Friday, 26 February 2021

A slow crawl to freedom

The contents of the Prime Minister’s announcement last Monday of the roadmap to unlocking were widely leaked in advance, so none of the contents came as a great surprise. Sometimes, these pronouncements contain some aspect that was rather better than had been trailed, but this was not to be this time, and so the hospitality trade is faced with a painful and glacially slow crawl back to full reopening in four months’ time. Not surprisingly, my Twitter followers weren’t at all impressed. Lord knows who the 8.7% were who responded “too fast”. However, we are where we are, and the pub trade have to make the best of a bad job rather than crying into their beer. The first milestone is on 12 April, no less than seven weeks away from the announcement, when outdoor opening, including off-sales, will be permitted. It is hard to understand why off-sales weren’t allowed earlier, as they continued during the two previous lockdowns. That is still a long wait, and unless significantly more support is forthcoming in next week’s Budget no doubt many more pub operators will give up the ghost. Speaking personally, the thing I’m most looking forward to is a haircut, as I’m increasingly resembling a member of an early 70s prog-rock band!

Towards the end of Lockdown #1, the possibility of outdoor-only opening was mooted, and I wrote here about the issues it raised, an obvious one being the notorious fickleness of the British weather. The Morning Advertiser reports than only 40% of pubs will be able to take advantage, and Sacha Lord, the Greater Manchester night-time economy adviser, makes the point that it represents a kind of class distinction, as urban boozers are much less likely to have extensive beer gardens than dining pubs in leafy suburbs and villages.

This stage will require pubs to operate table service – it certainly won’t just be a case of serving people pints for perpendicular drinking in the street. This makes swift, responsive service a challenge even indoors, and if you’re in the far reaches of an extensive beer garden you may have a long wait for a refill. And customers will still need to go inside to use the toilets, unless pubs install a battery of portaloos in the garden.

The government have indicated that “outdoors” will be defined in the same way as under the smoking regulations, so a covered area with two out of four sides open will be judged acceptable. So we can expect a rush on suppliers of marquees, umbrellas and temporary shelters. Inevitably this will lead to demands for even further restrictions on smokers, ignoring the fact that for thirteen years they were forced to drink outside at times when nobody else wanted to.

The fickleness of the weather will also pose a challenge for selling cask beer, as it will make the level of trade far more variable than normal. A few days of cold, wet weather may leave you with several largely unsold casks, while a heatwave could clear you out. Having said this, if pubs are in a position to make good use of outdoor facilities, as many are, it does present them with an opportunity that they should make the best use of. And a sunny weekend could prove a goldmine.

Then, on 17 May, pubs will allowed to open indoors, but it is important to remember that this will effectively be under last year’s Tier 1 restrictions, with social distancing, table service and mandatory masks. As I wrote at the time, this results in a regimented, cheerless experience that largely destroys the pleasure of the swift, casual pint. A dining pub can cope without too much problem, but many smaller wet-led pubs reported that the atmosphere was totally gone, as was their profitability. When this came in last year, I largely stopped going to pubs, certainly not to make speculative visits, and I doubt I’ll be particularly keen to rush back in May.

We are told that all restrictions will be removed on 21 June, which fortunately is three days before my birthday. But, unless the requirement for masks on public transport is dropped at the same time, my celebratory pub crawl will definitely be confined to Stockport! This will mean that the pub trade has either been shut entirely, or operating under severe limitations, for a full fifteen months. However, this has been portrayed in some quarters as giving the green light to a kind of bacchanalia, so it’s not difficult to imagine the desiccated sociopaths of SAGE having kittens and decreeing that the Tier 1 restrictions need to continue throughout the summer. I’m not making a prediction, and I sincerely hope it doesn’t happen, but don’t say you haven’t been warned!

I have seen talk of this causing a “summer wave”, but surely, given that respiratory viruses always lose their effectiveness in warmer weather, and that by then a large majority of the adult population will have been vaccinated, this is very unlikely. If it does turn out that the impact of the virus has by then become trivial, and we are able to enjoy the second half of the year to the full, then we may look back on the preceding fifteen months as just a bad dream. A successful and prosperous reopening of the economy will erase a lot of bad memories. But only time will tell.

