Days of wine and art appreciation

By IRENE CHAPPLE

The outgoing chief executive of Lion Nathan, ebullient Scotsman Gordon Cairns, flinches at the thought that the company's foray into wine will be his legacy.

"I think it would be immodest of me to try and write my epitaph, but if was only wine I think people would forget me very quickly," said Cairns from Australia last week.

But a look back over newspaper articles of recent years shows that Cairns' gritty determination to enter the wine market has dominated the headlines.

He battled ferociously, if unsuccessfully, for full ownership of Montana - a takeover bid that was finally foiled by British competitor Allied Domecq after months of legal manoeuvring.

But Cairns' appetite for wine was undiminished and the company now owns, according to its website, seven Australian wineries, one in New Zealand (Wither Hills in Marlborough) and one in Oregon, in the United States.

"I might like to be remembered by the good as well as the bad," Cairns said. "The wine results are disappointing ... I don't have any regrets about going into wine but I'll have some regrets if the results don't improve."

Back in 2001, when Lion Nathan was bidding for Australian companies Banksia Wines and Petaluma, analysts warned the brewer was paying too much for the wine assets.

"I think we probably got our timing all wrong," Cairns said in hindsight. "We probably bought at the peak of the market."

The wine division suffered a massive drop in earnings through 2002 and last year, but is tracking as expected this year.

The company's foray into China, where it previously struggled, is also producing signs of a turnaround, breaking even for the past half-year and expected to break even for this full year.

And after years of falling sales, last year's growth in the beer market came as a relief.

But Cairns said he would rather be remembered for "doing a hell of a good job improving the value of shares for the shareholder".

Since he took over in 1997, Lion Nathan has increased the value of its shares from just over $3 to almost $6. A high of $6.14 in January was double the price of August 1997, when it sat at $3.29.

The company said it was on track to produce a net profit of between A$195 million ($225.7 million) and A$200 million for the full year to November.

"If, at the end of the day, people thought I'd done a reasonable job, that's probably a fair reward," said Cairns.

He reckoned one of the first jobs for his successor, former Nestle Oceania head Rob Murray, would be to rid the corporate offices of Cairns' most infamous choice of artwork.

"We've got a painting in head office that I adore and everybody else detests. It's got a homeless man without any clothes on.

"They might hate it so much they will give it to me as a farewell present."

Beyond Lion Nathan, Cairns has agreed to another non-executive role but said it was too early to name the company. He is also on the board of Opera Australia.

"Art," said Cairns, "is good for people's souls. It makes them think and it reminds them of their humanity."