Thursday, 29 March 2012

Breaking the barrier

I’ve been in a growing number of pubs recently where I’ve been charged over £3 for cask beers of ordinary strength, around 4% ABV. That included one occasion when the price was a ludicrous £3.01. After the duty rise in the Budget, the £3 pint will become much more common.

I’m old enough to remember when people said “drinkers will never stand for paying a pound a pint”, and then the same was said for two pounds. Of course they did, but each time in somewhat smaller numbers.

I’ve seen a few posts in the blogosphere where price has been dismissed as something of little importance, and comments have been made along the lines of “it’s worth paying more for really good beer.” However, unless you’re rolling in it, or only drink a couple of pints a week in the pub, price is not something that can be ignored. Most people have, to a greater or lesser extent, a limited budget and have to juggle and trade off various priorities in their lives.

I have to say £3 rather sticks in my craw and makes me think whether I should have a half or a pint less than I really wanted. I also have to question whether I can justify paying that, or nearly that, in a Robinson’s or a pub company pub, when in the local area I can be paying £2.15 for Holts, £1.99 in Spoons or a mere £1.60 for Sam Smith’s. (Those are pre-budget prices, but they’re unlikely to be more than 10p higher now).

I remember when I first moved into this area at the end of 1984 that a pint of bitter tended to be around 60p. Between February 1985 and February 2012, the Retail Prices Index has increased by 161%. So the 60p pint, had it gone up in proportion to the RPI, would now be £1.57. However, in fact it’s more like £2.80, a rise of 367% rather than 161%. It’s not that off-trade alcohol has become cheaper in real terms, but that the on-trade has become much dearer.

22 comments:

Cooking Lager said...

Haven't you read the beer blogs? 9 quid for a small bottle of wince inducing IPA is “exceptionally good value” and we all ought to be willing to pay more to support beer and pubs because it’s a movement not just a product.

Ask yourself this. If you earned minimum wage stacking shelves in Tesco, would a pub be a place you’d regularly drink in?

50 years ago the lowest paid enjoyed pubs, now they may go out on Saturday but the bulk of their consumption is off trade. If they preload, they do so because they cannot afford to drink all night at on trade prices.

Drinking is a wealth, class & income based issue and those supporting minimum pricing are on the wrong side of it.

As for making pubs more affordable, the existence of Sam Smiths & Spoons is proof that others are stinging us.

Steve Lamond said...

I've always translated my hourly wage into how many pints I've earnt, though now I'm salaried its a bit harder to work out. I have more income than I did a few years back, but aside from the ocassional exotic bottle (no more expensive than a mid-range wine) my consumption hasn't changed all taht much, except of course its bottles at home rather than pints out. Not for price reasons, just that there's no cask ale round here! I still hate finding the price of a pint above the average I've seen elsewhere, I've certainmly seen a premium in pubs tied to punch/enterprise as opposed local freehouses. Sometimes up to 50p difference on the same beer.

Tandleman said...

"Between February 1985 and February 2012, the Retail Prices Index has increased by 161%. So the 60p pint, had it gone up in proportion to the RPI, would now be £1.57. However, in fact it’s more like £2.80, a rise of 367% rather than 161%. It’s not that off-trade alcohol has become cheaper in real terms, but that the on-trade has become much dearer."

It is fairly easy to understand why PubCo prices are so high considering the crippling debt they have engineered since their inception. What is less easy to understand is why other pubs are so expensive, unless of course we know how much the wholesale price of beer has gone up over the same period.

These are murky waters, but Cookie is right and wrong in this sentence "50 years ago the lowest paid enjoyed pubs, now they may go out on Saturday but the bulk of their consumption is off trade. If they preload, they do so because they cannot afford to drink all night at on trade prices." It was much less than 50 years ago. More like 20. Perhaps less. Then of course the difference between on and off trade was pennies. Then of course big brewers owned most of the pub and they had no inclination to undercut their own business by selling cheap to supermarkets.

In both cases the beer orders have a lot to answer for. Be careful what you wish for. I feel a beer orders blog post coming on.

wowninjas said...

I think you may even understate the problem; even in my moderate 5 or 6 years of drinking I remember the wholesome £2 pint in and around my parents home town. Now as you've pointed out you'd be pretty hard pushed to find anything under £3. I think the prices have only really rocketed in the last 5-10 years. It's even worse in the South East, I've noticed that I have begun to say things like "£3.70 for a pint, that's reasonable".

Curmudgeon said...