Tuesday, 23 February 2021

The Eternal Whipping Boy

I didn’t really see much point in blogging about yesterday’s announcement about the snail-like pace of reopening the country. It has all been said before. But I thought it would be worth drawing your attention to this brilliant blogpost by Scott Graham aka The Bar Biographer. Scott doesn’t blog often, but when he does he invariably hits the nail firmly on the head.

Amidst the mountains of speculation, one thing is pretty much agreed upon by all observers, pubs will be at the back of the queue for reopening. What is also widely acknowledged is that such a decision has no scientific basis. But that doesn’t matter to politicians, academics, journalists, social media commentators and all the other influencers, large and small. That the licensed trade and night-time economy occupy the lowest rung is more about worthiness than rates of transmission.
He also skewers the narrow-minded, Puritanical attitude of the Scottish government:
Pubs in Scotland will face an even less palatable menu, with Nicola Sturgeon set to look at the schedule set out by Boris Johnson and mirror most of it, particularly its sequencing, but add on five or six weeks for Scotland. That’s because the SNP has an unwritten motto, as do a chunk of the population, “never knowingly less righteous (i.e. authoritarian) than the next country”.
And his conclusion is spot –on. Yes, one day, we will get our pubs back in some form. But they will be hugely diminished from what they were before lockdowns.
Yes, eventually the pubs and social clubs will re-emerge in the UK, maybe even nightclubs and casinos. But the landscape will have changed dramatically, independent operators even more an endangered species, chains such as Wetherspoons ever more dominant. It didn’t have to be this way, but it is the inevitable outcome of the UK establishment once again casting the licensed trade as the whipping boy.

Saturday, 20 February 2021

A swift half century

Next month will see the 50th anniversary of the Campaign for Real Ale, which was started by four young English journalists in Kruger’s Bar in Dunquin in County Kerry, Ireland. Drinks writer Laura Hadland, who tweets as @Morrighani, has been commissioned to write an anniversary history, which is to be released to coincide with the actual date. It is promised to be “warts and all” but it remains to be seen whether that extends beyond a few mildly embarrassing anecdotes to a deeper examination of its objectives and achievements. I’ve pre-ordered a copy, but obviously it hasn’t arrived yet.

Since then, it has enjoyed great success as an organisation, reaching a record membership figure of over 190,000 before the Covid crisis deprived it of the opportunity of recruiting at beer festivals. It was described in the late 1970s as “the most successful consumer organisation in Europe”. However, if you look at the wider picture, during CAMRA’s lifetime both the share of real ale in the overall British beer market, and its absolute sales, have shown a dramatic decline, as has the number of pubs in the country. Obviously those trends are due to wider factors largely outside its control or influence, but at least on those terms its record cannot be judged as a successful one.

At the outset, CAMRA’s mission was very clear, and could be expressed as “to encourage pubs to sell beers in established British styles (overwhelmingly Mild and Bitter) in cask-conditioned rather than pressurised (keg, tank or top-pressure) form.” Yes, it was accompanied by assorted baggage in people’s minds about defending tradition and standing up to corporate power, which gave it an appeal across the political spectrum, but it was pretty unequivocal.

However, over the ensuring fifty years there has been a steady accretion of other objectives which have served to blur the organisations’s original single-minded purpose.

These include, amongst others:

  • Encourage pubs and bars to stock real ale

  • Promote traditional British beer styles

  • Encourage new breweries and innovative beer styles

  • Support the appreciation and preservation of traditional pubs

  • Lobby for the pub trade in general

  • Stand up for the wider interests of drinkers

  • Challenge the corporate power of breweries, pubcos and supermarkets

  • Organise beer festivals and social events

  • Offer a discount scheme for pubs and beer festivals

  • Doing all the above for cider and perry as well as beer
All of these are entirely legitimate areas of interest, even if they don’t necessarily float everyone’s boat, and it has often been said that CAMRA is a broad church from which people can pick and choose the aspects that interest them. However, it leaves its objectives as a campaigning organisation distinctly blurred. Who can say, beyond a vague “supporting pubs and beer”, what CAMRA actually stands for now? Some of them even have the potential to work against each other. I have come across some people within its ranks with whom I struggle to identify any areas of common interest at all.

