Monday, 27 March 2023

The 3.4% solution

It’s perhaps surprising that it’s as long ago as 2011 that the government halved the rate of duty for beers of 2.8% ABV or below. However, this proved to be a perfect demonstration of how changes in tax rates won’t carry the public with them if they don’t want to go. Although there was an initial rush of interest, as I wrote here, it rapidly became clear that it was difficult to brew palatable beers at such a low strength, and people didn’t want to drink them anyway, even if they were cheap. About the only remaining evidence on the beer market are Sam Smith’s keg Light and Dark Milds and Alpine Lager, which retail at a very low price (I think £2.40 a pint) and were only about 3.0% before anyway.

However, as part of the general restructuring of alcohol duties that comes into effect on 1 August this year, this threshold will be increased to 3.4%, which obviously creates a very different situation. It’s much easier to brew enjoyable, palable beers at that strength, and indeed many popular beers already qualify such as, in the North-West, Holts Mild at 3.2% and Thwaites Mild at 3.3%. The very tasty Brakspear Bitter (now ridiculously renamed as “Gravity”), which back in the days when it was brewed at Henley I would have classed as one of my Top Five beers, is only 3.4%. On the other hand, I do note that many of the beers perceived as “light” are actually 3.5%. There are a lot fewer low-strength milds and light bitters around than there once were.

The savings under the new regime are certainly not to be sneezed at. On looking at the detailed figures, the lower-strength duty is not half, but only 44% of the full-strength one. For draught beer, there is a saving of 24.7p on a 3.4% pint, which with typical pub mark-ups equates to 50p across the bar. It’s 21.1p for a 440 ml can, taxed at the slightly higher packaged rate, making 84p on a four-pack and £4.20 on a 20-can slab. No doubt these savings will be partly absorbed by brewers and pub operators, as indeed they should be, rather than being entirely passed on to the drinker, but they’re certainly pretty significant.

Price elasticity in the beer market does not work in an entirely linear way, though. It is broadly divided into standard and varying grades of premium, with no significant discount sector. Drinkers generally won’t go for beers just because they are cheap, and will be even more reluctant if they’re relatively weak too. People will generally look for cheaper places to buy their favourite brands rather than trading down.

In the on-trade, the impact of lower prices is reduced by the prevalence of round-buying. If people do feel the pinch, they will shift from the craft bar or brewery tied pub to Wetherspoon’s. In the off-trade, while there is cut-throat competition on major brands, supermarket own-brands have never gained much traction. They’re fine if you’re drinking alone, but if a friend comes round and you offer them an Aldi clone rather than a Punk IPA or Carling they’ll think you’re a right cheapskate.

It’s always difficult to make predictions on changes like this, and it should be remembered that measures such as the lower duty for 2.8% beers and permitting two-thirds measures have been damp squibs. However, the savings available are so great that it’s hard to imagine that the beer market will sail on little changed.

Surely it will be a no-brainer to reduce existing beers positioned at 3.5% by a single point. This would include Taylor’s Golden Best and Hook Norton Hooky Bitter, and locally Hydes Dark Ruby and 1863, and Lees Dark. The same would also probably happen to Bud Light, and very likely also the 3.6% smooth bitters such as John Smith’s and Worthington. Robinson’s have already introduced a new 3.4% beer called Citra Pale to compete in that category, although in my experience it’s a thin, lacklustre product and not a patch on the 3.7% balanced bitter Wizard which is being withdrawn.

I can’t really see established products around the 4.0% mark such as Carling or Holts Bitter having their strength reduced. But brewers of beers in the 3.6-3.8 range will be carefully considering their position. Of course if you do reduce the strength of a beer you need to take your customers with you, although a substantial price reduction might help persuade them. We may well end up in a position where there’s a yawning gap in the beer market between 3.4% and 4.0%. And who would introduce a new beer at 3.6% even if they think that’s the ideal strength for it? It will also be interesting to see if Sam Smith’s nudge up the strength of their 2.8% kegs by a few points.

