Wednesday, 18 October 2017

Waiting for the other guy to blink first

There scarcely seems to be a week that goes by when GBG ticker Martin Taylor doesn’t go into a smart dining pub in some leafy part of the country on a weekday lunchtime, spot more cask beers on the bar than there are people drinking them, and end up with a glass that varies between mediocre and undrinkable. It’s generally acknowledged that there is a widespread problem with pubs stocking more beers than their turnover justifies, with the inevitable knock-on effect on quality. Indeed, this was acknowledged in the recent Cask Report:

Five years ago, I wrote how a simple mathematical exercise shows that the average pub serving cask beer does not have the turnover to justify more than two lines, yet the simple evidence of one’s eyes shows that the actual average number is considerably more. Matters have certainly not improved in the intervening years. On yesterday’s trip to Leicester (full report to come) we visited eight pubs, by no means all specialist alehouses, where the average number of different beers on sale was seven. Only one of them could have been called busy, and that was one with the second lowest number of pumps. We only actually encountered one returnable beer, which was changed without demur, but that had clearly been lingering in the pipes for days.

This issue seems to be generally acknowledged within the trade, yet there is a strange reluctance to actually do anything about it. I’m sure a lot of it comes from a fear of being the first pub to blink and be seen to be reducing its range, which may be perceived as a sign of retrenchment or failure. And CAMRA doesn’t help with its constant demands for “more choice” and lauding pubs when they add another pump to an already over-extended range. But, as long as it isn’t addressed, the endemic problem of slow turnover leading to poor quality will remain, and continue to lose sales for cask to more reliable kegs, thus creating a vicious circle.

It is true that some specialist beer pubs do manage to sustain ten or more beers in good condition, but that is because they have a specific appeal to beer drinkers, so 80% of their customers are drinking cask, as opposed to less than 20% in more mainstream pubs. And I’ve been in well-known GBG-listed multi-beer pubs when on a Tuesday lunchtime the beer has been distinctly past its best. If you only drink on Thursday, Friday and Saturday nights you may not notice a problem.

In the past, I’ve mischievously suggested that pubs should display on each pumpclip the day and time that the beer was put on sale. Clearly that isn’t going to happen, as it would expose far too much poor stock management practice, but it would certainly concentrate a few minds if it did. Perhaps a more realistic option would be for Cask Marque to include within its assessment viewing pubs’ records of stock and sales, and failing pubs that routinely keep beers on beyond three days.

I know it may be an unfashionable view that goes right against the current CAMRA orthodoxy, but I would contend that fully half of all pubs currently serving cask only have the turnover to keep two beers in decent condition. And a substantial number, especially those dining pubs without any real beer-drinking customer base, should only be serving one throughout the week, with possibly another tapped on a Friday to sell over the weekend when it’s busier. “Guinness is their draught stout; XXX is their cask ale”. It’s never going to happen, though.

Monday, 16 October 2017

A little bit of peace and quiet

Sophie Atherton has recently written in the Morning Advertiser about how today’s pubs are so often offputtingly noisy. It’s an article that rather meanders around the subject without reaching a definite conclusion, and it’s perhaps unfortunate that she takes Wetherspoon’s as an example, when as a matter of policy they don’t have any piped music. It can be the case, however, that the hubbub of conversation in a large, echoing space can become deafening, and in such situations it may be desirable to play low-level background music to cancel it out a bit.

There are some worthwhile points hidden away in there, though. The first is that the widespread trend towards hard surfaces in pubs tends to magnify the general level of sound, and there is a good case for the return of carpets, soft upholstery and curtains to soak it up a bit.

It also should not be forgotten that, for many people, pubs are valued as a “third space” between work and home where they can escape from the stresses and strains of both. They don’t want to be entertained, or to “have fun”, they just want to chew the fat with their friends or just engage in a bit of quiet contemplation. All too often, people are deterred from pubs not by the absence of “attractions”, but by the presence of elements that they find offputting, amongst which loud music and TV football are two of the most obvious.

And the seemingly inexorable march away from compartmentalisation in pubs means that whatever’s going on in one part is effectively going on in all of it. It becomes impossible to accommodate differing tastes and activities, not to mention removing the sound-deadening effect of walls and partitions. Pubs could widen their appeal if they were able to cater for a variety of likes and dislikes rather than adopting a one-size-fits-all approach. As she says in the article, “a range of different environments to suit different customers.”

Who knows, given a different legislative climate, they could even provide space to accommodate the legendary Elephant in the Room...

Friday, 13 October 2017

Raising the bar

In last week’s issue of the Spectator, there was an interesting article (registration may be required) by Rory Sutherland in which he argued that the development of well-known chains of service businesses such as coffee shops and budget hotels, while we may not think much of them, had served to raise standards overall by creating what he calls a “threshold of crappiness”.

It is worth remembering that many unfashionable large businesses create value in ways that are often under-appreciated. No one will ever write gushingly about McDonald’s or Starbucks or PremierLodgeExpress. But what these large chains do is valuable, even if you never use them. They effectively raise what I call the ‘threshold of crappiness’ in the sectors in which they operate. To operate successfully as a coffee shop or a sandwich bar or hotel (or a minicab firm), you have to be at least as good as a chain or else you fail. This raises the bar for everyone. You can get better coffee in a truckstop now than at Claridge’s in 1990.
Surely much the same is true of Wetherspoon’s in the pub industry. They are often derided for their cheap and cheerful menus and customers and lack of atmosphere, but they have had a salutary effect in raising the bar of what people expect from a pub. Most notably this is true in terms of all-day opening and food service. It is largely forgotten now that, in the early years after all-day opening was introduced in 1988, it was often hard to find a pub that was actually open in the afternoon. But, if the Wetherspoon’s down the street is open all day, a competing pub may well lose customers if they’re not. Even if you scarcely ever go in the pub in mid-afternoon, it’s reassuring to know you can.

