Thursday, 2 February 2012

Cheaper = better?

Boak and Bailey recently made a post about the relationship of price and quality for beer. I made an observation in the comments that, thirty years ago, there was broadly speaking an inverse relationship between the two in the British beer market. Things were very different from today, with 90% of beer sold in the on-trade, a high proportion of that in brewers’ tied houses, and only a tiny handful of early micro-breweries.

There were exceptions, but as a rough generalisation the better beer was made by the smaller independent breweries, not the national combines. For various reasons, such as not needing to answer to the stock market, lack of vandalism investment in their pubs, and a lingering perception that they were selling a crude, unsophisticated product, their beers in their own tied houses tended to be noticeably cheaper than those of the “Big Six”.

So, for example, Boddington’s and Holt’s around here offered notably good value, Nottingham, where Home and Shipstone had a substantial presence, was an oasis of low-priced beer, and the Black Country, which was Banks’s home ground and also had Batham’s, Holden’s and Simpkiss, was markedly cheaper than neighbouring Birmingham where Ansells and M & B ruled the roost. Donnington pubs in the Cotswolds were remarkably cheap compared with anything around them (as to some extent they still are today), and I remember being gobsmacked by the low price of the home-brewed beer on my first visit to the legendary All Nations in Madeley, Shropshire.

Things have changed dramatically since then, of course, but even today it’s still far from axiomatic that, in pubs, paying more for a pint will result in better beer. Price differentials exist between different pubs, and different beer categories in pubs, but, at least within the cask sector, there’s little evidence of specific beers being able to command a price premium over others of the same strength and category on the same bar. This is perhaps more true for lagers where Beck’s Vier sells for more than Carling and Peroni for more than Stella.

7 comments:

  1. It was a good comment too. Sorry if it got overlooked slightly in the who ha, but was enjoying the whole "beer for knobs" reaction. Drinking is a political act, has been for centuries. Many don't accept that, though price is at the front of the political issue of alcohol.

    Many beer enthusiasts appear childless professionals with a disposable income to enjoy the exotic and thus can be forgiven slightly for nonsense such as “At 9 quid a bottle it was exceptional value” or “at 4 quid a pint it was superb value”

    A pub landscape that caters only for the customer with more money than sense is a much smaller pub landscape than currently exists, and if that is the only market we are indeed over pubbed. A pub landscape that caters for all customers including those seeking value and lower prices is a pub landscape with far more choice, more niches and more political protection. Strength is in numbers.

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  2. Yes, it was an interesting observation. Ditto with the apologies.

    It's still the case now that places which brew their own and have a brewery tap seem to be able to offer it at remarkably low price: £2.50 a pint for beer from the new Crown Brewery at their tap in Penzance, as opposed to about £3.20 for a pint of Tribute in any of the nearby pubs; and £2.60 for a pint of Potion 9 at the Star Inn, Crowlas.

    So, there are tons of exceptions, but the correlation between price/quality, however broad, does exist, doesn't it? Especially right at the bottom of the price scale with super-value brands. There's no way to achieve the very lowest prices without cutting corners somewhere. (Often tiny little bottles or reduced alchohol content in the case of supermarket beer.)

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  3. The off-trade and on-trade are very different markets, and different pricing methods apply.

    But, I would say in the off-trade, there are broad groupings of "cheap stuff that may be a bit crap", "mainstream stuff" and "expensive stuff that sells to aficionados".

    In all the supermarkets, the vast majority of the premium bottled ales sell for much the same price, despite major differences in strength (3.6% vs 6.5%) and beer geek credibility.

    In the on-trade I would say unequivocally that no cask beer reliably commands a premium over others broadly of the same strength and style.

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  4. True. I can only think of Sam Smith's Old Brewery as an example of a weirdly outlying, consistently low-priced bitter. (As opposed to beers which are only particularly cheap when in JDW.)

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  5. In their more traditional pubs, Holt's are still some way below the market norm, although less so than they used to be. Ditto Lees. And Donnington, which I mentioned in the post.

    In general, the main factor determining cask beer pricing is not the beer as such but the type of pub. Interestingly, the Magnet, which is Stockport's premier specialist beer pub (although still essentially a "multi-beer freehouse" rather than a "craft beer bar") is typically 20-30p a pint cheaper than Robinson's flagship pubs the Arden Arms and Red Bull.

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  6. Also location. The smart end of town supports a higher price than the rough end.

    That's if Stockport has a smart end.

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  7. Sorry if this is stating the obvious, but in the average decent pub (not your specialist beer bar but a place with a couple of decent cask beers alongside the usual keg suspects), it is surely true that the cask sells at a discount to the keg.

    London Pride or Landlord costs less than Carling (or Carlsberg, or Stella, etc.) wherever you are. Now I know some will say Carling is brewed to quality, etc., and I won't dispute - but some of these cask beers are in the flavour profiles many people who are beer geeks would consider more attractive.

    So to a degree the inverse price differential for quality vs the others still exists in the average pub.

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