Introducing new, weaker versions of existing products is something that doesn’t have a good track record, and it also serves to dilute the perception of the core brand. But it’s possible that brewers may consider launching entirely new beers that don’t identify themselves as “light” to take advantage. And it’s worth noting that in Scotland Greene King and Caledonian seem to have had success with Belhaven Best and Caledonia Best, relatively new keg and canned beers in the traditional sweet, malty Scottish style, both of which come in at a mere 3.2%. I have to saw I have never even seen these beers on a bar or supermarket shelf, let alone tasted them, but they will certainly receive a big boost from the lower duty rate. And, under Scottish minimum pricing of 50p a unit, 4x440 ml cans of 3.4% beer at £2.99 is an attractive price point.

I have to say that in principle I don’t favour systems of tiered alcohol duties (or any similar taxes), as they inevitably produce perverse edge effects and distort the market. In my view there should be a single scale of beer duty proportionate to alcoholic strength. But brewers and drinkers can’t look a gift horse in the mouth, and any cut is better than none. It will be very interesting to see how this plays out in the beer market.

Friday, 24 March 2023

Is the outlook getting wetter?

There has been talk recently of a move away from dining pubs back towards wet-led ones. This is a theme taken up in this BBC report from February, and explored in further depth in this article by Glynn Davis. However, the two examples used are not perhaps the best illustrations of the point.

The first is the Ypres Castle Inn, situated in the shadow of the eponymous castle (actually more a glorified gatehouse) in the picturesque historic town of Rye in Sussex. It’s in a location where you’d probably expect a pub to serve food for visitors. However, it was taken over pre-Covid by high-profile licensee Jeff Bell who I suspect has turned it into more of a beer-focused pub and no longer sees the need for food.

The second is the Queen’s Head in Newton, Cambridgeshire, which is one of the “famous five” ever-present entries in the Good Beer Guide. It’s situated in an attractive village a few miles outside Cambridge. It serves a limited food menu including soup, sandwiches and meat and cheese platters, but as far as I know has never attempted to be a full-on dining pub, so it isn’t really illustrative of a trend, although it does underline the point that you don’t need to be a gastropub to thrive in that kind of location. As I wrote about it, “It’s odd how the South of England manages to draw middle-class customers to non-dining village and rural pubs in a way that is hard to imagine in Cheshire”.

So, case very much not proven. It has certainly been recognised in recent years, though, that the food-driven model isn’t necessarily appropriate for all pubs, and wet-led pubs need to be considered as an important category in their own right rather than just seen as second-class citizens of the pub world. North West-based Amber Taverns developed as a pubco dedicated to wet-led pubs, and divisions of major pubcos such as Stonegate’s Craft Union concentrate on this segment.

There has also, over a longer timeframe, been a substantial retrenchment of the availability of food in pubs, to a large extent associated with the general decline of the pub trade. In the past, many pubs would offer a simple menu of soup, sandwiches, toasties, burgers and the like with perhaps a hot dish of the day, which to a large extent was aimed at customers from nearby workplaces.

But lunchtime pub visits from work are increasingly frowned on, even if they don’t involve drinking any alcohol, and many of the workplaces themselves have closed or drastically slimmed down. Tougher hygiene regulations also require pubs to have a dedicated catering kitchen rather than preparing food in their domestic one. And town-centre footfall from shoppers is much reduced too. The classic freshly-prepared “four quarters” pub sandwich is a virtually extinct species.

I wrote about this trend fifteen years ago:

...many pubs in less prominent locations that once made an attempt to serve meals and appeal to outsiders have dropped the food, gone evenings-only and essentially cater only for locals and regulars.
In many cases these pubs are no longer there at all, and if they are they’re probably not open at lunchtimes. In smaller non-tourist towns it can be difficult to find any pub food outside of Wetherspoon’s, who have hoovered up what trade remains.

