Sir Douglas Myers, 1938-2017
One of our most successful and controversial businessmen was a passionate advocate for New Zealand.
One of our most successful and controversial businessmen was a passionate advocate for New Zealand.
Sir Douglas Myers, who died in London on April 8, was not only one of New Zealand’s most successful and audacious businessmen and a strident advocate of pro-market reforms. He was also an embodiment of the story of globalisation writ long.
Go to the history section of the website for Lion, as the Sydney-based company he built is now known, and you’ll find that the public relations department has
managed to string its history back to the 18th century.
In 1795, it declares, convicted highway robber James Squire – deported from Britain on the First Fleet of convict ships to Australia – used hops to produce Sydney’s first hop-based beer.
Fast-forward 222 years and the James Squire brand lives on as a boutique beer among the vast array of brands produced by Lion on both sides of the Tasman. In Australia, the household names include Castlemaine XXXX, Tooheys, Hahn, James Boag (as well as Squires); in New Zealand, Steinlager, Speight’s, Mac’s and Emerson’s. These days, Lion also brews European mass brands Heineken and Stella Artois.
Since 2004, Lion has been wholly owned by Japanese drinks giant Kirin, which won one of the last of many tussles involving Myers and fellow shareholders. While Steinlager wraps itself in New Zealand identity through its three-decade-long sponsorship of the All Blacks and involvement in every one of New Zealand’s America’s Cup challenges – both initiatives a legacy of Myers’ leadership – the profits go home to Tokyo.
Yet the foundation for this globalised corporate action had its roots in three generations of the Myers family creating, building and welding together a family-controlled business empire in New Zealand.
If James Squires is the quintessential Australian convict story, Myers is a quintessential New Zealand story of respectable settler wealth. His grandfather, Sir Arthur Myers, came to New Zealand from Victoria in 1868 aged two, with his widowed mother. Arthur’s working life began at the Hobson Bridge brewing business owned by his uncle, Louis Ehrenfried, in Auckland.
In 1898, that business was merged with the Albert Brewery, owned by pioneering Auckland Mayor Sir John Logan Campbell. The resulting firm, Campbell & Ehrenfried, became a major liquor business. C&E merged with the original owner of the Lion brand, the Great Northern Brewery, and in 1923 some 10 breweries merged to become New Zealand Breweries.
Sir Arthur Myers was mayor of Auckland between 1905 and 1909. The inner-city Myers Park still bears his name, and he served as a Cabinet minister during World War I.
By 1933, it was the turn of Sir Arthur’s son, Kenneth, to step up to the family business, which was done reluctantly and required his return from London. Sir Kenneth, as he would eventually become, revitalised the company and, in 1938, had a son, Douglas, whose own path to the top at Campbell & Ehrenfried was to be similarly unenthusiastic, according to Sir Douglas’ self-deprecating accounts over the years.
His childhood was anything but ordinary. Born into an already very wealthy family, Douglas toddled about the palatial mansion built in Glen Innes before the eastern suburbs were suburbs.
Photos in the official biography by Michael Bassett and Paul Goldsmith show a sweeping staircase in the main entrance hall. He travelled as a child to his mother’s parents home on Lake Ontario, Canada, with its large motor launch and mansion.
At home, the furniture was from Fortnum & Mason and that sort of style was lifelong. Public records show Douglas Myers in dispute with the Customs Department in 1991 over duty paid on a $30,000 dinner service purchased in London.
I’m a New Zealander who feels reasonably passionate about his country. But I knew the place was massively underperforming.”
AN EARLY FLAIR FOR AUDACITY
Educated at the elite King’s College in Auckland, Myers was a champion swimmer but a middling student who was “very boring … just low grade, plodding on, keen not to stick my neck out too far”, he told journalist Tony Reid for a Listener profile in September 1990.
Left to his own devices, he could easily have eased back into something he came to hate and to call “the old Kiwi drift” – a pleasant life without ambition or experience of the wider world. Instead, “through family connections and because I wasn’t a total moron”, Myers found his way to Cambridge University, which he likened to “an organised holiday camp containing amazing events”.