Back in the early 1980s, there were some truly terrible pubs with a slapdash, take-it-or-leave it approach to customer service, especially in London, which is where Wetherspoon’s started off. Today, while they’ve not entirely disappeared, they’re much less common. If you run a pub in a town or city centre with a Spoons, you have to do at least one thing better, or you’re not going to survive.

Thursday, 12 October 2017

HOW much a pint?

This article in the Morning Advertiser by Pete Brown has sparked a lot of interest and discussion. In it, he’s arguing that people should be prepared to pay £9 a pint if the quality of the beer justifies it. In principle, of course, he’s entirely correct. In pretty much every consumer market, products that cost more in terms of ingredients or production processes, or command a greater cachet, succeed in commanding an often substantial price premium.

However, as I’ve argued here, the nature of the cask beer market makes this difficult to achieve. It may be more the case with “craft keg” beers, but they remain very much a niche product. In general, price premiums apply between pubs, or between beer categories, not between beers within the same category. The most successful example of a premium-priced beer in pubs is, of course, Guinness, which, despite being of fairly modest strength, sells at the same price as premium lagers, and will typically be 20% dearer than a comparable cask stout.

But Pete rather clouds the issue by talking about a beer , Brooklyn Brewery’s Cloaking Device, which is 10.5% ABV. Now, in Stockport, where Robinson’s Unicorn (4.2%) is about £3 or a little more, you would expect to pay maybe £6 for the 8.5% Old Tom. In London, where the £4.50 pint of 4% beer is commonplace, £9 for a beer well over twice the strength doesn’t seem that unreasonable. The main reason Cloaking Device is so expensive is not that it is much better, but that it is much stronger. A far better example would have been if he had found an example of beer of ordinary strength that was selling for half as much again as the norm.

This has also inevitably led some people to say “why are you expressing it as a price per pint when it isn’t going to be drunk in pints?” Well, probably it isn’t, but it’s still desirable to have a consistent yardstick to make comparisons between different beers, and given that the pint is the standard unit for drinking beer then it seems sensible to use it. Even if you compared price per third, or price per gallon, the ratio would be identical. This line of argument comes across as fatuous and tendentious.

Beers of 10.5% only make up a minuscule portion of the overall market, and in most pubs you’ll struggle to sell anything over 5% on draught. From his North London eyrie, Pete should also not forget the drinkers in his native Barnsley whose limited means would make them blanch at the idea of paying £9 a pint or anything like it. Good beer shouldn’t only be the preserve of champagne socialists.

And it should be remembered that, in the early days of CAMRA, it was often the case that there was an inverse relationship between price and quality. The best beers were those sold at lower prices in plain pubs that hadn’t been expensively tarted up, and made by small breweries who didn’t advertise and hadn’t invested heavily in whizzy new kegging plant.

Tuesday, 10 October 2017

Bitten by the Dog

Last Saturday, I organised a pub tour of central Birmingham for members of the Beer and Pubs Forum. It may not seem the most likely of destinations, but it has the advantage of being easily reached by train from all directions, and people travelled from the four points of the compass, the furthest away being Frome in Somerset. In fact, Birmingham is underrated as a beer and pub destination, and it was a very enjoyable day. It was good to meet both old and new faces.

I’m not going to do a blow-by-blow description, but the general consensus was that the pub of the day was Black Country Ales’ Craven Arms just outside the Inner Ring Road near the Mailbox shopping complex. It’s a classic old-fashioned street-corner pub with an attractive tiled exterior and a cosy, welcoming interior with a good choice of beers.

This was actually the last pub on the itinerary, but, given that it was on the way back to New Street Station, a few of us decided to pop in to the BrewDog bar on John Bright Street. While I certainly have no ideological objection to drinking keg beer, this was actually my first visit to one.

It’s not really my cup of tea of course, but you can’t knock its success, and early evening on a Saturday it was packed out with a noticeably younger crowd than any of the pubs we had visited earlier. You do have to wonder, though, how many are really interested in the beer as opposed to just seeing it as a cool place to go.

All four of us plumped for two-thirds of the 6.5% Elvis Juice. This was the first time I have ever drunk a two-thirds measure in a pub and, at £4.95 (equivalent to £7.42 a pint), it was also the most expensive draught beer I had ever had. Described as a “grapefruit-infused IPA”, it was quite overpoweringly citrusy, with to my palate notes of apricot in there as well. I compared it with a particularly pungent Islay malt whisky, where you can appreciate the quality and distinctiveness, but wouldn’t really want to have more than one. I also couldn’t help wondering what it would be like in cask form.

The beer board could be rather more informative. It doesn’t help that prices for different beers are quoted in different volumes, so it’s hard to make a comparison, and it would benefit from at least a brief indication of beer style. To be fair, there may have been more information in the menu booklets on the tables. (The image above is just a stock picture and not taken on the day). It’s also worth noting that, unlike many of their craft competitors, BrewDog’s beers tend to be crystal clear rather than murky.

An interesting experience, but not really a place where I’d become a regular visitor. And I think it will be a long time before they open a branch in Stockport...

Friday, 6 October 2017

Putting the message across

Following the launch of Drinkers’ Voice last month, I’ve been having a few thoughts about the best way to put the message across, and the following points occurred to me.