A few years ago, CAMRA underwent a “Revitalisation” process which was supposed to make it more fit for the 21st century and free it from the narrow-minded dogmatism that had often characterised it in the past. However, it’s hard to see what difference it has actually made, and in some ways it seems to have only served to extend that dogmatism into new areas. Does anyone outside CAMRA actually care less whether keykeg beers are “keg-conditioned” or not? And CAMRA’s stance as a generalised campaigning organisation representing all beer drinkers, pubs and brewers is undermined if it refuses to give house room to the beers that most people drink.

Many members still remain blind to the existential threat to all that they hold dear posed by the public health lobby, and much prefer to direct their ire at evil pubcos and supermarkets. It is a massive pivot from assuming your main enemy is business to realising it is government, and one many have no intention of making. Indeed, while it may claim to be promoting something that is “fun”, CAMRA members often taken a very puritanical view towards anything outside their narrow definition. They are often very much anti-smoking, anti-“junk food”, anti-popular culture and anti-gambling, and signally fail to join up the dots. As I quoted in this blogpost,

... if you do a sociological analysis on the IanB Scale, a scale of Puritanism which I invented several seconds ago, CAMRA are a heavily puritan social formation. Puritans come in a number of guises, and can, on the surface seem to be promoting something notionally libertine, such as imbibing an intoxicant. Nudists are another example of a puritan formation that you have to look more closely at to see it. Try bumming a fag in a nudist camp and see the reaction you get.
Back in 2005, before the days of blogs, I wrote an assessment of CAMRA’s achievements to date.
In conclusion, if we take the view that CAMRA has not managed to curb the power of the major breweries, increase the amount of real ale sold in Britain, or stem the tide of pub closures, then it must be judged a failure. Many of the campaigns it has mounted on wider issues have been damp squibs, or have spectacularly backfired. But, to my mind, its lasting achievement has been to greatly raise the profile of beer in the UK, and to encourage the creation a network of producers, outlets and consumers where beer is appreciated in a way that was scarcely imaginable in 1971. Real ale undeniably has to an extent become a niche product, but it occupies a large and thriving niche. And it is the positive promotion of real ale – in all its forms – and the establishments that sell it, that should form the core of its activities in the future. If that means CAMRA drawing in its horns a little, then that would be no bad thing.
And perhaps that message of sticking to the knitting is one it would do well to heed today.

Tuesday, 9 February 2021

Going viral

Very little in our daily lives has escaped the reach of Covid over the past year, not least in the sphere of beer and pubs. What follows is a collection of miscellaneous musings on the topic that extend beyond the usual subject matter of this blog.

  • The pandemic, or rather the government response to it, has divided families and sundered friendships in a way reminiscent of Leave vs Remain, although perhaps even more bitterly as it is something that is closer to home. There’s a certain amount of overlap, although far from an exact match.

  • It has provided a golden opportunity for authoritarians and puritans of all stripes to advance their hobby-horses knowing that they will receive little kickback. The Burden of Proof fallacy has been working overtime.

    A: We're going to impose Measure X to reduce the spread of Covid.
    B: I'm not sure Measure X is very effective.
    A: So you want to KILL PEOPLE, you monster!

  • There has been a disturbing amount of suppression of views that dissent from the official narrative, with people losing newspaper columns and TV slots and having their social media accounts suspended or deleted.

  • Some people in public life have executed a screeching U-turn and recanted from their previous scepticism. One of the worst examples has been Christopher Snowdon, previously the scourge of the public health establishment on alcohol, tobacco and food policy. In the middle of last year, he was staunchly defending the Swedish approach, but abruptly came round to full-blooded support of the current lockdown. He has compounded this by engaging in mockery of those who disagree with him, completely failing to appreciate the inherent irony.

  • People across all manner of sectors have displayed an unedifying dog-in-the-manger attitude, demanding to know why Business X is allowed to open when they’re not. Sadly, the pub trade and those claiming to support them have been particularly guilty of this.

  • To assert that there is a choice between protecting the economy and protecting lives is to draw a false dichotomy. A healthy economy is an essential foundation for a healthy society.

