Sunday, 22 January 2017

Bubble heads

Yesterday at the Manchester Beer and Cider Festival I attended the Great Manchester Beer Debate on the broad subject of “The changing beer scene”. This was chaired by Peter Alexander aka Tandleman, and the panellists were beer writer Matthew Curtis, Richard Burhouse of Magic Rock Brewery, Good Beer Guide editor Roger Protz and Hawkshead Brewery owner Alex Brodie.

However, the event turned out to be somewhat disappointing, with a great deal of beer bubble thinking and detachment from reality in evidence. For example:

  • There was a disappointing amount of anti-business sentiment on view, with the pubcos denounced as “crooks” and fears expressed about the global brewers’ acquisition of craft breweries. But, at the end of the day, all pubs and breweries are going to be run by commercial operators.

  • The hackneyed and unrealistic notion that people should be expected to pay more for cask beer was trotted out yet again.

  • There was the usual dewy-eyed enthusiasm for the “controlled environment” of the pub and drawing a moral distinction between on-trade and off-trade consumption. This just plays into the hands of the anti-drink lobby, and the reality is that the trends of declining on-trade beer consumption and a growing market share for the off-trade aren’t going to be reversed in the foreseeable future. It may be regrettable, but railing against it comes across as Canute-like.

  • Allied to this, there was what can only be described as rank snobbery at the thought of people getting cans of Carling for 50p from Tesco. The plebs are getting their beer far too cheap!

  • Unfeasible panaceas were trotted out such as scrapping VAT on draught beer. Given that there are a whole list of other reasons for the decline of pubs beyond price, is cutting the price by a sixth really going to make all that much difference, even if it was all passed on to customers, which it wouldn’t be? And weren’t you just saying beer in pubs was too cheap?

  • Once again, Roger Protz advanced the canard that pubcos were happily selling off successful pubs left, right and centre for redevelopment. I’m not saying this has never happened, but it’s simply not true to say that it has been a major cause of pub decline. If that were true, the remaining pubs would be packed out. But they’re not.

  • The usual mythical view of the history of beer over the past fifty years was much in evidence. It simply isn’t true that in 1971 cask beer was on the verge of extinction and was only saved by the efforts of a handful of plucky independent brewers. Sorry, but back then the Big Six were churning out millions of barrels a year of the stuff.

    And it’s equally untrue to say “Go out of this hall and within five minutes you’ll find plenty of pubs selling great beer. You couldn’t always do that.” Forty years ago, Manchester was brimming with cask beer. In fact, especially outside the centre, you’d be much more likely to find a great pint of cask beer by going in a random pub then than you can now. You’d also be much more likely to find a pub, full stop. And you could cross the road and have a pint of cask Greenall’s in Tommy Duck’s.

Although I certainly didn’t agree with him on everything, the panellist who most impressed me was Alex Brodie of Hawkshead, who demonstrated a thorough understanding of the realities of business, and how the brewing industry has developed and changed in recent years, and talked a lot of common sense. “Cask is Britain’s Craft” – well, he’s certainly right there.

The best contribution from the floor was that of the youngish guy from West Yorkshire who pointed out that many drinkers were on a tight budget, and if you tried to significantly increase the price of cask beer they would be left with no alternative but to vote with their wallets. On the other hand, I couldn’t avoid a wry smile on hearing former hardline socialist Roger Protz happily arguing that the working man was getting his beer too cheap.

So, overall, not the most enlightening discussion, and not a single mention of the elephant in the room. Maybe they ought to invite someone like Christopher Snowdon next year to tell them a few home truths. And, as a serious suggestion, why not invite a few written questions beforehand, to ensure that a wide spread of topics is covered, rather than just opening it up to the floor?

As far as the event itself goes, it seemed to be a great success, and a number of issues from last year had been addressed, including introducing independent food stalls and increasing the amount of seating. It was good to see a dedicated bar representing the Independent Family Brewers of Britain. And I also met a couple of regular Twitter correspondents face-to-face for the first time. But nobody should delude themselves that the happy throng inside the hall meant that all was well with the British brewing and pub trades.

27 comments:

  1. As I went on Friday, I was disappointed to miss this debate but it sounds like it might have been more frustrating than useful. Excuse me for being dim on a Sunday morning, but what was the missing elephant? In terms of discounting due to too many breweries, the consumer is not getting the benefit - the savings are going to pubs and pub companies. It's clear from chatting to three of my brewer friends that discounting *is* a problem in that the already stretched outlets for their beer is reducing even further due to the "Ohh we can get beer from XYZ for £50 a cask". 2017 may turn out to be the year that those who haven't got a sustainable business model (inc. savings) really struggle.

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    1. Oh, I fully accept that discounting and cut-throat competition is a problem, but it's basically caused by oversupply. The reason brewers don't get a decent return for their efforts isn't because beer is too cheap in the pub. Markets do have a tendency of correcting such problems eventually, so I fully expect there will be something of a shakeout in the next couple of years.

