The corporate raider of Cooley

The corporate raider of Cooley

Charles Maclean meets the chairman of Ireland's newest distillery, Cooley, and finds that his story can only be told in epic form

People | 13 May 1999 | Issue 3 | By Charles MacLean

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Did you see my brown bull, when you were up at the distillery?’ asks John
Teeling, chairman of Cooley Distillery.‘I did’, I replied. ‘What’s its significance?’‘The Bull of Cooley; The Donn Cualnge.’
The penny dropped. Until then I had had no idea that theTain Bo Cualnge, ‘The Cattle-Raid of Cooley’, which forms the centrepiece of the Dark Age epic known as ‘The Ulster Cycle’ took place in the hills behind the distillery. The super-hero of the saga is Cuchulainn, ‘The Hound of Ulster’ who resists the invading armies of Connaught single handed. Listening to John Teeling, the man who brought the bull back to Cooley, I could not but think of him as a latter-day, corporate Cuchulainn.‘...and he told the men of Ireland to be on their guard, for there would come upon them he who was the slashing lion and the doom of enemies and the foe of armies, the supporting leader and the slaughtering of a great host, the hand bestowing gifts and the flaming torch, to wit, Cuchulainn the son of Sualtaim.’The comparison is made more perfect by Teeling’s choice of corporate weapons: ‘the pickaxe and the flame-thrower’. ‘Perfect pickaxe and flame-thrower territory’, is how he describes Irish Distillers back in 1987, when he tried to take it over. ‘The company was in chaos,’ he says. ‘Poorly managed, over-manned, too many administrators, hopeless track record – especially in export markets. I encouraged three of my students to write theses on the takeover and break-up of the company. I raised US$24m million privately, and had the backing of Merrill Lynch who offered to put up $176m in junk bonds; I was confident I could raise the balance of $24m. ‘But then I thought: ‘There is no way the government will countenance so dramatic a tampering with a national jewel, as they considered the whiskey industry. So I did nothing. Next year a strategic 20 per cent shareholding held by Seagram’s was sold to Fyffe’s, the banana people – and the rest is history.’ After the most dramatic struggle in Ireland’s industrial history, Irish Distillers was bought by Pernod-Ricard in 1989.‘Great was the deed that was done on the ford that day, the two heroes, the two champions and the two chariot-fighters of western Europe, the two bright torches of valour of the Irish, the two bestowers of gifts and rewards and wages in the northwestern world, the two mainstays of the valour of the Irish coming from afar to encounter each other through the sowing of dissension and the stirring up of strife’.Teeling is, however, a tad older than Cuchulainn. A robust and enthusiastic 50-something – he still plays rugby (‘He runs and not slowly, like water from a high cliff or like a swift thunderbolt’), and was off to play a French over-40s team the day after I met him – Dr John J. Teeling, DBA, MBA, M.Econ.Sc., B.Comm., has an ingenuous candour, a teacher’s ability to explain, a sense of humour like a bubbling stream and an expressive, open face which constantly crinkles and clears as he talks. (‘His face is the fairest. He amazes womenfolk, a young lad of handsome countenance; yet in battle he shows a dragon’s form’.) And he approaches whiskey with all the mad courage of Cuchulainn. ‘Only three distilleries in Ireland! Yet, in the middle of the last century sales of Irish whiskey far outstripped those of Scotch. It was the second most popular spirit in the Western world. Only rum was more popular. There were around 200 licensed distilleries all over Ireland – and there had been 2000 distilleries in the mid-18th century.Teeling knows his subject. While he was studying for his doctorate at Harvard in 1970 (in international finance) he wrote case studies on the decline of Irish whiskey and the marketing of Irish whiskey in the United States. His ideas about how the decline might be reversed were shared by Willie McCarter, an Irish student at Massachusetts Institute of Technology, but it was to be 17 years before the two could put their
theories into practice. During these years Teeling taught at University College Dublin while chairing the boards of a number of mining, exploration and manufacturing companies. He is currently chairman of six public companies – four of which he founded himself – all involved in oil, minerals and gold exploration and development, and with operations in Zimbabwe, Mozambique, Namibia, Uganda and Bolivia, as well as Ireland. ‘For Cuchulainn went a longer journey than this, as far as the mountains of Armenia. He waged combat beyond his wont. He slaughtered the Amazons.’More prosaically he says, ‘Almost all these ventures are deep in the manure. The whole sector has been deeply depressed since at least 1996, and little profit is being shown anywhere in the world from such enterprises at the moment. In such a situation, success is survival. Hold on until your time comes. The contrast between the thrills and spills of mining and exploration and the steady rhythm of whiskey making could not be more pronounced.’Then came the attempted takeover of Irish Distillers; it stirred the dream of distilling in Teeling’s mind. Later in 1987, while returning from a gold exploration trip in the Pacific (‘Cuchulainn saw far off... the fiery glitter of the bright gold weapons at the setting of the sun in the clouds of evening’), he read in a newspaper that the government’s industrial alcohol distillery at Cooley, near Dundalk (60 miles north of Dublin) was in receivership. ‘The figures stacked up, and I put in a bid for IR£100,000 without even visiting the site. I should tell you that the previous year they had spent IR£1.4 million on the place. The government were nervous that I would asset-strip, and made it a condition that I “rescue and resuscitate” the distillery, which was my intention anyway. I bought the site and plant for IR£106,000.’