  • Business failures, economic destruction and a mental health crisis are not caused by Covid, they are caused by lockdowns. Covid is a fact of life, lockdowns are a policy choice. One does not inevitably stem from the other.

  • The police really haven’t covered themselves in glory - arresting people for singing and throwing snowballs, making up the law as they went along on mask exemptions, travel to exercise and what shops were allowed to sell, carrying out heavy-handed and unwarranted raids on pubs on the say-so of one malicious curtain-twitcher, and applying blatant double standards to public protests depending on the cause being promoted.

  • The mask law has encouraged self-righteous, judgmental individuals to feel that they have a right to bully and harass disabled and vulnerable people in public places. It’s all too easy to say “he doesn’t look very disabled”, but of course many of the conditions that entitle people to an exemption aren’t immediately obvious. Anyone tempted to have a go should heed the words of the DHSC:

    And hopefully any person who took it upon themselves to challenge this lady would feel rightly proud of themselves.

  • I don’t doubt that Chris Whitty, Patrick Vallance and Jonathan Van-Tam are able and eminent scientists who are genuinely motivated to do good, but they are only experts in their particular field and seem blinkered to any wider considerations.

    I am reminded of the quotations by C.S. Lewis that “Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive.”, and of F.A. Hayek that "There could hardly be a more unbearable - and more irrational - world than one in which the most eminent specialists in each field were allowed to proceed unchecked with the realisation of their ideals."

    It would be a hollow victory to succeed in eliminating Covid while being surrounded by the smoking ruins of a destroyed economy. And, frankly, the policies enacted over the past year seem to have done a much better job of achieving economic destruction. Maybe an economist should be included on SAGE to provide a wider perspective.

    Neil Ferguson, on the other hand, is a contemptible hypocrite with a long track record of failure in forecasting who shouldn’t be allowed anywhere near influencing government policy.

  • Some people, with the benefit of hindsight, have argued that things would have been better if we had locked down earlier and harder. However, looking at the situation across the world, there is no correlation between the severity of lockdowns and the success in tackling Covid. Some of the countries with the strictest lockdowns, such as Peru, Argentina and Spain, have had some of the highest death rates. It seems that, in some people’s minds, lockdowns are rather like socialism, that they would work this time if only they were done properly.

  • Lockdowns have been described as middle class people staying at home on full pay making Zoom calls while working-class people bring them stuff – or lose their jobs. There is a clear correlation between the level of social deprivation in an area and the proportion of inhabitants unable to do their jobs from home.

    Media discussions on lockdown seem to be monopolised by people who have suffered no financial penalty. Maybe every panel should have to include at least one person who has been furloughed or lost their job.

  • The past few days have seen a sharp decline in daily case figures and some more positive mood music about the lifting of restrictions. However, there is unlikely to any more clarity about the road forward until the Prime Minister makes an announcement a week on Monday. In the meantime there is a welter of speculation in the media, most of which presumably originates from anonymous government sources, but only serves to spread anger and alarm amongst the population.

  • And I continue to believe that those claiming that most restrictions will be gone by the middle of the year are being hopelessly optimistic. I hope I’m wrong, but I’m not making plans for any holidays further away than Argate.

Saturday, 6 February 2021

Through the looking glass

Many people have been complaining about the unreasonableness of the rule that, before the lockdown, only allowed pubs and restaurants to serve alcohol if it was accompanied by a “substantial meal”. It’s reported today that the government have recognised the unfairness of this and are now proposing to create a level playing field by allowing them to reopen, but to ban them from selling alcohol at all.

Presumably at the same time they will also allow hairdressers to reopen without being able to cut hair, and gyms without anybody being allowed to exercise. We truly are plumbing the depths of insanity.

Anyway, this seems to be a suitable theme tune for today.

Friday, 5 February 2021

Fancy a pint?

This Spring will mark forty-five years since I first bought myself a pint in a pub at the age of sixteen. Since then, obviously many things have changed in pubs, not least that that simple act, once commonplace, would now be impossible. And one thing that strikes me is that people are far less likely just to “go out for a drink”.

