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Family business CEO: governments should encourage, not crucify us

When Shepherd Neame picked up the annual Coutts Prize for Family Business earlier this month, it was the culmination of over 300 years of history that has tied one family to one industry and one town, writes Marc Smith.

The family-controlled company is the UK's oldest brewer and traces its roots back to the early 1700s when the Shepherd family took over the running of a site in the town of Faversham that has been brewing beer since 1570. Ownership passed over to the Neames in 1876 when the Shepherds sold them their share; it has since gone through five generations of the Neame family.

He should be basking in the glory of the award, but the current CEO, 46-year-old Jonathan Neame, is keen to vent his frustration about how his business and the industry as a whole are being treated. "We are a manufacturing business in a part of the country that has almost zero manufacturing left, we provide the biggest source of employment in the town and we have a very conservative balance sheet.

"We're doing everything that the economy needs and should be encouraged not crucified as the last government did. Of our £110 million turnover, we pay about one third in tax, mainly through excise duty, which is outrageous isn't it?" he asks.

The fifth-generation CEO is suitably exercised because, as he says, such an environment forces the company to constantly drive for efficiencies. This is something, however, that generations of Neames have got used to and a dedication to continually evolving has helped the business to stand tall as the brewing industry has contracted at an alarming speed.

Shepherd Neame is one of fewer than 40 family-controlled breweries remaining throughout the UK and is the sole survivor in its home county of Kent, which counted 60 similar brewers a century ago.

"We took the view that unless we modernised our business and made it very relevant for today's consumer then we would just follow the path of many others and fall by the wayside," says Jonathan.

"Consumer fashions have become materially more competitive in the last 20 years. Everybody is promiscuous in terms of his or her product, outlet and lifestyle choices. We have to fight for every pound that comes up. We're in a fast-moving consumer market so we have to be modern and relevant.

Today, Shepherd Neame is the UK's greenest brewer, has a turnover of £110 million, brews lager under licence and exports to more than 20 countries. Fundamental to the family's business philosophy is taking a long-term, counter-cyclical view.

"Our guiding light has always been to maintain a balance of investment in our business – we believe in both brewing and owning pubs despite the recent trend to ditch producing beer for the retail benefit of owning a pub. But we believe owning both gives us an edge when part of the business is having a hard time, which pubs are definitely having today," he says.

Crucially, the business has not forgotten its family business roots in its effort to modernise. There are 10 family members still working in the business in a variety of roles from Jonathan's father Robert, the company's first president, downwards.

It has a flourishing next generation programme and Jonathan predicts that more family members will want to come and work for the family business. "Hops are very much in our DNA. They are all about East Kent, about the style of our product and about my family," he says.

A full exclusive interview with Jonathan Neame will appear in the next issue of Campden FB magazine. Click here to subscribe.

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