Of course many pubs do thrive by concentrating on food and turning themselves effectively into restaurants, but the “mixed economy” pub with a balance of dry and wet trade is becoming increasingly rare. With pub food, it seems to be either all or nothing. Plus, as I’ve mentioned before on the blog, there’s evidence of the much-vaunted family dining pub model not finding everything plain sailing.

Some of these trends are illustrated by the changing fortunes of one of my local pubs, the Griffin in Heaton Mersey. This is a four-square Holt’s pub with an unspoilt multi-roomed interior including an impressive sash-windowed bar. In the 1980s it was so busy, mostly with wet trade, that a large extension was built on one side, the bar of which effectively became the pub’s main bar.

There was a serving hatch in the extension from which a variety of straightforward food was dispensed at lunchtimes. I remember having some tasty bacon barms there. But the general decline of pubgoing meant that it became nowhere near as busy as it once was, and Holts carried out a thorough cosmetic refurbishment, fortunately leaving the historic parts untouched, but removing the serving hatch. I’m not sure whether this was pre- or post-smoking ban.

They introduced a much more ambitious and expensive pub food menu, but it never seemed to find many takers, and the general impression that the pub still gave of being a traditional boozer probably put diners off. In hindsight, it might have made more sense to make the extension a dedicated dining area with a brighter colour scheme and return the main bar service to the old side.

So the food has now been dropped, and according to WhatPub it now only offers “pies and barmcakes”, which presumably need no kitchen preparation. It majors on TV sports, but apart from when United or City are on gives the impression of a few people rattling around in a large building, whereas thirty years ago it was often standing room only. As I mentioned in an earlier blogpost, the contrast in the level of trade between it and the Wetherspoon’s half a mile down the road is very striking.

Yes, there may well be examples of more marginal food-serving pubs giving it up entirely, but I really don’t see much evidence of pubs with a major food offer dialling it back and putting the emphasis more on wet trade. It might be nice if they did, though.

As an aside, the term “wet-led” often seems to be used to mean pubs that serve no food at all, whereas surely it should also encompass pubs where food is only a relatively small part of their sales.

Monday, 20 March 2023

Widening the gap

Last year, the government announced that, as part of the general restructuring of alcohol duties to come into effect from 1 August this year, they would introduce a 5% duty discount for draught beer. In his budget last week, Chancellor Jeremy Hunt sprung something of a surprise by almost doubling this discount. However, the way he achieved this was to freeze the duty on draught beer (and cider) but to increase it on all other alcoholic drinks by the full amount of RPI inflation, resulting in a differential of 9.2%. The full details of the new duty rates are set out on this page.

In practice, this won’t make a huge difference to prices. The duty isn’t actually being cut, just frozen, so no prices will fall, they will simply rise more slowly. For a pint at 4% ABV, it’s worth about 5p when the VAT is added on, equating to 10p over the bar once a typical markup has been added on. That’s not enough to change people’s behaviour, but that isn’t the point. Essentially it is giving financial support to pubs by reducing the tax burden on a product that is only sold in pubs and other on-trade outlets.

Likewise, some have complained that most of the benefit will accrue to the brewers and drinkers of mass-market lagers, but of course most of the draught beer sold in pubs *is* mass-market lagers. I was amused, though, to see it labelled as the “Brexit pubs guarantee”, as it’s a change that could not have been made if we were still members of the EU, something that will no doubt stick in a few craws.

It wouldn’t really make much sense if it was intended to change behaviour. Fiddling about with tax rates rarely makes much difference to purchasing patterns, especially if it’s going against the grain of what people want to do. Halving the duty on beers of 2.8% or below didn’t lead to any kind of boom in sales. And, as I wrote here, would shaving a few pence off the purchase price of beer really prompt most people to drink more in pubs? I also tend to take the view that reducing the burden on things I happen to like, however tempting it may seem, isn’t usually a sound basis for taxation policy.