1. Choose your battleground

There’s certainly an overwhelming body of evidence that moderate drinking produces better health outcomes than total abstention, and this needs shouting from the rooftops. There’s no case for telling moderate or light drinkers to give up entirely for the sake of their health. But the exact mechanism isn’t fully understood, and may have as much to do with psychological as physical factors. It doesn’t mean we should be telling unwilling people to force down a couple of glasses a week for the sake of their health.

Therefore caution is needed over presenting alcohol as a “healthy substance”. It’s fine to say that moderate drinking isn’t incompatible with a generally healthy lifestyle, but going too far to suggest it’s a necessary component of one. And what about all the people, including me and probably you, who knowingly drink a bit more than the minimum point on the J-curve of risk? They deserve representation too. If you fight the public health lobby specifically on the health issue, you are on shaky ground.

Far better to take the line that:

  1. Any health risks are often greatly exaggerated, especially those of exceeding the recommended guidelines even by quite a substantial margin
  2. Intelligent, informed adults are entitled to make their own decisions as to what risks they run in pursuit of enjoyment
  3. There are plenty of other activities that are generally accepted, but are known to carry enhanced risk, such as rugby, horse-riding, mountaineering and (whisper it softly) promiscuous unprotected sex. So long as people’s eyes are open, then why shouldn’t they?
At its core, the defence of people’s right to drink alcohol is an issue of individual liberty, not one of health.

2. Don’t make needless enemies

Defending drinkers’ rights is a different issue from that of defending smokers. Drinkers’ Voice isn’t an anti-smoking ban campaign. But it can’t be denied that the anti-tobacco campaign is widely seen as a template for that against alcohol, and in the eyes of the public health lobby the tobacco and alcohol industries are lumped together as “toxic trades”.

So special pleading that “alcohol is different from tobacco” isn’t really going to get you anywhere, and is going to alienate many people who you really need to get on side. In principle, I have considerable sympathy for the argument that cannabis should be legalised. But campaigners do themselves no favours in enlisting my support by constantly banging on about how it’s actually safer than alcohol.

3. Stand together or hang separately

There have also been the inevitable rumblings of discontent against this within CAMRA. Surely CAMRA’s role should be fighting the big brewers, pubcos and supermarkets rather than lining up alongside them? In the 1970s, when the current anti-alcohol campaign was hardly even a cloud as big as a man’s hand, that was maybe a reasonable attitude to take, but today, when the danger is all too clear, it’s a fatal division. As Churchill is supposed to have said “an appeaser is one who feeds a crocodile, hoping it will eat him last”. The public health lobby are completely uninterested in drawing a distinction between pub and home drinking, or between craft beer and alcopops. Either drinkers stand together, or they hang separately.

I’ve written before about how some elements within CAMRA seemed willing to be useful idiots for the anti-drink lobby. Maybe, going forward, whether or not people are happy to go along with a wider campaign on the issue will be a key indicator of how serious they really are about wanting to defend what they hold dear, or whether they prefer playing divisive games.

Monday, 2 October 2017

Too low for zero?

There’s a growing interest in non-alcoholic and low-alcohol beers, or “NABLABs”, with an increasing number of modern craft brewers getting involved in the sector. However, it seems to me that much discussion of the subject ends up grasping the wrong end of the stick.

The fundamental point of beer is that it contains alcohol. Yes, it may be tasty, it may be refreshing, but even the most inoffensive mild or light lager will have something of an effect on you. If it didn’t, you wouldn’t drink it in the same quantities, or on the same occasions. Take away the alcohol, and it loses its raison d'รชtre. However flavoursome it is, it’s never going to be quite the same as a normal-strength beer, and is always going to be regarded as something of a distress purchase on occasions where for whatever reason an alcoholic drink is ruled out. Alcohol, even in small quantities, also always adds something to the essential character of a drink. It is never just about the flavour.

However, adults consume soft drinks on a wide range of occasions when they’re not thinking to themselves “all things being equal, I’d really rather be having an alcoholic drink now”. So NABLABs should really be seen as an alternative to conventional carbonated soft drinks, not as something that is always going to be a pale imitation of beer. I understand that, in Germany, alcohol-free beers are much more widely consumed and accepted on “soft drink occasions” than they are here.

Added to this, most standard soft drinks, even the sugar-free ones, are extremely sweet. Many people don’t necessarily want something so sickly, and so a drier alcohol-free beer may well appeal. There may also be more opportunity to introduce the unconventional flavours that often seem out of place in normal beers.

The way to present them should be as a superior, more mature alternative to standard carbonated drinks, not as just an emasculated version of normal-strength beer. Maybe, if you’re in Spoons, consider having the Beck’s Blue rather than a Coke as part of your soft drink meal deal. But, realistically, they’re never going to attract anything like the same level interest and connoisseurship that alcoholic beer does.

Friday, 29 September 2017

The premium pint

The latest version of the annual Cask Report has been published this week. There’s a lot to digest in there, and I’m not proposing to do a general overview of its findings. So far, I’ve not noticed that anyone else in the blogosphere has done so either.

However, one section that caught my eye was that on trying to achieve premium pricing for cask beer. This seemed rather unfortunate timing in a week where “pub drinking is becoming increasingly unaffordable” was a major news story. And, as I’ve often argued before, you can only justify a premium price if you can consistently deliver premium quality which, as the report argues elsewhere, remains a major problem for cask.

