a recovery in the demand for luxury goods.

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