Back then, pubs were more numerous, they were much busier, and were busier throughout a much higher proportion of their opening hours. And a mainstay of their trade was what I described – people, either singly, or in groups, whether of friends, family or work colleagues, meeting up not to watch sport or to eat a meal, but just to enjoy a drink and a chat. It was a valued third space that was neither home nor work, where you could let your hair down, lose your inhibitions a little, and speak more freely and openly. It was also noticeable how groups would talk between each other, not just amongst themselves. Diners don’t tend to do that. They would often be of mixed ages and, while men tended to outnumber women, would also often include both sexes.

Go to those pubs, now, and the scene will be very different. Many will have closed their doors forever, while others will now be closed at times when once they were busy. It’s easy to say that there’s no point in opening if there’s no trade on offer, but that becomes a self-fulfilling prophecy, and I’ve argued before that limited and erratic opening hours are a major deterrent to people visiting pubs in general. In 1976 you knew when the pubs would be open.

Where the pubs are still open, sometimes they will be so deserted as to make casual customers feel uncomfortable. There’s a big difference between a quiet pub and an empty one. Or such a high proportion of customers will be dining that anyone just wishing to have a drink will feel like the proverbial Piffy on a rock bun, and will also have no other drinkers to chat with. Or everyone will be watching the big match, thus stymieing conversation and turning the pub into a monoculture.

This trend is encapsulated by my description of how Sunday lunchtimes in my local pub changed over the years. In the mid-1980s, with only two hours’ drinking, no food, no children, no football and no piped music, it was busy verging on packed. Now, open all day, and with all of those things, it’s virtually empty. “The heaving, wet-only, smoky Sunday lunchtime session of the mid-80s has now given way to a sanitised, smoke-free environment virtually devoid of drinking customers thirty years later.”

Of course this pattern of drinking hasn’t vanished entirely, but it’s much diminished, and pubs are the less for it. Surely conversation lubricated by a drink or two is what pubs, at root, are all about. You often hear sentimental gush about pubs being cosy, convivial places at the heart of their communities, but the reality on the ground frequently bears little resemblance to this rose-tinted vision. The sight of a couple or group coming into a pub, getting drinks and just sitting down to talk can be so rare that it is worthy of note.

One of the places where this mode of pubgoing is still in evidence is in the much-maligned Sam Smith’s pubs where, of course, many contemporary distractions are absent.

Note that I talking here about suburban, small town and village pubs that people are likely to visit directly from their own homes. The customer dynamic in the centres of large towns and cities has always been different.

Friday, 29 January 2021

After the storm

As I said in my previous post, “It may seem a distant pipedream at present, but the day will eventually come when the pubs are allowed to open again.” Planning for the future may appear inappropriate when set against the very high daily death tolls recorded in recent days, but to retreat into panic and despair and refuse to look forward would be irresponsible. It should be remembered that, During World War 2, the Beveridge Report was published at the time of the battle of El Alamein, and the 1944 Education Act was being debated in Parliament while the D-Day landings were taking place.

Although it is still more than three weeks away, the Prime Minister has stated that some kind of roadmap for reopening the economy will be produced on February 22nd, and the past few days have seen encouraging reductions in the number of positive Covid tests and hospitalisations. Assuming the vaccines prove effective, this trend should accelerate in the coming weeks.

However, it would be naive to expect any rapid progress in the sphere of hospitality. Over the past year, it often seems to have been treated as a scapegoat even when there was no evidence it was a significant source of infection. The main differences between Tiers 1, 2 and 3 were in how hospitality was treated. The impression has been given that government is largely indifferent to hospitality and sees it as something essentially frivolous, despite the fact that of itself it is one of the largest economic sectors and oils the wheels of the entire economy.

Even though most of hospitality has been closed for longer than it has been open since March last year, the amount of financial support provided has been distinctly grudging. If the government decrees that you’re not allowed to trade, then by rights it should compensate you for the resulting loss of income. Having said that, the overall level of borrowing that has been incurred is comparable with that needed to fund a major war, and our children and grandchildren will have to bear the burden of repaying it for decades to come. If interest rates had been at historic norms rather than virtually zero, that amount of borrowing would have been impossible, although arguably that unpalatable fact would have concentrated minds.