Within the cask sector, there seems to be a pretty much total inability for individual beers or breweries to command a price premium over others of the same general strength and style. If you look at the wine list in a pub, some wines will be half as much again as others, or more. But all cask beers of the same strength will be much the same price, even though it’s accepted that some are intrinsically far better than others. All other categories of drink can manage this, and indeed consumer goods in general, so why not beer?

Whatever cask drinkers are willing to pay for beers of a high (or highly perceived) value, there is still a place for one or more beers at an entry level price point – equivalent to a standard lager. Depending on style, abv, scarcity and provenance, there may then be the opportunity to flex the price of other real ales on the bar.

Any standard strength brand viewed as premium in character should be able to sustain a price above that of a standard lager. Well respected, premium strength cask ales should bear a price point at least equivalent to a premium lager.

Artisanal, top-of-the-range ales that are high in strength, unusual in style or with particular points of interest have the potential to sustain a much higher price, and may be promoted in smaller measures, such as third of a pint.

A major factor in this, of course, is “rotating guest beer syndrome”, which presents cask beer as a homogenous, disposable, interchangeable commodity product. You’re only going to be able to command a premium price for your beer if it can be a permanent fixture on the bar, so drinkers get to know it and recognise that it’s something worth paying a bit more for. And even the finest beer in the land can be turned into unappetising slop by poor cellarmanship.

Plus, when by far the biggest single retailer of cask beer sells it at bargain basement prices, and tends to have a uniform price point across a wide range of producers and strengths, trying to position it as a premium product, or differentiate sheep from goats, comes across as swimming against the tide.

Tuesday, 26 September 2017

Corporate indigestion

Following last year’s exercise in shooting themselves in the foot, this year CAMRA were more on target with their Good Beer Guide press launch, which concentrated on the threat to consumer choice from takeovers of independent breweries by multinationals. However, even this was a little wide of the mark, as the breweries being taken over have in recent years tended to be those in the “craft” field rather than producers of real ale.

It also contains an element of railing against fate. It’s simply a fact of business life that the most likely fate of a successful start-up is to be taken over by a larger competitor. Yes, of course in a sense it’s regrettable, but that’s just what happens. Very few go on to spread their wings and fly independently in the way that BrewDog has done. And, of course, in many cases the business owners will in effect have been made an offer they couldn’t refuse.

The current wave of takeovers are significantly different from those that occurred in the British brewing industry in the 60s, 70s and 80s. Then, the prime objective was to get hold of smaller competitors’ tied estates and distribution networks. Promises may have been made about maintaining production at original sites, and keeping brands going, but they were rarely worth the paper they were written on.

The current ones, however, are about acquiring beer brands, not outlets, and so there is much more of an incentive to maintain the brand equity. Inevitably in many cases it will end up being eroded over the years by changes in recipe and production methods, but if they’re not careful the buyers end up destroying the value of their own purchase. I also can’t help thinking that the takeover of a business that has been established for several generations and become part of its local community is much more of a loss than that of a start-up only a few years old.

There is a somewhat patronising aspect to Roger Protz’s comments. I don’t see that there is a conscious intention to deceive drinkers that they are buying products from a small, independent company, and consumers nowadays are sophisticated enough to understand that large companies operate niche or specialist offshoots that are differentiated from their mainstream products. Those to whom it really matters will know anyway.

There’s also evidence from the US of a consumer blowback against the brands taken over by multinational brewers. As the two beer markets are very different, it’s doubtful exactly how much this will read across to the UK, but it certainly suggests that some of the inflated premiums paid for craft beer brands will become a thing of the past.

Brewing remains an industry where the barriers to entry are very low, and thus we are likely in the future to see the cycle of cool new start-up turning into corporate acquisition over and over again.

Sunday, 24 September 2017

Survival of the fittest

Although the pace has slackened a bit in the past couple of years, pub closures are still very much with us. It seems that, whenever a pub closes, someone will say “Well, it wasn’t much cop, anyway, was it?” Apparently, it’s only the crap pubs that close, and good ones have nothing to fear. Well, in a sense that is true. In an environment where the supply of pubs exceeds the demand, inevitably it’s going to be the less well run pubs, those that don’t appeal enough to potential customers, that fall by the wayside. But it’s confusing the particular with the general.

Looking at the wider picture, the overall demand for what pubs offer has significantly declined over the past couple of decades. Obviously that is going to lead to closures, and by definition it’s, broadly speaking, the worse pubs that will close. But that doesn’t mean they’ve closed because they’re bad. The number of closures is determined by the general demand; the specifics of the closures by pub quality. As I wrote here, even if all pubs achieved the standards of the best, it wouldn’t in practice have knocked more than a couple of percentage points off the total number of closures. Back in the 1970s, the average quality of pub was probably much worse than it is now, but they did a lot more business.

There are also other factors at work, the most important of which is location. Indifferent pubs will survive in favourable locations, while with the best will in the world good pubs will struggle in places where the local demand has fallen off a cliff. Some pubs will fall victim to compulsory purchase schemes that are no fault of their own. Some will have much more redevelopment potential than others, and there’s also the willingness of the pubs’ owners to sell them off for alternative use. There may also be factors that encourage long-term loyalty amongst customers even if the current offer is indifferent, including, for example, association with a particular group who regularly meet there, or having historical interest.

As a general rule, there are few pub closures that truly come out of the blue, where you say “Wow! I really didn’t see that coming!” To be honest, as I’ve written before, some pubs have the “smell of death” about them for some time before closure. On the other hand, plenty of pubs seem to stagger on for years without having much going for them because there’s little appetite to develop them into something else, smaller landlocked pubs in run-down secondary shopping areas being a particular case in point.

