For Subscribers

Get the complete article now!

TWST: Can we start with an introduction and historical picture of Fuller Smith & Turner (London:FSTA.L)?

Mr. Clarke: Fuller’s is a very old company, formed in 1845 as a partnership between the Fuller, Smith and Turner families, and they ran it as a partnership until 1929 when it became a limited company. The company joined the unquoted securities market in 1982 in the United Kingdom, and then became a member of the main UK stock market in 1996. So we are a fully quoted public company in the UK, but we have a very strong family shareholding. In fact, we have a share structure that gives the family the controlling votes in the business. We have three classes of shares, of which the A shares are quoted, and the B shares, which are unquoted, control the company. But you can invest and buy shares on the stock exchange like any other company, and we follow all the governance, etc. associated with a quoted company.

TWST: What distinguishes the beers that you bring to the market?

Mr. Clarke: We have two parts of the business. The beers we make are known as real ale, which is cask-conditioned beer; it’s traditional British beer which has not been sterilized, it’s put into barrels and served, and has a shelf life of four weeks, which is quite different from the type of lager beers served in the United States and the majority of the United Kingdom for that matter, which have a much longer shelf life, which are much lighter in color, and which of course are sterilized just before they’re put into barrels. Lager beers are therefore inert. Real ale, however, is a living product and as a result it has lots of qualities about it, added taste, but it also has to be treated a lot more carefully than a lager product. We are one of the experts in that area and have been for many years.

TWST: What is the overall strategic direction you’ll be taking in the next couple of years?

Mr. Clarke: Well, the beer-selling business is only a part of our business. And the goal is to maintain that quality and to expand our sales gently. As I said, we don’t want to go from 5% of the market to 95% of the market, because that would destroy our premium approach. But we wish to consistently and gently improve our sales, which we can do through the number of retail chains who exist in the United Kingdom. As you may know, the British market has changed from a dominance by brewers now to a dominance by retailers. We have connections with all the best retailers and we want to go in as one of the beers they wish to stock; not as their base beer at a bottom price, but as their premium beer at a good price. And we are achieving that by a selling approach which is appropriate to what we are aiming for. It’s not hard-sell, it’s soft-sell; we do have a very good reputation, and we are maintaining the price, we’re not discounting our product. Yes, we could get more sales in the short term by discounting, but we don’t go down that route. We’re not the cheapest beer they can buy by a long way, but they have to stock us to offer that extra quality in their bars.