Looking specifically at the pub sector, the prospects do not seem at all rosy. During the brief window of relatively normal trading over last summer, the vast majority of pubs locally did eventually reopen, the exceptions mainly being ones whose future looked uncertain even before the lockdown. However, I would expect many more that are currently closed never to actually open their doors again, either under their current management or completely.

Last summer, even though capacity was restricted, few pubs seemed to be anywhere near full, and it was clear that many customers were still reluctant to venture out due to continued fear of infection, although the closure of other activities often linked to pubgoing such as theatres and sports venues also had a part to play. Licensees had to walk a tightrope between ensuring that social distancing guidelines were followed and avoiding going over the top with pettifogging restrictions. Sadly, quite a few seemed to fall into the latter camp and turned their establishments into profoundly unwelcoming places. After a winter of further scaremongering from the government, these fears will only be intensified when pubs do eventually reopen, and will lead to continued subdued demand for a long time to come. Indeed, it may never return to being as strong as it once was.

The past year has shown that making predictions is a very risky business, and I’m certainly not going to go down that road. However, on past form, it’s very likely that pubs will be one of the last sectors to be allowed to reopen. It’s probable that, at least initially, the old Tier system will be resurrected. One press commentator suggested that a likely timescale would be for most areas to go into Tier 3 on 8 March (i.e. “non-essential” retail allowed to open), Tier 2 on 6 April and Tier 1 on 4 May. That would mean that wet-led pubs had been closed for a minimum of nine out of the previous thirteen months.

There must then be a serious risk that the government would leave pubs in Tier 1 for a prolonged period. They could claim that the pubs had reopened, while ignoring the fact that they were still operating under such severe restrictions that both their ability to trade profitably and their appeal to customers had been seriously undermined. Tier 1 would be, for many pubs, a kind of living death.

Last October, I wrote about how the restrictions introduced in late September had meant the death of the swift pint. After they came in, I largely stopped going, whereas in the period from the beginning of July I had been doing so quite enthusiastically. This is echoed by this article in the Morning Advertiser in which a licensee argues that having to continue to operate under severe restrictions undermines the whole point of the pub:

As a wet-led pub, my stock-in-trade is the “pub experience”. I provide a haven for single people, people unwinding after work and people out to socialise.

The very nature of a wet-led pub is the socialising and the atmosphere. Any level of restriction has a massive impact on the experience and by opening with restrictions we are effectively destroying our own long-term prospects...

...People’s most recent memories of the pub is as a soulless place.

A pub should be a carefree place where people go to relax and enjoy themselves, not somewhere you’re being repeatedly questioned and hassled by both the staff and other customers. Going to the pub is a discretionary leisure activity; people aren’t compelled to do it, and and if they become sonewhere that is perceived as unwelcoming then people just won’t bother.

Back in December, I asked my Twitter followers to what extent they expected these restrictions to be lifted by the end of 2021.

There was a wide spread of responses, which were slightly skewed towards the more positive end of the spectrum. However, only 28.5% thought the restrictions would be completely gone, and 44.7% thought that most or all would still be in place. That isn’t a prediction, and I sincerely hope these fears are unfounded, but it doesn’t bode well for the recovery of the pub trade.

The Wickingman has also set down some thoughts on the issues surrounding the reopening of pubs here.

Edit: There is a report today that the government are considering abandoning the Tier system and opting for a single system of restrictions across England. While in a sense that might seem “fairer”, it would delay reopening as all areas could only proceed at the speed of the slowest.

Sunday, 24 January 2021

Feeling the draught

It may seem a distant pipedream at present, but the day will eventually come when the pubs are allowed to open again. When it does arrive, the licensed trade will be in need of all the help it can muster to get back on its feet. One idea that has been suggested by CAMRA is to reduce the rate of duty on draught beer only.

This has a number of reasons to commend it. By definition, draught beer is only served on licensed premises (apart from the occasional person buying a cask or keg for a party) and so this would be very accurately targeted. It is clearly defined and virtually impossible to evade. Plus, unlike with reducing duty for all beer, or indeed all alcohol , sold in the off-trade, there would be no possibility of seepage into the off-trade. Even if someone buys a container of draught beer to take home, the pub still gets the benefit, and it can’t really be done on an industrial scale.