      And surely you can't have been reading this blog regularly without knowing what the "elephant in the room" is. I'll give you a clue - it will be ten years old this year.

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    2. The Blocked Dwarf22 January 2017 at 13:04

      Elephant? It's a neon purple cockatrice.

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  2. I don't doubt that the smoking ban has had an impact, disproportionately on the sort of pub I'm accustomed to, but neither do I think easing or scrapping it would have much impact. The most recent closure in my area was for the same reason as all the others. Non food pubs, high rent/rates, sky high wholesale prices leading to paper-thin margins. Empty during the week.

    As far as cask is concerned , I note that quality wasn't mentioned. After Pete Brown's intervention recently Roger Protz posted this: http://protzonbeer.co.uk/comments/2017/01/16/brown-s-cask-attack-is-wide-of-the-mark

    Essentialy he's saying that Brown is imagining it or just really unlucky. I know St. Albans pubs quite well and Mr Protz is lucky as the quality is indeed very good there, but that's not the experience across the country. Like Brown I'm sick of being served bad pints, so much so that I now order halves to start with. I'm falling back on Guinness far more often than I should be. CAMRA's response to such things is too often to deny & shoot the messenger.

    Most beer drinkers aren't members of anything, neither do they follow beer blogs or go to festivals. They go out for a few pints in the pub and once they've been served a few cack pints they remember it and move on permanantly.

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    1. Quality certainly was mentioned, although with no real solutions offered beyond "we need to respect it more" and "we need to charge more for it".

      I agree Roger Protz is in serious denial about the amount of poor cask beer out there. By being selective about where to drink I generally avoid it, but that doesn't mean you won't encounter it by going in random pubs.

      Ten years down the road, relaxing the smoking ban *may* not make that much difference, although I'm sure the amount of difference it would make would be considerably greater than zero. However, that does not detract from the fact that the actual effect since 1 July 2007 has been disastrous for the pub trade.

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    2. I hope these camra lot do not get their own way in wanting to be charged more for real ale,most people like me live from month to month on the wage that we earn and spend the extra cash after paying the bills and getting food on a few trips out to the pub with the wife and my pub crawls,if prices go up then something will have to go.
      Do they really want to kill off pubs altogether with that type of thinking.

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    3. Entirely agreed, Alan. I've got another post in the pipeline on that specific subject.

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    4. Something will have to go? The wife & kids will have to go, Alan. Cask bitter in pubs is too important.

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    5. Well the kids have already left home,my son went to uni and never came back to live with us and my daughter left when she was having her first kid,so we have been kid free for over four years,but i do get them visiting and two grand kids to dote over,i think the wife would be a lot harder to get rid of,a good thought though Cooky.

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  3. "You’d also be much more likely to find a pub, full stop" - Indeed. Look at the remaining pubs and bars surrounding the MBCF, two-thirds of them are keg. That's not an issue when keg is as good as it often is, and the cask is generally high quality in Mcr, but rather contrary picture to the accepted wisdom.
    MT

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  4. There is oversupply in the market so prices can't increase. The best breweries will survive,others not am afraid.All business is the same in this respect,and punters paying more in a market of oversupply will just not happen,nor should they pay more. Many are hard-pressed themselves.

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    1. Unfortunately as we have already seen with some of the losses we have had, to assume "best breweries will survive,others not am afraid" is an over simplification. Some of the best breweries are quitting because they are faced with reducing their quality to compete on price or give up.
      Perhaps the starkest example of all is the Celt Experience - certainly one of the best breweries in recent years, but gone and the brand in the hands of Evans Evans - lets be kind and just put them in the "others" category.

      What Mudgie doesn't capture in his review but which was generally agreed in the debate is that there is a place for cheap beer for those that need cheap beer. What was said was that as discerning drinkers, we shouldn't expect beer made with quality ingredients to be sold at prices similar to that which isn't.

      I can't remember if it was Richard or Alex who made the point best but they basically suggested that a better marketplace would be for pubs to stock cheap beer priced cheaply but also offer a premium beer at a price reflecting its ingredients and let us drinkers decide if we want to pay for quality.

      In discussion afterwards a good point was made that people will happily go to a restaurant and pay £4 for Peroni as it's all that is offered, but ask them to pay £4 for a Magic Rock in the pub and they'll shun it as pick the lower quality beer which is £3.

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    2. This has always been a mystery to me. The likes of Pizza Hut charge around £4 per bottle and people pay it because they prefer a beer. It doesn't then follow that they'll pay £4 for very good cask in a pub, but somehow the "restaurant " gets away with it.
      I sometimes think that men are in such a catatonic state in some of these chain "restaurants" , particularly if children are involved, that they expect to get fleeced and just pay up.
      The same logic applies to, for example, cinema pricing for popcorn and "pick'n'mix".