Part of it is due to the rising relatively cost of labour. As living standards rise over time, then inevitably services will rise in price relative to goods as they have a greater labour content. And a pint in a pub, and a meal in a restaurant, are as much a service as a good. On the other hand, it's doubtful whether bar and kitchen staff have actually seen that much rise in real wages.

Also, it's very easy to get into a cycle of saying "we have to cover the same overheads on lower sales volumes, so we'll put the price up a bit more than inflation to compensate." It may work in the short term, especially when times are good, but eventually it will come back and bite you on the bum.

Spoons, whatever their faults, show it doesn't have to be like that, though.

Cooking Lager said...

I accept Tands corrections. If it is 20 and not 50 years, well Tand has been boozing since the rest of us wore short pants.

To respond to Steve. Affordability is a difficult one for me too. How many pub pints I got for an hour’s work (gross) when I was an unskilled student temping was greater than how many you get for the current gross minimum wage. Down from 3 to 2. The price of off trade booze is unchanged and the minimum wage would buy nearly twice as much.

However, post university; I (like most people) earn multiple factors of minimum wage. But I also have costs I didn’t have. I didn’t used to own a house or a car. Even so pub prices are for me more affordable than they were back then. The appeal of heavy drinking is somewhat reduced, though, as I want to tidy the garden up on Sunday morning.

My point is that increased affordability is not true for most people. Most careers plateau at some point and a salary ceases to increase beyond general wage inflation. There are more jobs at the bottom than the top and not everyone gets to be CEO. Therefore pub prices rising above wage inflation mean everyone at some point will notice pubs becoming less affordable. The retired and those in the 2nd half of their careers. I will too notice pub prices becoming less affordable and my use will either reduce or other things will take the hit depending on the utility I place on a trip to the pub.

As for the reasoning, the existence in the market of pubs charging reasonable prices indicates an issue with those that do not. Property companies have screwed the sector for sure and governments have hiked tax but a factor in those more reasonably priced outlets is that they do not operate on 50% GP.

80% of a packet of fags is tax. The tax increases above GP but the none tax element increases at RPI.

RedNev said...

I pretty much agree with everyone here. The prices in pubs are becoming unaffordable for increasing numbers of people. It is the high prices in pubs, not the cheap prices in supermarkets, that are driving people away from pubs, and this is why CAMRA's support for minimum pricing is so wrong: making off sales dearer won't knock a single penny off pub prices.

I remember a few years ago at the CAMRA AGM, an emergency motion calling for a cut in duty of a penny a pint was proposed with the mover asserting it would encourage people back into pubs, which is self-deluding twaddle. I spoke against it, which was received in stony silence, which I thought was quite funny really, but sad at the same time, as it showed how general the delusion was.

Steve Lamond said...

On principal I think beer should be affordable for people that want it. So even if i know I can afford it, I'm still saddened when I see over the odds price increases, because as you say, it will price people out of going to the pub or feel they have to cut short their pub time.

Curmudgeon said...

A lot of people are, with justification, complaining about the price of road fuel at present. Being a bit of a saddo, I have kept a detailed record of fuel prices and consumption since the early 80s. At the beginning of March 1985, I paid 42.8p/litre. The latest price was 139.9p/litre, a rise of 227%. Which pales into insignificance beside the 367% rise in pub beer prices!

Tyson said...

When beer hit £1 a pint, I confidently predicted that no one-including me-would stand for it. And here I am, many years later, paying £3.40 in the centre of Manchester. I think it's a very valid point, that needs reinforcing, that it's the shocking increase in on-licence prices that is the problem.

westcoast2 said...

If the price of a pint ranges from £1.60 to £3.01 and price is a major determining factor then surely people will migrate to the cheaper pubs. Has this been the case?

Pre-loading could be seen as a reaction to price. Is it really? What draws people to a particular venue? Is it price or 'atmosphere'? Also, there maybe two types of pre-load, 1) Off sales 2) Cheaper pub.

If the price increases in your 'local' , do you migrate, pre-load either via off-sales or by visiting a cheaper pub first or stay? The likely hood is either you reduce the amount you drink (slightly!?) or drink the same and forgo something else but you remain at your current watering hole. Some may do a mini crawl (preload 2) to end up in their favourite pub at the end of the evening.

Perhaps, if the price of the local increases excessively, some may drift away until this local loses its appeal. Some of the drifters will have discovered a new venue of better value and as others join, you join too, this then becomes the new local. There may also be a case where someone just wants to try somewhere else for a change and even though the price of beer maybe higher this still becomes the new local. Ultimately as the pub experience goes, so go the people.

If, of course other venues do not or can not provide value or a conducive atmosphere then this drift will result in a loss of trade to any pub.