However, it’s important not to get carried away. It’s likely that most pubs would use it as an opportunity to rebuild their margins rather than passing it on directly to the customer. The exception, as usual, would probably be Wetherspoon’s.

And how much difference to consumer behaviour would it actually make? The duty plus VAT on duty paid on a pint of 4% beer is 52p. Even if that was halved, it would still only be a gain of 26p, which is well under 10% of the price of most pints. That’s really neither here nor there for most pubgoers and, as I wrote here, isn’t of itself going to tempt them to drink much more in pubs. “Responsible people who aren’t on the breadline, which is most of us, don’t go to the pub because the opportunity doesn’t arise, not because they can’t afford it.”

I’m also inherently suspicious of any attempts to use the tax system to discriminate between “desirable” and “undesirable” activities. For a start, they often have little effect, especially when going against the grain of people’s behaviour. Despite the 50% duty cut, there hasn’t been any upsurge in consumption of 2.8% ABV beers, because people just don’t want to drink them. And, although there aren’t really likely to be significant issues in this case, such policies also tend to lead to “tax break specials” to get around the spirit of the legislation, and have the potential to produce adverse unintended consequences.

Some CAMRA diehards will grumble that the majority of the benefit will accrue to the drinkers of Carling and Stella, not real ale. But the objective is to support pubs, not real ale as such, and it should not be forgotten that two out of every three pints drunk in pubs are lager, while only one in seven is cask beer. It is the lager drinkers who keep the pubs going.

Another question is how such a measure would interact with the existing systems of lower duty for very weak beers, and higher duty for very strong ones, and Small Brewers’ Relief. Plus the anti-drink lobby will be up in arms at any cut in alcohol duty, no matter how worthy the motivation.

Given the current state of the public finances, the likelihood must be that, in his Budget in March, the Chancellor decides to raise alcohol duties across the board. So, even though it may in theory have much to be said for it, don’t expect a cut in draught beer duty to figure on his agenda. And I doubt whether much, if any, draught beer will end up being sold in March anyway.

Friday, 15 January 2021

Vertical disintegration

Just before Christmas came the news that Brains Brewery of Cardiff had signed a 25-year deal with Marston’s to take over the running of their pubs, although they would retain the underlying ownership and continue to supply the pubs with beer. It was rather hard to know what to make of this, as it seemed to go against the usual trend of a company closing or selling off its brewery but continuing to operate its pubs, which typically account for the bulk of the profit.

Initially, it was met with guarded optimism, with CAMRA welcoming it as a means of preserving both the pubs and the brewery. However, it wasn’t long before it all started to unravel, and the announcement came that Brains were unlikely to reopen their new, state-of-the-art brewery, and that the beers could well end up being brewed in England. I’m sure Bedford or Wolverhampton could make a decent fist of them, but this would mean that a once-proud brewery company would be reduced a mere financial husk, with no direct involvement in either brewing or pub operation.

It should not be forgotten that, in the 1970s, Brains were one of the select band of breweries to offer real ale in every single pub they owned. Their flagship beer SA was one of the early standard-bearers of the real ale movement, although it is in a style that is no longer so fashionable. It is still one of my favourites, though, and one I will usually go for if I happen to see it on the bar.

However, they have suffered from the usual problems encountered by every brewery mainly dependent on the on-trade, which has halved over the last couple of decades. And in recent years they have seemed to lack a coherent strategy, introducing a range of craft beers that were well-received, but seemed to fall between two stools in the marketplace, and increasing their estate by expanding into England, only to sell all those pubs again early last year. Plus the lockdowns in Wales have been even longer and more restrictive than those in England, and Brains have now become the first major brewing casualty of the Covid crisis. Tandleman has also blogged very perceptively on the Brains story here.

No doubt this news will give the directors of the remaining family brewers pause for thought as to whether the vertically integrated model combining brewery and pubs is still relevant in today’s business landscape. Going back a couple of generations, this was the default in the industry. Breweries acquired pubs to sell their product, and the number of pubs they owned was a key factor in judging their success and status. Most production went through their own pubs, and most of what the pubs sold came from the owning brewery.