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  5. Did the audience actually want a debate involving people of differing views with opinions expressed they might disagree with or did they want to watch a group of people confirm there own pre-existing opinions?

    It may be disappointing to you, but for many it would have been wonderful to hear the old religion trotted out again to go unchallenged.

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  6. Shame you didn't feel the debate was productive, I certainly felt it was a healthy discussion on the state of the industry - after sitting on the panel at both I can honestly say it certainly felt like it had more value than the one at Indyman last year.

    Did you notice that the chap who posed the question from West Yorkshire about those on a low income having a right to cheap beer (which of course they do and no one disagreed with that point) was wearing a Cloudwater t-shirt?

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    1. I don't think it was a waste of time, but I did feel it was all rather insular. Not sure I really expected any different, to be honest. I did consider asking a question but didn't get round to it.

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    2. What would you have asked? (And then would the TAND have allowed it?)

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    3. I considered asking either:

      (a) What do CAMRA and the craft beer movement have to offer to working-class drinkers?

      or

      (b) Do you agree that there is a serious threat to British pubs and brewing from the rise of the anti-drink lobby?

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    4. Question 1 is the more interesting; Tand, would you have waved it through? I feel we have a right to know.

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  7. I missed the first half hour, as I had it in my head that it started at 15.30, not 15.00, and I was out Supporting Pubs (and meeting other Twitterati) til then.

    I missed most of the rest as well, but that's just because I had the common sense to not sit down and listen to it all! No, really, I was a bit under the weather, so to speak, from 3 consecutive nights out drinking til 2 AM, so I just could not get myself to sit down for as serious a discussion as that. I'd have nodded off and fallen over on someone, or maybe even spilled a drink.

    So I only heard little bits of it, and I have to say that while I don't necessarily agree with everything said, there was very civil, well-reasoned discussion, with the youngest panelist, the CURTY, having presented himself particularly clearly and sensibly. Or I missed lost of nonsense, just by blind luck. (Or bad luck.)

    The TAND, whilst having to steer the discussion a bit back on track at times, never had to wrestle anyone to the ground. Or if so, I missed it.

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  8. I would just clarify in my 'best breweries ' comment that I include all aspects of the business,(and that's what it is).Of course any business can have bad luck or strange circumstance but in general the best brewery businesses will survive in the round,not just an excellent brewery technically -because of course attention is needed to the whole aspect of the operation.It is tough,and I would never deny that,particularly when we see a very commendable brewer not survive in this complex and difficult environment after much laudable and respected effort.

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    1. Still can't agree with you there. Some of the better businessmen and women have already quit brewing because it is so cut throat they can make more money doing something completely different.
      To simplify as "the best brewery businesses will survive in the round" is to forget that in business terms the "best brewery businessses" are inBev, SAB-Miller & Heinekin.....

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    2. I would agree entirely with what you say there there,and this is exactly my point.Oversupply leads to the best businesses you name surviving,plus some of the smaller best ones also,but there will not be room for all.Many large & small will make it through though.That is the brutal toughness of an oversupplied market.You are entirely right in saying some very sharp smaller brewery business people may choose to leave the market (or part of it)for something else.Even the big names you mention wade in and out of parts of the market over the decades,as conditions change.The call about what to do in an oversupplied market can be a difficult one,some may opt out of cask,circumvent it by developing their own outlets,choose to leave and fight another day,or like some big brewers choose to buy others up,or wade into craft or whatever to try and grab a bigger slice of that market.But sadly not all by nature of the over supply will be able to carry on.I'll not return now but the best business tactics will see through generally,caveats of average luck etc. aside-and that includes both technical brewery product,and all the rest in combination.I would say my comments relate only to the brutality of life in an oversupplied market,not an opinion on any parties tactics to deal with that.

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    3. You can brew the finest beer in the world, but if you can't make a profit selling it, it's a vanity project, not a business.

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  9. Two items:
    The smoking element maybe one of those straws that breaks the back. Looking at the British Beer and Pub Association numbers:

    To get some historical context we compare the declines. We get fairly similar rates for the periods 1980-87 and 2001 -2007. 1987-1993 was higher again (maybe 50% higher). Average the three periods and its 583 pubs closing per year. The recent decline after 2007: ~880 pubs per year closing. So smoking accountable for at least 300 pubs per year? The stabilizing period around the naughties is hard to quantify exactly.

    Cost:
    Currently many of my peers struggle to earn £10/h in Wales. If you take that earning at 52 weeks a year and look at a realistic disposable income after rent, council and water and elec/gas, you are looking at maybe £600-700 per month. That is not a lot left to spend on food, transport, socializing etc. And as one might already be doing Netflix etc, the 50p a can option seems to make economic sense.

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