Working for a family-run business can present an interesting set of
challenges. But working for a 300-year-old family-run business with a group
turnover of £180m, assets of £70m, 280 employees and a client-base that boasts
royalty, along with some of Britain’s wealthiest families, is a whole different
It is exactly the position that Hugh Sturges, finance director of renowned
wine importer and dealer Berry Bros & Rudd, finds himself.
‘The advantages outweigh the disadvantages, in my opinion, certainly from a
finance director’s point of view because you don’t have all the red tape, admin,
Sarbanes-Oxley and all the rest that you have to comply with,’ says Sturges.
Private companies tend to take a longer-term view than most public companies,
he says, because short-term shareholder value is not an issue. ‘The
disadvantages, if there are any, is that you have to deal with issues on a
personal, rather than a corporate level, so you sometimes have to be a diplomat
as well as a finance man,’ he says.
The 47-year-old Sturges began his career at KPMG, referring to his statutory
two-year period at the Big Four firm as ‘rather dull’. From there he joined
Bacardi in Bermuda, which introduced him to the world of spirits. Following a
brief stint in forestry and almost 10 years at MoDo Merchants Limited, he joined
Berry Bros & Rudd in February 2001. ‘I’m a relatively new boy compared to
most of the staff in this company,’ he concedes.
While a privately held family business, around 12 years ago Berry Bros &
Rudd chose to employ a professional management team to run the commercial side
of the business. It proved to be a wise decision, because the company has gone
from strength to strength in what has become a hugely competitive market.
Along with the original St. James’s-based store, which was first opened in
the late 17th century, Berry Bros & Rudd now has stores in three of the four
Heathrow terminals, as well as operations in Ireland, Hong Kong, Greece and
The St James Street shop is a throwback to ancient times, with oak-panelled
walls, uneven floorboards and cellars filled with dust-covered bottles of fine
While the business is run by a professional management team, the chairmanship
remains in the family, with Simon Berry currently occupying the hot seat. ‘The
key thing here is values. Money is not the top thing on their list. You have to
make a profit, obviously, but the image and reputation of Berry Bros is very
important,’ says Sturges.
Despite this, Sturges could not rule out the possibility of taking the
business public. ‘Never say never, but one of the key drivers of the family is
to keep it as a family business.’
The simple fact is that Berry Bros & Rudd does not need the money a
public offering would provide. It has long-term security in the guise of some of
central London’s most prized real estate. ‘We have quite a lot of property round
here,’ he says, referring to the shop, a square it backs onto and the first few
buildings on Pall Mall.
But on top of a hugely successful fine wine business, and the long-term
security that owning central London property offers, the golden egg in Berry’s
basket is whisky through its ownership of the hugely successful brand, Cutty
In fact, the very room in which the interview takes place is where the
original Cutty Sark scotch came about in 1923. The success of the whisky allows
Berry Bros to take more risks than its competitors and puts it at something of
an advantage, according to Sturges.
‘It’s important to know that Berry Bros is not just a wine business, but that
it’s the owner of Cutty Sark as well, which is where the wealth of the company
has come from,’ he says. ‘That was invented here in this room in 1923 and grew
to become the biggest Scotch in the States back in the seventies. It’s still the
10th biggest in value terms in the world.
‘It gives us an advantage because we can afford to take more risks than most
of our competition, outside J&B, which is of course owned by Diageo.’
Those risks, at least more recently, have been ideas dreamt up by chairman
Simon Berry. ‘He is a very creative individual. He was responsible for
investigating the possibilities of going into Heathrow. We’re lucky because he
sits back and thinks “blue sky”. And some of his ideas are very good,’ says
A privately run business with a visionary at its heart is an ideal scenario
for entrepreneurialism, according to Sturges, and the lack of red tape and
corporate governance has only helped Berry Bros grow.
‘Naturally the principles of corporate governance would certainly stand firm
for the private as well as the public company, but the rules are far fewer, so
we pick and choose the ones we want to follow,’ he says.
While he’s convinced that good corporate governance procedures can benefit
any business, he is certain it would ‘grind the business to a halt’ if it had to
adopt all the same measures as publicly listed companies. ‘I have a suspicion
that’s happening in smaller companies,’ he says.
One potential growth area for Berry Bros could be the relaxation of the SIPS
pensions rule, which will allow a wide variety of investments to be included in
pension funds, including fine wines.
It wasn’t so long ago that dealers found themselves selling fine wines to
City firms, who would then pass them onto their employees as tax-efficient
bonuses. And while that particular scheme was stopped, it appears another avenue
has been made available.
‘There is the SIPS pension rules that begin from 2006, which do open up that
possibility again – not for bonuses but for people that want to put wine into
their pension funds,’ says Sturges. ‘So that is a good opportunity for us and we
need to work with financial advisers to set up funds that may include wine. We
would be foolish to sit back and not investigate any opportunities that might
come from that.’
It is just one of several opportunities available for Berry Bros & Rudd.
One of Sturges’ priorities, however, is to grow the wine side of the business.
Although the company’s turnover is approaching £200m, wine only makes up a
quarter of that, with Cutty Sark and property playing a big role.
‘One of my main drives is to improve the profitability of the wine business,’
One thing is clear – he won’t be looking to IT for any help. ‘I think that IT
is a bane on everybody’s life,’ he says. ‘We couldn’t live without it, but it
causes immense amounts of problems everywhere I’ve ever worked, and it’s not
just me. I think that IT suppliers over-promise and under-deliver, as a general
rule. If I’ve had any sleepless nights in my career, it’s largely been over IT.’
The client list of Berry Bros reads, as you would expect, like a who’s who of
UK high society, but over recent years it has expanded. ‘In the old days perhaps
it was a very southeast, rural, aristocracy-based business but nowadays they
will be in the minority,’ says Sturges.
‘Part of what we do is encourage people and educate people as to why they
should be drinking that wine rather than the stuff you can get in the
supermarkets. So all our staff are wine bores.’
And when Berry Brother’s & Rudd’s basic fine claret comes in at just over
five quid, there is no reason why you shouldn’t.
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