How Laithwaites turns wine into gold; Laithwaite is the biggest wine merchants in the world, excluding supermarket retailers.

How Laithwaites turns wine into gold

Charles Vallance and David Hopper meet a man who has made his fortune, and a company employing over 1,000 people, from his lifelong passion.


The Laithwaites make wine at their collection of vineyards and wineries in Bordeaux and Australia. Photo: Ben Cawthra / Rex Features

By Charles Vallance and David Hopper

9:42PM GMT 29 Mar 2013

Were you to bump into Tony Laithwaite at the post office or at an airport check-in you would probably guess that he is a wine maker; put him in a vineyard and he looks like he belongs there — in the way that French existential philosophers look like they belong in street cafes on the Boulevard Saint-Germain.

The UK’s biggest wine company is eponymously named after Laithwaite and his wife, Barbara. In fact, according to some calculations, they are the biggest wine merchants in the world, excluding supermarket retailers.

Trading under his own name and several other subsidiaries, Laithwaite and his wife have built up a company with turnover in excess of £350m annually — which works out at around 50m bottles — with usually at least 2,500 wines in stock, and directly employing more than 1,000 people worldwide.The Laithwaites make wine too, owning a collection of vineyards and wineries in Bordeaux and Australia.

“They say that the only way to make a small fortune in wine is to start with a large fortune,” Laithwaite laughs. “People don’t usually make money out of wine. You go into wine because you like it. And that was my attitude. My plan was to have a lovely life, just swanning around in vineyards.

“A lot of people I know have wanted to build up businesses so that they could just sell them on. That was never my idea and it wasn’t Barbara’s. It’s the wine itself that gives you the reward”.

In 2010, world wine consumption was the equivalent of nearly 32bn bottles, and global sales are currently showing year-on-year growth. The UK is the world’s biggest importer and sixth-largest consumer and, although consumption is declining, we are drinking more expensive wine.

Neither of Laithwaite’s parents were entrepreneurial, but he grew up with a passion for all things French: “It just seemed so sexy. France was cool.” A three-month trip after he had left school ignited the love affair. On a second trip he worked in the vineyards of Bordeaux. “It was great … exotic, fabulous food, and there were the girls as well … .”

At Durham University he wrote his geography dissertation on the wines of Saint-Emilion, “I showed it to my director of studies and told him I wanted to get into the wine trade, but he tossed it back at me, and said, ‘The best thing you can hope for, laddie, is running an off-licence in Carlisle’.”

He returned to France and got a job at a winery; the owner, Monsieur Cassin, became his mentor, suggesting Laithwaite sell his wine in the UK. “My grandmother gave me £700 and then gave me another £7,000 through my mother. You needed a bit of funding and the banks would certainly not have given any money to someone like me.”

It was a joint venture, with Barbara, his invaluable partner who became his wife. “She is the business head. She kept saying I was selling too cheaply. She was a statistician. So one day I just said, ‘Well, if you think you’re so bloody clever, why don’t you come and do it?’ So she did. She chucked in an amazing job doing audience research. They said she was mad to go from that to working for me in a caravan under a railway line.

“But she sorted me out. She discovered I hadn’t kept any accounts for two years. Barbara took one look and saw that it didn’t make financial sense, so she made me put the price up. At first, we didn’t really try to make profits. At that time, the top rate of tax, if we made good profits, was going to be 98 per cent super tax. What was the point?”

But it was a good time to start in the wine business. Retail Price Maintenance was abolished and, in France, Monsieur Cassin was creating a mini-revolution of his own, becoming the first co-operative to sell directly to a supermarket in Bordeaux.

“All of a sudden, there were these small entrepreneurial growers who weren’t happy just to sit there and wait for their stuff to be bought in bulk; they wanted to put it in a bottle and sell it themselves. That was perfect for me. Roll-on-roll-off ferries had just started, so I was able to drive over directly to them. I called myself ‘Bordeaux Direct’, just to emphasise that I only bought estate-bottled wines.

“Customers would now see that, with me, when they got my Saint-Emilion, it tasted very different from the disgusting stuff mass-bottled in the UK.”

In those early years the Laithwaites developed the simple modus operandi of reinvesting profits when they came in. But the absence of a proper management structure, coupled with relentless expansion, meant that, by the early Eighties, with turnover at tens of millions, logistics were becoming troublesome. Laithwaite, by then a father of three, suffered a heart attack. He was told by his specialist: ‘You can’t carry on. You’ve got to stop or you’ll die.’

“I did pull right back,” he admits. “Barbara carried on running it and for the first time made a decent profit, because I wasn’t interfering”.

In 1991, a board was recruited, including a managing director, wine director, marketing director, finance director, and head of IT. The effect was spectacular.

“We went to something like £50m by 1994, then £100m and more. But it was just perfecting what was there.”

The Laithwaites became non-execs, but after two decades running the company the relationship with new managing director, Greg Hodder, was not easy. “There was conflict, I’ll tell you. We were like two cocks. I can’t complain: he was good and he did his stuff. I felt that it was his job to run it, yet it was still my business, and I found it hard to let go.

“But the business wasn’t in good nick. We hadn’t kept up with the market. When we started up, supermarkets didn’t do wine; then they started but with poor wine and they didn’t know how to sell it. But then, all of a sudden, the supermarkets became really good. And there were other merchants starting up as well. So it was a call for us to change too.”

He says it was like a marriage; both had to compromise. He even brought in a mediation expert from the London Business School to manage the relationship.

The company was rebranded ‘Laithwaite’s Wines’ – though he was embarrassed it bore his name. “I’m of a generation and an upbringing where you don’t brag. I kept thinking that all my mates will be saying, ‘Look at that show-off Laithwaite’.”

He hates wine snobbery. “Socially, I don’t appear to take wine all that seriously. I’m fond of saying, ‘It all tastes the same to me.’ Because, when I’m working, I’m intense, so when I’m not working I just want to drink without thinking too hard. I have a terrible cellar at home. When I’m relaxing, I want someone else to choose a fantastic wine.”

These days, Laithwaite’s personal wealth runs to many millions; the 2012 Sunday Times Rich List put the family at 410th in its UK rankings. Back where they started, in Windsor, the Laithwaites have become the tenant farmers of a four-hectare plot on the Queen’s estate. After planting 10,000 vines there in 2011, their first harvest is due soon.

They dislike the industrialisation of the wine industry. “I want the little guys to carry on because they’re doing things of character. People may want a bottle of Chardonnay for a Friday night at £5, but I want to say, ‘Yes, but try this at £15, and appreciate the difference’.”

Laithwaite has relinquished aspects of the firm’s management yet his ambitions remain as strong as ever. There are now more than a dozen shops, and international growth is a key element of the plan. Almost a quarter of the company’s business is now in the United States where turnover has reached some $100m (£65m).

The US may be a tricky market, but its wine consumption has grown every year for almost two decades.

Direct retailing involves a significant degree of customer churn, but a company recruiting around 200,000 new customers each year has to be doing something right.

Extracted from The Branded Gentry: How A New Era of Entrepreneurs Made Their Names by Charles Vallance and David Hopper (Elliott and Thompson, £20)

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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