It’s rather like the oft-repeated mantra that “there are no dangerous roads, only dangerous drivers”, which really is one of the most unhelpful messages ever put out on the subject of road safety. Of course, in a narrow sense, the vast majority of road accidents, excluding those caused by mechanical failure, are the result of road user error. But statistics show that there are some locations, and stretches of road, that see far more accidents than others. This isn’t because road users are suddenly possessed by some kind of mania, but because they offer much more potential to make mistakes and are less forgiving when people do.

So, while the ability of individual road users shouldn’t be ignored, very often eliminating causes of risk. making roads more self-explanatory and mitigating the consequences of error are the most effective ways of reducing casualties. A prime example of this is installing central reservation crash barriers on motorways, which it may astonish younger readers to learn were unknown in the eary 1960s. Saying “only bad drivers have crashes” is no more useful or accurate than saying “only bad pubs close”.

Friday, 22 September 2017

Speaking up for drinkers

It’s an unfortunate fact of life that it’s always easier to drum up support for banning or restricting something than leaving it alone. One side can conjure up a righteous froth of indignation, whereas its opponents have to resort to arguments like “it’s not that bad really”, “people have been doing it for years”, “some people quite enjoy it” or “it provides jobs”. The defence of liberty, by its nature, often involves the defence of the mundane or even the somewhat distasteful. Added to this, people often lazily assume that government or industry will do the job of opposing curbs, so they don’t need to do anything themselves.

This is amplified by the often-heard assumption that anyone opposing restrictions is by definition a corporate shill, or pursuing a particular ideological agenda. How can any right-thinking person really be against this? This is especially prevalent in the sphere of lifestyle regulation. Regardless of the truth of the message, any industry association immediately leads to it being dismissed out of hand. Just try Googling Enstrom and Kabat.

So it’s welcome news that a new pressure group called Drinkers’ Voice has been set up to counter the exaggerated and often hysterical messages about the dangers of alcohol emanating from the public health lobby, and to urge a sense of proportion. Most notably, there is a huge weight of evidence that moderate drinking produces better health outcomes than total abstention, which you really wouldn’t get any sense of from following alcohol-related media stories.

Drinkers’ Voice as a matter of policy does not accept any industry funding, to ensure both the reality and the perception of independence. It speaks for the consumers of alcoholic drinks, not the producers. What it does have is a certain amount of involvement from CAMRA, which has led some to conclude that it is effectively a CAMRA front organisation. My understanding is that CAMRA is providing some seedcorn funding and start-up assistance, but the intention is very much that it should take flight as a fully independent body.

In recent years, there have been several motions passed at CAMRA AGMs urging the organisation to take a stronger line against the anti-drink lobby. However, CAMRA by definition does not represent all drinkers, and can all too easily be accused of glossing over the negative effects of alcohol in seeking to promote beer and pubs. There also remains a somewhat delusional tendency within its ranks who believe that the type of drinking that CAMRA supports can in some way be presented as less harmful. So the decision was taken that the objective could be better achieving by helping with the creation of an independent campaigning body.

The public health lobby are often portrayed as plucky Davids standing up against the self-interested Goliaths of the drinks industry in the interests of ordinary people. However, as the saying goes, the road to hell is paved with good intentions, and the view that ordinary people are weak, gullible saps who need to be protected from their own base instincts is hardly an entirely benevolent one. It is well summed up by this quotation from C. S Lewis:

Of all tyrannies a tyranny sincerely exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.
It is true that alcoholic drinks have not suffered anything like the legal and fiscal assault that has been experienced by tobacco. However, the duty escalator which was in effect for several years should not be forgotten and, while it now seems to have run out of steam, a few years back there was concerted government encouragement to reduce the strength of many popular beers and ciders. And one of the most effective attacks on the drinks trade has proved to be something that ostensibly targeted something else entirely, namely the smoking ban.

The past couple of decades have also seen an increasing trend to undermine the social acceptability of the regular, moderate drinking of alcohol, especially in out-of-home locations. This has been reflected in a marked decline in average consumption even without the assistance of punitive legislation, which has particularly affected younger age groups. This may well create the climate for more tangible restrictions in the future.

So, to sum up, Drinkers’ Voice is a much needed and extremely worthwhile endeavour. I urge you to give it your support and, if you can, bung them a donation too, as I have done.

Friday, 15 September 2017

Standing at the crossroads

Outgoing Good Beer Guide editor Roger Protz has called for CAMRA to embrace craft keg beers to ensure its survival into the future. It is certainly a widely expressed view that CAMRA needs to widen its original remit and, in effect “modernise or die”.

However, this raises a number of questions. The first is exactly what he means by “embrace”. It is one thing to accept that many beers that fall outside the definition of “real ale” have considerable merit, and few except a handful of diehards in CAMRA would disagree. The organisation should certainly be a lot more relaxed about praising non-“real” beers and ciders in an official context.

But to actually bring quality craft keg beers within CAMRA’s campaigning remit is something else entirely. For a start, how do you define them? Some people have suggested that you don’t really need to, and you know what is good and what is not. But you can’t seriously campaign for anything on such a woolly basis. “Real ale”, for better or worse, does have a clear-cut definition. There may be a bit of fuzziness around the edges, but broadly speaking you know what is real ale and what isn’t. Nobody can say the same about “quality keg”.

A further point is that real ale can be made by companies of any size, and indeed the old Big Six brewed some of the best real ales in the country. But, true to his Trotskyite past, there’s a lot in Protz’s interview about the threat from the giant multinational brewers, and indeed the official US definition of “craft beer” sets an (admittedly large) limit on company size. However, a beer doesn’t metamorphose overnight from good to bad purely through a change of ownership, and drinkers are unlikely to be impressed by someone judging beers on company size rather than intrinsic merit.