All the talk about the reduction in draught beer duty has to some extent obscured the fact that Jeremy Hunt has imposed the largest increase this century in the duty on all other forms of alcoholic drinks. This must account for 85% of all alcohol sold in this country, and includes all the production of small distilleries and a growing proportion of the sales of small independent breweries.

After several years of either duty freezes or minimal increases, this will be a real kick in the teeth for consumers, especially at a time when the price of pretty much everything else they buy in the shops is rocketing too. Tom Utley certainly wasn’t impressed. And, as usual, smokers, who typically are less well-off than the average person, have been clobbered by an above-inflation increase.

The wine lobby are understandably aggrieved that the changes will lead to the duty on a typical bottle increasing by as much as 45p, although in fact, while one might quibble about the ahsolute level of duty, a move to taxing wine by alcoholic strength rather than at a flat rate is long overdue.

Wednesday, 8 March 2023

All human life is there

My pub visits this year so far have reinforced my view that Wetherspoon’s must attract a wider cross-section of society than any other pub operator. People often look back at the past through rose-tinted spectacles imagining an idyllic world where the lord of the manor rubbed shoulders with the farm labourer. But in fact pubs back then could often be very exclusive at both ends of the spectrum, and the vast majority applied social segmentation through having separate public and saloon bars. You quickly knew if you had ventured in to the wrong pub, or the “wrong side”.

Now in Wetherspoon’s you are likely to encounter a very wide mix of customers of different ages, social classes and sexes, and also who are visiting for different purposes, whereas the dining pub and sports boozer can be very monocultural. This is perhaps even more the case for those in suburban locations, where there will be more families, and also categories of customer like sports teams after their Sunday morning match.

Wetherspoon’s have always tended to avoid this type of location, as their business model is very much based on sites with a lot of existing footfall, rather than being pubs people would make a special trip to visit. But the Gateway in East Didsbury, opposite the Parrswood leisure complex, with its cinema and bowling alley, is an exception to this rule, and seems to do very good business. It’s always noticeable how busy it is, when the Griffin just up the road, a classic multi-roomed Holt’s boozer, is virtually empty. There are a handful of other Spoons in similar spots around the country.

Recently there have been several reports that the gloss had come off the family dining sector, which not too long ago was hailed as a major growth area in the pub trade. To some extent, in these locations , Wetherspoon’s are competing against family dining pubs. But they are pubs that serve food, as opposed to food pubs, and so have a wider appeal. Although they sell a lot of food, there’s no pressure to eat in Spoons, and nobody is going to judge you if you just order random items from the menu. While the food in Spoons may not be particularly brilliant, neither is that in most family dining pubs.

Another factor is that Wetherspoon’s don’t show football. I recognise that there is a place, and a demand, for TV football in pubs, even though it isn’t something I particularly care for. But the mere fact of putting it on creates a somewhat more laddish atmosphere and makes the pub less inclusive. Its absence is a key factor in maintaining their broad appeal.

Do not imagine, though, that I am some kind of Wetherspoon’s fanboy. While I recognise them as a successful and savvy company, they’re far from my favourite places to drink. They are, I believe deliberately, laid out to prevent people feeling too cosy and comfortable, to reduce customer dwell time. Their cask beer quality is very hit and miss, and even at its best always seems to be lacking a little condition. They also have a strange knack of being able to put on eight beers, none of which I particularly fancy drinking. And their food offer varies from reasonably appetising to pretty poor.

But that isn’t the point. They’re not aiming for excellence, they’re setting out to be an adequate, consistent, good-value pub that deters as few customers as possible*, and in that they undoubtedly succeed.

* Apart from some diehard opponents of Brexit, of course. Although the people who performatively boycott Wetherspoon’s are generally those who hardly ever visited anyway.

