DB Group's cost-cutting drive proved to be false economy

Friday 30th March 2001

By Nick Smith

DB Group last year closed down its renowned PR department and gave the job to a secretary - a move it was regretting yesterday as it counted the cost of the Monteith's debacle.

The brewer has not had dedicated PR staff since last year and the Public Relations Institute (Prinz) says the episode shows companies need to build PR into business decisions.

A massive public backlash to DB's decision to close its West Coast brewery saw the company flip-flop within three days and partially reverse the unpopular move.

Expert opinion varies about how much damage the Monteith's fiasco has caused the DB brand but even full-page advertisements in national newspapers attracted criticism.

"Who on earth signed off this morning's self-congratulatory pat on the back in the middle of an ongoing media crisis? From a communications point of view, DB definitely dropped the ball with this," Prinz Auckland chairwoman Lisa Finucane said.

"One wonders if they are listening to their PR advice?"

But it turns out the company was saving money and not taking any PR advice - or at least none it would talk publicly about.

Nancy McConnell, a solo consultant who has provided DB with PR advice on contract, declined to comment while DB's recently appointed media relations officer Jo Jalfon has no serious PR background; she has worked as a trade journalist on a hospitality industry magazine.

Until last year DB had an active PR department, initially set up by Michele Boag, considered by many to be the industry's most powerful woman - and later run by reputation management specialist Sharon Buckland.

DB managing director Brian Blake said management took responsibility for Monteith's mishandling. "I wouldn't use the word disaster," said Mr Blake. "But from a PR perspective, we got it wrong."

Mr Blake said the company had researched the issue but "we underestimated the importance, tradition and heritage of the West Coast to the Monteith's brand. It was much more important than our research showed.

"We looked at the possible backlash and our worst-case scenario was nowhere near as bad as we received. We failed to see the overall impact."

Insiders, who declined to be named, described the decision to close the brewery as idiotic. They say that the entire Monteith's range was built on the West Coast heritage and the authenticity of the brewery, which features coal-fired open vats.

But former PR expert and beer aficionado, Gordon McLauchlan, defended DB's decision. "I don't subscribe to the belief that DB are ****wits about this, in terms of public relations," said Mr McLauchlan. "I would have advised [DB] to just hold your breath for three months."

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