Closer to home, BrewDog have become a very big fish in a small craft pond, and must now exceed the production volumes of the likes of Greene King and Marston’s. Does that mean their beers no longer qualify as craft? And if they do, how about “craft” beers such as East Coast IPA and Shipyard from the established brewers?

Keg beers from the likes of Beavertown and Magic Rock are undoubtedly craft, but how about if Taylors produced a keg version of their highly-acclaimed Landlord? If that is approved, then surely that is accepting precisely what CAMRA was originally set up to fight. And if it isn’t, on what objective basis does it differ from the beers from the obvious crafties? And does that mean that cask Landlord should no longer be accepted as a quality beer either?

Maybe, of course, this is what quality craft keg needs:

There are no easy answers to these questions, but they are not things that can be airily dismissed with a breezy “you know it when you see it”. The risk is that you end up with a campaign just for “beers we happen to approve of”, which would not exactly possess much credibility. Plus there remains a lingering suspicion of a hidden agenda to cut adrift many well-known cask beers on the grounds that they commit such cardinal sins as being “popular” and “easy-drinking”.

It also has to be questioned whether the development of “beer enthusiasm” since the early days of CAMRA should be regarded as a straightforward onwards-and-upwards process. As I wrote here, in the beginning it was essentially a preservationist movement, seeking to defend a valued tradition that was seen as under threat. Over the years, however, it has grown and metamorphosed into something that would have been completely unrecognisable at the start.

It is entirely reasonable that many people are somewhat uneasy about this and feel that it has moved into territory where they really don’t want to go. It is not wrong, or stick-in-the-mud, it is just a different way of looking at things. You can’t expect everyone to be interested in everything, and just because some people aren’t attracted by something as a leisure interest doesn’t mean they disapprove of it. “Hey, I got into architecture to preserve mediaeval churches. I never thought I’d be expected to enthuse over all this weird modernist stuff”.

Plus, as Boak & Bailey have said, the British craft beer movement “rejected not only ‘mass-produced’ beer but also the trappings of established ‘real ale’ culture.” Given this, it isn’t surprising that there is a certain reluctance to embrace it. It’s sometimes argued that this is basically a generational divide that will be eroded by the passage of time, but that’s akin to the common fallacy that conservative political values will fade away as older people die off. In practice, it doesn’t happen, as each generation rediscovers them anew.

The result is to end up with two camps of traditionalists and modernists who are divided more by mutual incomprehension than dislike as such. On the one hand there are enamel-stripping DIPAs and gleaming, uncomfortable craft emporia, on the other, boring twiggy brown bitter and gloomy old man pubs. Each side just doesn’t get what the other sees in it.

A case could be made for splitting CAMRA into two separate organisations – one that concentrates on the preservation of a distinctive British tradition, the other that wholeheartedly embraces the world of modern beer innovation. There would be no reason why somebody couldn’t be a member of both – they are not mutually exclusive, just different.

In practice, though, it’s unlikely to happen as, rather like the present-day Labour Party, the risk of striking out on your own is too great, so uneasy bedfellows stay together. But, while some may claim to straddle both sides, it’s hard to deny that most people who have an interest in beer and pubs at heart identify with one camp or the other. I can think of very few whom I know either through personal acquaintance or as bloggers that I would struggle to place. No doubt in the end some kind of uneasy compromise will be arranged, but the underlying tension is not going to go away.

As an aside, later in the article old Protzy is still wittering on about “unfair competition from supermarkets”, which basically, as I explained here, is nonsense. The UK has some of the most expensive off-trade alcohol in the EU, and still has one of the highest proportions of beer consumed in the on-trade. And, realistically, there’s nothing you can do about it anyway.

Sunday, 10 September 2017

Face the facts

In response to my last post about the link between supermarket pricing and the decline of pubs, I was sent a link to a fascinating document from the Brewers of Europe showing European Beer Statistics. It relates to 2015, but as it was published in November 2016 it represents the most recent figures available.

Particularly relevant to that post is Table 6 referring to on versus off-trade beer consumption. While we may bewail the decline of UK on-trade consumption to below 50%, we are in fact well above the European average. The highest is Ireland, which despite geographical proximity has a distinctly different drinking culture from the UK, and all the other major countries above us are in the Mediterranean. To summarise some of the main results for on-trade consumption:

Ireland 67%
Spain 64%
Greece 57%
UK 49%
Belgium 44%
Italy 42%
Czech Republic 40%
Netherlands 35%
Denmark 23%
Sweden 21%
France 20%
Germany 19%
Poland 15%

It’s interesting that Germany, one of the world’s great brewing nations, and famous for its big-city beer halls, has one of the lowest figures of all. And Sweden has a 79% market share for the off-trade, despite alcohol sales being restricted to state-controlled Systembolaget shops with limited hours. (I think some low-strength beers may be sold through normal shops)

Amongst other salient figures are:

  • UK receipts from beer duty were €4.4 billion. No other country apart from Turkey exceeded €1 billion. Germany, which brews twice as much as we do, was €676 million.

  • The UK has the highest number of breweries, at 1,880. Next was Germany at 1,388, then France at 793 and Italy at 688. Belgium, known for its small breweries, is only 199. But how many of those 1,880 produce any significant volume?

  • The UK is well down the league of per capita beer consumption. At 67 litres per person per year, we are only 18th in the table. Top are the Czech Republic with 143 litres and Germany with 106 litres. Our Irish neighbours manage 80 litres. I’d guess the average strength in the Czech Republic and Germany is higher too.