Perhaps because his father had been pushed into the family business, Myers didn’t immediately face that pressure. He floated around Europe, learnt hotel management in Hawaii and spent time at Harvard Business School before returning to New Zealand at age 26, where he took up the reins at C&E because his father had lost interest.
He found New Zealand in 1965 to be conformist and dull. As was the business, which had little growth potential and was heavily regulated. “It was such a constricting little society,” he told the Listener. “I mean, I’m a New Zealander who feels reasonably passionate about his country. But I knew the place was a bloody crummy, massively underperforming, unstimulating community. Totally deadening.
“I don’t give a stuff about saying that because it bloody well was!” he said, in one of many quotes from his time of much greater public profile in the 1980s and 1990s, when his identification as both New Zealand’s wealthiest man and a cheerleader for pro-market economic reforms made him an easy target for critics.
Yet for all that he claims to have been a dull student, Myers showed an early flair for audacity and a certain ruthlessness in
business dealings. In the mid-1970s, he was taken to court by his own extended family when he bought them out of C&E for $5.6 million without telling them he’d also agreed to sell one of its assets, the Strand Arcade on Queen St. He got $3.7 million for that, allowing him to take a capital dividend of $5.3 million out of the business.
The argument that he wasn’t obliged to disclose the Strand sale was rejected by the Court of Appeal. He had to pay out, and the incident harmed his reputation.
In 1981, as a merger between Lion and C&E to create NZ Wines & Spirits began to sour, Myers used similarly audacious businessman Alan Gibbs to wring payment of $24 million for his 50% of NZWS from Lion. He then stunned everyone by his own bid for 19.9% of Lion, which saw him installed as chief executive.
In 1988, when he merged Lion Breweries, as it was by then, with department store owner L D Nathan, to create Lion Nathan, he offered merchant bankers Fay, Richwhite $9.20 a share for their cornerstone 35% stake. Other L D Nathan shareholders were offered the equivalent of just $5.60 a share.
Malaysian Breweries, a 22% shareholder in Lion Nathan, sued over the generosity of the offer to Fay, Richwhite, but Myers won that round, establishing that not all shareholders have equal rights in a takeover bid. Malaysian Breweries quit its holding and invested in rival DB Group instead.
BACKING THE LABOUR PARTY
By then, Myers the political activist was coming to the fore. The election in 1984 of a Labour Government that upended New Zealand’s stale economic order chimed perfectly with Myers’ deep frustrations with the country of his birth.
Whereas previously he might have lobbied Prime and Finance Minister Rob Muldoon, he was now financially backing the Labour Party because of its Finance Minister, Roger Douglas. The votes of the likes of Myers for Labour in the 1987 election remain proof for Labour activists with long memories that Rogernomics was a mistake.
Myers was one of a swashbuckling group of corporate mates – the likes of David Richwhite, Michael Fay, John Fernyhough, Gibbs, tax lawyers Geoff Ricketts and Robin Congreve, Roderick Deane and economist Roger Kerr – who had profited but chafed under Muldoon’s regulatory yoke.
The country was riding high on a new sense of liberation – expressed in the 1987 Fremantle challenge for the America’s Cup, so nearly won and backed by Lion Nathan – at the height of the Rogernomics reforms.
From that group was born the Business Roundtable, which in its earliest manifestation was a group of powerful corporate individuals – rather than companies – funding original research and argument in favour of free-market reforms. Myers was among those whom Fernyhough referred to once as having been given an opportunity in middle age to become “revolutionaries”.
Myers embraced the changes and always argued they made managing his previously highly protected businesses harder. Of National’s union-busting Employment Contracts Act in 1991, Myers was to observe that it forced him to change his business focus from raw ingredients, supply chains and tariffs to a far greater focus on the development and rewarding of staff.
A “CLASS ENEMY”
At the time, however, Myers felt the wrath of a comfortable, conservative business