‘The terms are such as will bring fame to you, O triumphant Cuchulainn.’‘I was enthusiastically joined by my old friend Willie McCarter and we brought in two other successful Irish entrepreneurs, Paul Power and Lee Mallaghan to raise the required IR£3m start-up capital. The Irish Development Authority would have nothing to do with us.’‘In that manner they parted in the glen and each side withdrew equally angry.’While new pot and column stills were being installed, we set about acquiring further whiskey heritage – the buildings and wonderful warehouses of Locke’s Distillery at Kilbeggan (founded in 1757 and the oldest whiskey distillery in the world), the remaining assets of Andrew Watt’s in Derry (with the Tyrconnell brand), the assets of Millar’s Distillery, Dublin (along with a small bottling line), the pot stills at Tullamore Dew Distillery, which we moved to Kilbeggan. So by the time the first spirit flowed from the pot stills in 1989 (grain whiskey production started the next year), we had a clutch of respected brand-names.’ ‘Here follow their names: Two men called Cruaid, two called Calad, two called Cír, two called Cíar, two called Éicell, three called Cromm, three called Cur...’‘I am convinced that one of the reasons for the eclipse of Irish by Scotch at the end of the last century was a failure to supply drinkers with the styles of whisky they wanted. So we set about creating whiskies which, it seems to us, are tried and tested in world markets. For instance, to meet the demand for malt whiskey we bottle three singles: Tyrconnell (an unpeated single malt, positioned against Glenfiddich), Connemara ( a peated single, positioned against Lagavulin and Laphroaig) and Locke’s Single Malt (a limited edition with only a hint of peat). Our blended whiskies – Kilbeggan, Locke’s, Millar’s and Inishowen – are inspired by successful Scotch styles such as J&B Rare and Ballantines.’The early years of production at Cooley were supported by IR£7m in cheap finance available through the Business Expansion Scheme, but this dried up in 1991, when the Irish government changed the rules, and Cooley cast around for a partner who could supply the needed capital to set about marketing the whiskeys. An early contender was Burn Stewart, the Glasgow-based Scotch distiller, but the collapse of sterling against the Irish pound made it withdraw.‘Operations were costing us £40,000 a week. We had to find a partner quick. [‘If you would accept from us, O triumphant Hound of Cuchulainn, half our cows and half our womenfolk...’] Irish Distillers was approached and a deal was struck, but on the night it was agreed, Richard Burrows, its MD, announced on TV that it planned to close down the distillery, since it was producing “poor quality spirit in poor quality plant, and damaging the reputation of Irish whiskey”. I was incensed. This could not be further from the truth. The action for defamation still rumbles on in the courts. (‘“Since I, by virtue of those I have slain, am the veteran who guards Ulster, I shall accept no terms until I am given every milch cow, every woman of the Gael”.’) The Irish Government then referred the deal to the Competition Authority, which rejected it.‘Which left us back at square one. Then we struck an advance purchase deal with Heaven Hill Distillery in Kentucky (from whom we
buy casks), and with Borco Mathissen, our distributors in Germany. The directors put up another IR£1.7 million, we battened down
the hatches and determined to go it alone.” ‘Cuchulainn uttered his hero’s cry and the shout of one outnumbered’.Cooley produced only a limited amount of malt spirit and no grain spirit between late 1993 and 1996, while all resources were thrown behind launching and marketing the brands around the world. Tyrconnell Single Malt Pure Pot Still Malt Whisky was relaunched after a 50 year absence in March 1993; next year came Kilbeggan and Locke’s, Connemara appeared in 1996, and won two gold medals in international competitions that year. At the same time, the company built significant orders for supermarket own-label Irish whiskeys: today, Cooley supplies own-label whiskey to eight out of the top ten UK retailing chains and five of the top seven French retailers.‘Of every food and every palatable, pleasant, strong drink which was brought from the men of Ireland to Fer Diad, an equal portion was sent northwards from him across the ford’.The last word should go to the anonymous author of ‘Táin bó Cúalnge’: ‘A blessing on every one who shall faithfully memorise the Táin as it is written here and shall not add any other form to it.’ They’d reckoned without John Teeling.
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