  • Not surprisingly, Germany has the biggest annual production at 95.6 million hectolitres. The UK is second at 44 million (equivalent to 26.9 million barrels), but Poland, despite having only 59% of our population, is third at 40.9 million. France, despite its large population, is down at 20.3 million, behind the much smaller Netherlands at 24 million and only just ahead of Belgium at 19.8 million.

Friday, 8 September 2017

The undercutting fallacy

In their new book 20th Century Pub, Boak and Bailey, in surveying the various reasons put forward for the decline of the pub trade in recent years, refer to “Left leaning campaigners” who “decry the rapacious behaviour of the supermarkets, which sell alcohol very much cheaper than any pub could hope to achieve”. This is frequently advanced as one of the key factors behind pub closures, and has become an article of faith with many CAMRA members. But, in reality, it is at best only a very limited and partial explanation for the trend.

As I explained here, there are a whole list of reasons for the shift from on-trade to off-trade consumption, amongst which relative price is only one amongst many, and not the most important at that. In general, they can be summed up as a combination of homes becoming more attractive and stimulating places to spend time, and a growing attitude in society that alcohol consumption is something that has to be ringfenced from any form of responsible activity. On top of this there is obviously the externally-imposed factor of the smoking ban. It should be remembered that, at the time when most of our pubs were built, there was no radio, no television and no recorded music, and most homes did not even take a newspaper. If you wanted any kind of mental stimulation, there was little alternative but to go to the pub.

It is undoubtedly true that the gap between the two has widened over the years and, particularly at the margins, that must be one element behind the shift. But this is as much to do with pub prices rising above inflation as with off-trade ones failing to keep place with it. The off-trade has benefited from the economies of scale and tighter margins that come with higher volumes. On the other hand, it has to be remembered that the cost of a pint in the pub contains a much greater labour element than that of a can in the supermarket – you are in effect purchasing a service, not a product. As real incomes rise over time, it is inevitable that the price of services will rise relative to that of goods.

Going to the pub for a drink requires both a reason and an opportunity – it isn’t simply a case of choosing an option for the consumption of alcohol. In the past, it was, for many people, often a matter of ritual and routine, which has been eroded over time. As I wrote here, for most responsible people, it isn’t primarily cost that is deterring them from drinking more in pubs, it is more that the opportunities do not arise so often, and they have a general concern both for their own health and maintaining standards of behaviour. Who would honestly say that they would drink significantly more in pubs if beer was 50p a pint cheaper?

In fact, Britain, due to high duty levels, has some of the most expensive off-trade alcohol in the EU. Go to a supermarket in any of our near continental neighbours, and the beer prices will be markedly lower. The attractions of the “booze cruise” may have lessened in recent years due to exchange rate movements and domestic sellers competing by cutting margins, but the gap is still there. And the UK and Ireland still have the highest proportion of on-trade beer consumption in Northern Europe, markedly higher than France, Germany and the Low Countries which have the most comparable drinking cultures. In fact, according to the Brewers of Europe Beer Statistics publication, the proportion of beer sold in the off-trade in in 2014 Germany was 81%, as opposed to 50% in the UK. Those city-centre beer halls may thrive, but in most of the country there’s precious little bar drinking going on. It is higher in Mediterranean countries such as Spain and Greece, but that is because their climate is much more conducive to sitting outside drinking in the evenings.

Supermarkets are sometimes accused of manipulating the market for their own benefit, but in reality they can only sell what people buy, and their interest is solely in maximising sales and profits. Any “agendas” are those imposed on them by government and public health lobbies. Yes, the interaction of supply and demand is a complex process, and it isn’t just a case of sitting back and waiting for people to ask for things. They try various new products and formats, most of which fail, but some succeed and end up becoming regular items on the shelves. That is decided by the customers, and at the end of the day people can’t be forced to buy anything they don’t want.

Two of the necessary preconditions for a mass off-trade beer market are home refrigeration and widespread car ownership. Without a car, it’s hard work lugging a slab of Carling home, and serving it up at room temperature isn’t going to be too appetising. I’d say that most working families ticked both boxes by the mid-Seventies, but it was only with the spread of big out-of or edge-of-town supermarkets in the 1980s that the floodgates really opened. In the 1970s it was often a case of going into the town centre and struggling to find a parking space to do your weekly shop. In the past, Davenports Brewery of Birmingham were known for their “beer at home” service but this, while it ticked over, never became a roaring nationwide success. I don’t know how their prices compared with those of pubs at the time, but possibly the refrigeration issue was one factor holding it back. Nowadays, of course, with the spread of online ordering and delivery, the car ownership aspect is becoming less important.

In some quarters, the actions of supermarkets are seen almost as a malign conspiracy to deliberately undermine the pub trade. However, all they are doing is engaging in the normal behaviour inherent in a competitive market – the free exchange of goods and services between willing seller and willing buyer to the mutual benefit of both. If they for whatever reason decided to hold back, then someone else would step into the breach. If you don’t like the prices Tesco are charging for drinks, have you seen how cheap Aldi’s own-label products are? Patterns of customer demand change with the passage of time and it’s simply a fact of life that there will be winners and losers.

You also don’t hear restaurants complaining about the unfair competition from ready meals, even though the supermarkets enjoy a further cost advantage here as they don’t pay any VAT on them. If the “cheap supermarket alcohol” argument for decline really held true for pubs, then surely it would also apply to restaurants.

