Academic journal article Journal of the Australian and New Zealand Academy of Management

The Monteith's Affair: Bitter to the Loyal End?

Academic journal article Journal of the Australian and New Zealand Academy of Management

The Monteith's Affair: Bitter to the Loyal End?

Article excerpt

ABSTRACT

"I feel shattered. My soul aches. My stomach is queasy. My heart is in tatters.

Yours in total despair."

Daniel O'Reagan (2001).1

This case revolves around what would normally have been a seemingly straightforward business decision. Instead, the events surrounding the reported closing of the Monteith's Brewery came to capture the New Zealand public's imagination and attention. Over a period of weeks in March 2001, it soon became clear that there was more at stake than simply the survival of a local brewery.2 The "Monteith's Affair," as we shall call it, was to become the site, and catalyst, for an extensive discussion concerning the intersection of 'good' business practice, community and globalisation.3

In this moment, DB (Dominion Breweries) came to be seen not as the purveyor of 'the working man's brew', but as a bunch of "Dumb Bastards."4Far from simply being accepted as a 'common sense' business decision, closing the Monteith's plant came to be regarded as "the latest in a string of stupid decisions by greedy, arrogant overseas-owned corporations putting profit ahead of their staff and local communities" (Greymouth Evening Star 23 Mar. 2001, p. 1).5 DB had unexpectedly found themselves at the centre of a wide-ranging public debate, in response to which they were forced to review their original decision.

In the beginning, it was 'just' an economically rational decision on the part of DB to transfer production from its brewery in Greymouth on the South Island's West Coast to its Waitemata Brewery in Auckland. After completing a "comprehensive review of its brewing options across its four breweries," DB had found "that the cost of sustaining production at the West Coast brewery was no longer viable" (Dominion Breweries 2001). Brian Blake, DB Group Managing Director, explained that DB had been forced to make the "difficult decision" to close the West Coast brewery by the need to utilise its existing capacity at the Waitemata plant (ibid). No longer, it seemed, would the famous Monteith's brand be brewed in its spiritual home on the West Coast.

Ironically, unlike in the 1990's when declining sales threatened the brewery's future, DB's decision to close the brewery was not made on the basis of poor brand performance. Rather, as many commentators dryly noted, Monteith's was a victim of its own success. DB's decision was justified, argued Blake, because the increasing popularity of the Monteith's family of premium craft beers had meant that beer volume has surged 250% since 1995. Subsequently the West Coast brewery had been running at maximum capacity and "to meet continued levels of production the brewery would have to undergo a significant and costly upgrade." The investment required, he explained, to upgrade brewing capacity and the packaging plant was "just not commercially viable." What's more, manufacturing out of Auckland would provide important logistical advantages for the "next challenge - to develop export opportunities in selected markets through the South Pacific and Asia" (New Zealand Brewer's Network 2001). However, Coasters in particular, and beer consumers in general, were quickly assured by DB that the change in brewing location would still see "the distinct character" of the Monteith's brand sustained (ibid).

The West Coast community's response was swift. Reaction quickly moved from a position of resigned cynicism, to one of action geared to challenging the 'bean counters' in Auckland (the quintessential dumb bastards) who pursue profit over people. This desire for action soon manifested into a boycott of DB products with the announcement that "we've gone off their beer here."6 Less than 12 hours after DB announced its decision, a consumer boycott organised by former Coasters, photographer Peter Bush, and PR man Gerry Morris was underway. Dismayed at what DB was doing, and the situation on the Coast in general, Morris thought that he could give some of his mates a helping hand by "organising a strategy and a few tactics" (Evening Post 28 Mar. …

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