Up and down the country there was a patchwork quilt of independent breweries of various sizes, in general just producing variations on the theme of standard British beer styles. People would, in general, choose a pub based on its location, its atmosphere, where their friends went and what activities took place there rather than specifically which beer it sold. Obviously some beers were better regarded than others, but by the end of the 1960s the wave of big brewery takeovers had eliminated pretty much all of the total clunkers. Perhaps one of the last to go was Swales of Manchester, taken over by Boddingtons in 1970 with 38 pubs and rapidly closed down, whose beer was dismissed as “Swales’s Swill.” But I’m too young to remember it, and I may be unjustly denigrating them.

There were still about 100 independent family brewers remaining at the dawn of the CAMRA era. Some, such as Boddingtons and Young’s, had strong local followings, whereas others weren’t met with such enthusiasm. Locally, I don’t think people would have gone much out of their way to drink Burtonwood or Matthew Brown. But all of them had their own individual character, and there was something to be said for pretty much all of them. The only one that people seemed to struggle to find a good word about seemed to be Gibbs Mew of Salisbury. Often the main determinant of which pub to choose was whether or not they sold real ale – people would choose a real Oldham Brewery pub over a keg Thwaites one.

Over the years, the various pressures on the industry caused many of these companies to be taken over or leave brewing, with the result that less than half are still standing today. It must always be remembered that, with the one exception of Matthew Brown being taken over by Scottish & Newcastle in the late 1980s, all of these were agreed deals. The single biggest factor determining survival or extinction was the continued commitment of the owning family.

In the ensuing years, various changes occurred in the industry to undermine the viability of the integrated model. First was the rise of lager, which by the middle of the 1980s accounted for half of all beer sold in pubs. Many family brewers developed their own brands, some decent, some less so, but they never resonated with customers in the same way as their ales, and the lack of a well-known national brand on the bar was often a reason for drinkers to avoid their pubs.

Then there was the growth of the food trade. Some brewers had attractive suburban and rural pubs in their estates that were well-placed to capitalise on this, but it reduced the overall importance of ale in the sales mix. After the 1990 Beer Orders, there was a growing expectation of seeing a wider range of beers on the bar, whether rotating guest beers or national brands, making brewers’ own ranges look dull and uninspiring.

And the dramatic decline of total beer volumes in pubs, which halved between 1998 and 2019, put further pressure on the brewing side of the business. Typically, the family brewers sold a much higher proportion of their production in the on-trade than the industry as a whole. This trend has particularly affected wet-led pubs without food sales to fall back on, and this was exacerbated by the 2007 smoking ban. This type of pub was over-represented in the estates of many of the family brewers, such as those in the North-West.

The overall effect of these changes has been to greatly erode the synergy between the brewing and pub-operating sides of the business, and diminish the relative importance of brewing. As I’ve said in the past, many of these companies have come to look like a chain of smart dining pubs with an under-utilised ale brewery tacked on as an afterthought. Inevitably, this has caused some of them to question whether it makes sense to carry on this way in the future, and no doubt more will do the same.

But surely, if you are running an integrated business, it makes sense to make a virtue of it rather than seeing it as a problem. There are no magic answers, but several breweries have found ways to address this. For firms varying from Bathams to BrewDog, the fact that you can buy those particular beers in those pubs or bars is a major factor in defining their appeal.

Sam Smith’s beers may not be such a compelling attraction, but their overall offer is a highly distinctive one on the pub market, and they make a point of promoting the fact that as much as possible of what they sell is made in-house. That, incidentally, as also something that the supermarket chain Morrisons use in their publicity. And Holt’s of Manchester, while a lot less out on a limb than Sam’s, do brew their own range of lagers and stouts which are the standard beers in those categories in their pubs. If you own a brewery, you might as well try to make the best use of it.

Too many pubs now have beer ranges that are hard to distinguish from one another. Promoting the fact that Bloggs’ pubs are the best place to find Bloggs’ beers has the potential to create a unique selling proposition. It also must be noted that the integrated approach has been adopted by newer breweries such as Joule’s and Wye Valley who have built up significant tied estates that heavily feature their own beers. Clearly there is life in that model yet.