Another charge often levelled at supermarkets is that they routinely engage in loss-leading on alcoholic drinks as a means of enticing customers through their doors. However, as I argued here, while I’m not saying it never happens, it would make no sense whatsoever to sell at a loss something like a slab of lager that may make up a substantial chunk of someone’s shopping bill. Yes, of course they achieve keen prices by driving a hard bargain and cutting margins, but it would make for very poor business to actually sell at a loss. The most likely situation when you might encounter it is selling off surplus stock.

It should also not be forgotten that the growth of large supermarkets has brought major benefits to consumers. They have helped people’s budgets by using their buying power and economies of scale to cut prices, something that is also encouraged by keen competition between them. They have provided shoppers with an unprecedented variety and quality of food, especially fresh produce. And they offer extended trading hours which recognise the reality of modern life where two-earner households are the norm and working hours are less and less standardised. The old model of shopping seemed to be based on the assumption that households contained a non-working housewife who had the time to traipse around a variety of local shops on a regular basis to buy something for tea. And, if both partners worked full time, they were left with no alternative but to engage in a frantic scrum on Saturdays to get all their shopping done.

Even if you accept that the argument has some validity, it’s hard to see what in practice could be done about it. The horse has bolted now and the position of supermarkets in the alcohol market is well established. Possibly, if you went back forty years, you could have implemented a much stricter licensing regime for off-trade alcohol, with severely limited hours and requiring alcohol to be sold at separate counters, if not in entirely separate shops. But, given all the various wider factors leading to a growth in demand for take-home alcohol, it would only have slightly held back the trend rather than stopping it from happening. Sweden restricts alcohol sales to state-owned shops with limited hours, but I’d expect that it has still experienced much the same switch in recent decades, and the statistics I linked to above show that the off-trade has a 79% share of beer consumption. In any case, availability tends to follow demand, not create it. In recent years, we have seen a distinct fall in overall alcohol consumption despite a more liberal licensing regime for both on and off-trades, and in the 1970s pubs did a lot better than they do now despite being closed for three hours every afternoon and five hours on Sundays.

Alternatively, you could try to narrow the gap by artificially inflating the price of off-trade drinks. An obvious means of doing this would be Minimum Unit Pricing, which has been widely discussed in recent years although not so far implemented. However, as far as I’m aware, the key justification put forward for this is to attempt to address problem drinking by raising the price of the cheapest drinks. It isn’t claimed to be a method for shifting the balance of consumption to the on-trade. And, if you think about it, the argument makes no sense, as Christopher Snowdon points out here. It wouldn’t reduce the price of beer in pubs, and would give people no extra money to spend in them. Indeed it might lead to them spending less as household budgets were squeezed. And is it really credible that, if you increased the price of the cheapest can of Carling from 50p to 88p, people would then rush to the pub to buy it at £3.50 a pint? It’s just something latched on to by people who foolishly believe that anything that damages other sections of the drinks trade must benefit them. Plus, the further you increase the price of off-trade alcohol, the more problems you have with black market selling and illegal distilling.

The conclusion must be that “undercutting by supermarkets” is something that only plays a very limited role in the long-term decline of pubs, and certainly doesn’t give any guide to future policy. It is something that conjures up a sepia-toned vision of an age when you went for a knees-up in the street-corner local, got in a couple of bottles of Emva Cream and Vat 69 for Christmas from the outdoor, and where the missus trotted round the butcher’s, baker’s and greengrocer’s several times a week to feed the family.

Of course in a sense it is sad to see the pub trade so much diminished, but it is social and legislative change that have brought that about, not competition from Tesco. Supermarkets have responded to that change, not created it. Pubs have no hope of ever being able to remotely match the off-trade on price, especially given the ever-increasing cost of labour, so, rather than moaning that life is unfair, they need to concentrate on giving customers something distinctive for which they are willing to pay a premium. The business of pubs is hospitality, not just selling alcohol.

Monday, 4 September 2017

What goes around, comes round

Hard on the heels of Heineken’s acquisition of Punch Taverns comes the news that Admiral Taverns is being sold to C&C Group, owners of Magners cider and Tennent’s brewery in Scotland. This represents a further unravelling of the industry structure created in the wake of the 1989 Beer Orders, and leaves Ei Group, formerly Enterprise Inns, as the only non-brewing pubco with over 500 pubs still standing.

In reality, the large tied pub companies were only ever created as an expedient in response to the regulatory framework set up by the Beer Orders. Take that away, and they lose any rationale. It has taken a long time since the orders were revoked in 2003, but it was always going to happen in the end, especially after the pubcos ended up in dire financial straits after the financial crash and their disastrous misreading of the impact of the smoking ban. You have to wonder whether the other big brewers are now casting their eyes over Ei Group.

The vociferous anti-pubco campaigners have always been strangely reluctant to put forward any alternative ownership structure for the industry. They seem to have a naive, pie-in-the-sky vision of pubs all being independent freeholds. But, of course, in the real world, that isn’t going to happen, and it would leave the pub trade fragmented and starved of investment capital. The same would be true if pubs were owned by property companies whose only interest in them was collecting the rent.

Provided that there are adequate safeguards against the creation of dominant market positions, either nationally or locally, I really see no problem with pubs returning to the hands of breweries. Indeed in a way it will help safeguard their future, as their owners have a direct interest in maximising their commercial returns by selling their own products, which would not be the case if they were seen only as a financial investment.

The Beer Orders are likely to go down in history as one of the most disastrous and ill-considered interventions in an industry by any British government. As the famous economist Milton Friedman said, “The government solution to a problem is usually as bad as the problem itself”.