Web site will bring bar trade online

by Kyran Fitzgerald 17th June 2000

SINCE the Sixties, the Irish bar trade has altered beyond recognition and big money has poured into a business which has been transformed with the arrival of fitted carpets and the lounge bar, and more recently, the super pub and the designer bar.

People may be shelling out millions of pounds for premises and millions more on expensive fit outs, but this is a business which has not changed greatly once you move behind the counter.

Supplies are ordered, wages handled and accounts kept much as they have been for years now. Consumption patterns are checked by reference to invoice dockets, orders handled by telephone.

Late last year, two young men, related by marriage and each with a background in the drinks business, happened to be discussing the spread of the internet and the whole dot.com mania.

“We realised that the drinks trade had not benefited from the same influx of technology as other businesses yet we also were aware that this is one of the biggest procurement businesses in Ireland.

“A vast range of supplies, everything from glasses to furniture, food, toilet rolls, cleaning fluids are purchased on a regular basis.

“Traditionally, orders are phoned, or faxed in. Reps call round. We wanted to see how technology could be used to streamline this process.”

Richard Finnegan, a 29 year old software industry executive and his brother in law, Hugh Grainger, a publican turned recruitment consultant, spotted a large gap in the market. The basic plan, to establish a web site offering various services to the trade, was hatched at the annual dinner dance of the Licensed Vintners Association, an unlikely enough location for the launch of a hi tech venture.

“We decided to consult a friend, Patrick Reynolds, who has spent the past couple of years working in IT. He was interested and came on board.”

Reynolds is now a director of the company. The first task was to develop a template, or outline of just what the web site would contain. They spent a lot of time talking to potential users. The building blocks were put in place. The site will cost several hundred thousand pounds to develop. Much of the funding is being provided by a private investor, Niall Ring, who is also Chairman of the new company. Finnegan and Grainger have also put up considerable sums. Grainger is using the proceeds of sale of his licensed trade recruitment business.

Ring worked for five years as head of finance with an IFSC company, Bankgesellschaft Berlin and he is currently running a construction and property company, Green Castle Investments, which is working on several projects around Dublin.

The fifth member of the board is John Tuite, the former Sales Director of Beamish & Crawford, who has more than thirty years experience of the drinks industry.

The plan is to extract several income streams from the venture. To get beyond the web site’s front page, users will require a membership password. An initial fee of £500 a year per outlet will be charged. Secondly, advertising space will be available on the site. Suppliers will be able to engage in targeted advertising aimed at the trade. PubXchange.com will also look to develop management information systems for publicans on a customised basis at a cost of anywhere between £1,000 and £5,000 depending on the scale of the operation in question. Says Richard: “This will allow people to manage their administration, everything from accident reports to holiday rosters and wage sheets. The information is password protected.”

A fourth income stream will come in the form of online supplier listings, a virtual Yellow Pages style directory covering everything from legal firms to security companies. Drink trade suppliers will not , needless to say, be charged for being listed as their involvement is critical. At the heart of the system is an ordering facility. On the left of the screen, users will be able to choose from a list of different suppliers whether breweries, bottlers or providers of wines and spirits. Once users click under breweries, they will able to highlight a specific supplier before making an order.

“It will be possible to create all orders required in one visit to the site. Each supplier will receive his part of the order in e mail format. The main efficiency is in time saved in the placing of orders.” Methods of delivery will remain as before with each supplier delivering to the premises in the traditional fashion. The plan is to line up 350 users by Christmas and between 500 and 600 by next June. Already 55 members in the Dublin area where the project is being tested, have been lined up. A nationwide rollout is about to occur. All told there are some 15,000 licensed premises in Ireland so there is a large potential pool from which to draw and Richard Finnegan is keen to stress that they will be targeting premises of all types, rural and urban, small and large.

PubXchange.com has been attracting outside interest. The group were in discussions with Hugh O’Regan, proprietor of the trendy Liffeyside Morrison Hotel. O’Regan has been involved in another internet venture, Bar Trader. “We looked at their business model and eventually decided that there were no real synergies,” says Richard.

The company is currently in negotiations with an unnamed venture capitalist on a new round of finance.

Over the next two years, the plan is to expand the business to target markets around Europe, growing through venture capital investment. The sales director is uncomfortably aware that he was born on April Fool’s Day. To date, there are few signs that either he, or his young MD, Richard Finnegan, have lived up to that particular early billing.

© Irish Examiner, 2000

Back to articles