Comment - Beer - Remembering Graham Mackay
SABMiller's Graham Mackay, who passed away last month
Last month, the chairman and former CEO of SABMiller, Graham Mackay, passed away. Ahead of a memorial service in London later this week, Larry Nelson looks back at an extraordinary career.
I first met Graham Mackay on a dismal, grey November afternoon in central London. He was in town in the wake of South African Breweries’ listing on the London Stock Exchange, drumming up interest in this then-relatively unknown emergent in the international brewing scene, conducting a series of one-to-one interviews with journalists.
He made a memorable first impression. Unlike other captains of industry, who would smile and seek in some fashion to charm, imposing their energetic personalities, Graham ran against type. He was decidedly quiet and soft-spoken, his answers measured and thoughtful.
This was in 1999, just after SAB acquired a controlling stake in Radegast and Plzensky Prazdroj in the Czech Republic, marking the first time in the 100-plus years of its existence that more of the company's beer was brewed outside of South Africa than at home. Total volumes were then around 56m hectolitres and, with operations in 21 countries, SAB was no slouch. Those modest numbers by today’s standards were sufficient to rank it amongst the top ten global brewers – yet with no guarantee that the firm would remain in the running in a consolidating market.
Think back 15 years ago - a relatively short period by most measures yet a lifetime ago in brewing industry consolidation. It was conceivable then that any number of brewers with strong presences in a handful of markets could emerge as head of the class. Carlsberg, Heineken, AmBev (pre-Interbrew), Interbrew itself, Scottish & Newcastle, Asahi, Kirin, Coors, Miller, Molson, Foster’s Group, Diageo/Guinness – even the fatally flawed Anheuser-Busch – all had an opportunity to rule the world.
Yet, it was Mackay and his team of South African execs who pushed through, making good on their ambitions. Starting with under-invested assets in Eastern Europe and partnering in China, the subsequent transformational deal was undoubtedly the acquisition of Miller in 2002. There followed expansion into Western Europe and Latin America, a reshaping of the US market by partnering Miller with what was then an independent Coors, and positioning for hoped-for growth in India, partnerships in Africa with Castel and Turkey and Russia with Efes. Lastly, there was the 2011 acquisition of Foster’s in Australia, a deal that went against the SABMiller norm in that it had more of a feel that it was made for defensive reasons rather than for growth potential.
Asked in a Brewers’ Guardian interview in 2008 if all of this had been foreseen back in 1999, how the future might unfold and whether it included a robust SAB, Graham replied: “I think in conceptual terms what we’ve accomplished between then and now is broadly what we set out to accomplish, but that doesn’t mean that I or anyone else could have foreseen how the consolidation of the world’s beer industry was going to turn out.
“In principle, what we were trying to do when we moved our domicile and primary listing to London was to get into and then remain in the top tier of consolidators, in the belief that if what was done prudently that there would be value to be gained from it. And, I think, at that sort of level, what has happened has exactly borne that out.”
Later encounters with Graham ran to form. He was never heard to raise his voice, the tone remained measured. He could be sparked by an idea that suggested the questioner had some insight into SABMiller’s business or the industry generally and was kind in offering considered answers.
Conversely, to the undoubted chagrin of a communications team who sought not to actively antagonise journalists, he could also quietly convey deserved disdain for those who hadn’t done their homework or who posed questions with answers that were self-evident.
At the outset of 2008, in the same interview, Graham was asked if he had accomplished what he had set out to do or if he harboured further ambitions.
“There’s never an end to history,” he said. “I’m not dissatisfied with our progress to date; I think we’ve done okay. But there’s no sense of, if I would retire tomorrow, I would say, ‘That’s the end of it now. Somebody else must just run the show.’ Absolutely not. I think a lot can be done by myself or other people.”
He did point to SABMiller’s talent throughout the organisational and its considerable operational capabilities as “a sustained tour de force”. If this hadn’t been achieved, indeed sustained, then little in the way of the famed M&A activity would have been possible. Everyone wants to work alongside, partner with, a winner.
Yet – we’ve done okay? A modest reply, certainly, and, when challenged that results-to-date suggested a more generous appraisal, he demurred, saying, “I’d rather leave that to other commentators.”
Let the historians posit, then, that Graham Mackay did more than perhaps anyone to transform the international brewing industry. He and the SABMiller team have demonstrated a remarkable ability to broker a deal, to partner with other players. Their model differs from their competitors in that there are considerably more partnerships in place – with Molson Coors in the US, China Resources Enterprise in China, Castel across sub-Saharan Africa and latterly Anadolu Efes in Russia – that suggest an ability to be trusted and to expect the same in return.
There are risks entailed here – a shared house is never an easy thing to manage. It now falls to Alan Clark and the tried-and-tested senior management of SABMiller to sustain the multinational’s remarkable ascendancy atop the global brewing industry rankings.
Graham Mackay is to be honoured this week by his family, friends and colleagues at a memorial service in London. He’ll be missed and remembered fondly by all who were fortunate enough to come into contact with his intelligence and quiet warmth over the years. The world is a poorer place for his passing.
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