A deadlock in trading negotiations has forced Angus Council to find a new golf business partner in China, it has emerged.
Berrytex, now trading as Pro Simon, had signed a deal with the council in March 2009, granting free rights to use the Carnoustie Country logo on branded clothing and items.
The original deal was due to end in December last year, but the agreement was continued until the end of this month.
However, in a document only just made available, the council said Pro Simon had decided to withdraw from the trading relationship, after making around £790,000 from the venture.
Correspondence from the firm’s major shareholder in June stated that a board change led to the decision to ”stop this collaboration”.
He wrote: ”Please believe me that this is the most difficult decision we have made after (investing) so much money and (spending) so much time on it.”
Legal correspondence a week later said the agreement had to end due to ”adjustment of our marketing strategy and sales pressure.”
It added: ”According to common commercial practice we will be utilising a grace period of six to 12 months for handling of current Carnoustie Country inventory, and minimising any negative impacts to the brand.”
Pro Simon had permission to use the Carnoustie Country brand for free until this month, allowing for a two-year period in which to market its clothing.
Deputy Angus Council leader Ian Mackintosh and the head of economic development, David Valentine, met three of the firm’s directors during that month’s official council visit, in the hope of persuading them to further the agreement.
While this was declined, Pro Simon agreed to cooperate should the council be able to find another to take the brand over.
Continued…
Infrastructure services director Eric Lowson’s report to today’s committee meeting states the council must acknowledge circumstances and learn from them ”when considering future initiatives”.
Last year Pro Simon opened a flagship store in Beijing on the back of the agreement, placed points of sale in each of its 80 pro shops, sold 6,000 units and made a gross retail income of £219,000.
However, these statistics pale when compared to the gross business sales of £571,000 and 28,000 units sold.
Mr Lowson’s report notes the venture with Pro Simon has raised awareness of Carnoustie among golfers in China, with ”minimal” direct council costs.
Another arm of the venture, a manufacturing base in Yantai for Golf Mat Company (Scotland), was less successful, and that firm is understood to be lapsed.
The firm was to produce a new type of golf mat for Asian markets.
Responding to previous criticism of the money spent on the Carnoustie Country brand, Mr Valentine has produced figures showing more than £2.7 million has been generated over the last four financial years by Carnoustie Country golfing packages.
He said ”robust economic impact studies” had shown that for every pound the council spends on promoting golf, £12.72 is brought back to benefit clubs, tourism and the local economy.
Questions had also been raised over the wisdom of pumping large sums into sponsoring events like the British, senior and women’s opens and why £25,000 was paid to sponsor golfer Catriona Matthew.
Accounts obtained by The Courier under freedom of information legislation showed expenses adding up to £412,984.21 since 2007/08, with most going on marketing and promotion.
In 2007/08 £167,819.77 was spent, including more than £30,000 on an exhibition stand at that year’s Open, £20,000 on an economic impact study and more than £20,000 on catering.