Why do people do this? I submit, despite what the the connoisseurs of ale, CAMRA, seem to think, Ale and Price are not the biggest determining factors for most and further submit atomosphere ('the pub experience' if you will) and value (to you, in whatever way you define it) are big determinants. Why else would people pay nightclub prices?

/old fogey speak on
I remember the old days when men would sit in the corner playing crib or dominoes moaning that the tax man had put 1d on a pint while dodging stray arrows from the dartboard. Yet they stayed and were there the next day, the next year, paying the increase and saying strange things like "and one for his nob".
/off

Curmudgeon said...

Yes, pubs are far from homogenous and there are many factors determining which pub you visit beyond price. However, it is very clear that in town centres, where there is much more competition close at hand, Spoons are busy and the pubs charging a pound a pint more are either quiet or closed, unless they have some special USP in terms of atmosphere.

Also, it is clear that you can't keep increasing prices above inflation with impunity.

People who are just going to the pub for a meal and having one or two drinks will be much less price-sensitive than those who are regularly going drinking in pubs.

Martin, Cambridge said...

Agree entirely, Curmudgeon, and I save 60p a pint on Cambridge prices when I reach Stockport.

I can't work out how Sam Smiths manage decent beer in pleasant pubs for £1.70 or so; it's not because they (allegedly) insist on frothy heads or don't put their name on pub signs, is it ?

Curmudgeon said...

They're a privately-owned company, so don't have to answer to anyone else for their results. All their pubs are managed, and all their products are own-label. They don't really seem to buy in anything. Plus I don't think the managers get paid very much.

And, while you or I may find it much more congenial than some trendy pastel refurb with sofas and posing tables, a lot of the decor in their pubs is a bit frayed at the edges.

Anonymous said...

I find it difficult to comprehand how normal intelligent men and women still frequent overpriced sad holes like the average pub
Of course the low life have little else to spice
their miserable existences, wierdos and loners
need somewhere to haunt and outcasts a place to
harvest attention
Someone mentioned 'Spoons,for heavens sake,they
are'nt PUBS they are Istitutes for the Unwanted and Undead.
Anyone care to suggest a "normal" pub with normal clientele selling normal ale at normal prices within a 10 mile radius of Glossop
Dont all rush at once

60's fan

realalemike said...

I too feel uneasy about paying £3 or over for average strength beer - I'm not keen on paying more for any beer to be honest but have occasionally accepted that in some tourist hotspots eg the Lakes, I'm on holiday and will pay a bit more without too much fuss, if the beer is spot on. Here on the Wirral I was mugged for £3.35 for a pint of Landlord last weekend (and that in a privately owned freehouse!)-I won't be ordering another one-in fact I'll only frequent said pub (my local and a favoured pub) because they sell a couple of other beers at a lower price. The following day, in a pubco pub a mile away from the first, I had a (better) pint of said Landlord for £2.80. Interestingly, I was in Huddersfield the other week and it was noticeable that the prices were generally 40 or 50p a pint cheaper generally (altho' some of the stronger beers were commanding a hefty premium)-is this a case of competition driving down prices, or is the area historically cheaper (for example as Manchester has been considered in the past)?

Anonymous said...

I haven't seen a pint for under £3 for years. Think yourself lucky. Mind you many of the pubs on the South coast are empty or closing. Wonder why?

Bill said...

Here in Bristol, £3-odd is pretty much the norm although there are wide variations. A pub not far from where I live sells Butcombe (a good local brew) at an eye-watering £3.65 a pint, probably more now since the Budget. However, walk for 10 minutes to the next pub and the identical beer is on sale for £2.65. My local's cheapest bitter is £2.70, which includes the Budget increase. In the city centre, there's a pub which will sell you a perfectly acceptable bitter for £1.89 (and no, it's not Spoons or Sam's)

Martin, Cambridge said...

In response to (annonymous) 60s fan, the Crown and the Globe in Glossop itself both meet your criteria, though views on the Globe's home-brew are variable.

Curmudgeon said...

I'm pleased to report that the Holts pub in question has only put its bitter up by the bare minimum - from £2.15 to £2.19 - so still represents very good value locally.

wee beefy said...

Beat me too it Martin - I too was thinking Globe. Not been in for yonks what with it being a long way from home but remember their own brewed stuff being very competitive. I concur your suggested concerns over the quality though, to the point that the best Globe beer I had was in the Blake in Sheffield....

Martin, Cambridge said...

Thanks wee beefy - never heard of the Blake before, sounds worth a try.

NB I actually thought the darker Globe beer in it's home pub was excellent (as was the bargain food).