Thursday, 2 March 2023

An inspector calls

Alex Polizzi has presented The Hotel Inspector on Channel 5 since 2008. In the show, she looks at a variety of struggling hotels and guest houses and comes up with suggestions as to how they could improve their business. As the granddaughter of famous hotelier Lord Charles Forte it’s a reasonable assumption she knows what she’s talking about. I’ve watched the occasional episode and found it mildly interesting but not really essential viewing.

However, the thought has often occurred to me, and others, that there could be room for a similar show specifically looking at pubs. Many pubs do seriously ill-considered or neglectful things that surely deserve to be pointed out to them. To some extent this brief was covered by Tom Kerridge’s Saving the Great British Pub which aired in 2020, but sadly that became overtaken by Covid and ended up with a distinctly different theme.

However, Ms Polizzi is now branching out with a new programme covering a wider range of hospitality operations, including restaurants, wedding venues, tourist attractions – and pubs – and is asking for businesses to put themselves forward. It’s easy to imagine that she’ll just tell them all to go down the gastropub route, but she’s more savvy than that, and I would imagine most of those that volunteer will already be food-led pubs rather than back-street boozers.

I have to say in my experience pubs of all kinds commit a myriad of sins that are likely to be offputting to customers. Setting aside my own personal prejudices, some of the most obvious ones are:

  • Failing to publicise your opening hours and changing them on a whim
  • Not displaying menus on your website or, in urban locations, outside the door. It also baffles me why pubs don’t put menus out on tables and expect you to ask for one at the bar
  • Ill-mannered, inattentive staff. Yes, I know recruitment is hard at present, but a lot of this comes from the management approach
  • Poor hygiene standards, especially unpleasant toilets
More than other types of venues, pubs are dependent on repeat business, and so it’s important not to give customers any reason not to want to return. On the other hand, I sometimes come across pubs that seem to be ticking a lot of the right boxes but still aren’t attracting customers, and so obviously are missing out on some magic ingredient. In these days of multiple online guides and social media channels, it can be difficult to know how best to promote your pub, but one thing that is certain that, if you do create a website or Facebook page, you need to keep it updated.

It has to be said that independent pub businesses are often some of the worst offenders. At their best, they include some of the highest-quality pubs around, but in the absence of an area manager to give them a prod they can all too easily lose interest and let standards slip. They also have much more scope to apply idiosyncratic and offputting policies. And I would expect in general that most of those who apply will be independent businesses

I’m pretty sure it will be a certain type of pub that predominantly features, but even so no doubt it will make interesting viewing and I’ll definitely make a point of tuning in.

Monday, 27 February 2023

Veering off the road?

The government have announced that the £2 cap on bus fares in England is going to be extended until the end of June. Some eyebrows may have been raised at the effusive welcome CAMRA gave to this policy, which they had strongly urged their members to support.
Chairman Nik Antona said:

“Cheaper bus fares are great news for the beer and pub trade, making it affordable for people to go out to visit their locals.

“Extending the £2 bus fare scheme for England is something that we had called on Transport ministers to do so that pubs, social clubs, breweries and cider producers grappling with the cost-of-business crisis can benefit from people being able to get to the pub in an affordable and environmentally friendly way.”

Whether or not it is a desirable policy is debatable. But is it really CAMRA’s role to be campaigning for generalised subsidies to public transport? It comes across as stepping outside its campaigning objectives. Yes, it may bring some benefit to pubs, although probably less than might be imagined, but that’s only a tangential effect. It would be just as logical to campaign for a cap on taxi fares, or funding research into self-driving cars.

It probably has a lot to do with the long-standing overlap between CAMRA members and public transport enthusiasts. At one point CAMRA did set up a national public transport campaign group, although mention of it seems to have disappeared from their public website. Many taxpayers on modest incomes may well question whether it is a good use of public funds to subsidise people to go to the pub.

No doubt someone will pipe up that it will act as a deterrent to drink-driving, but in reality the idea that a higher bus fare will tempt someone to offend isn’t really credible. This is akin to the suggestion that is sometimes heard of linking drink-driving with high soft drink prices.

Public transport subsidies are not a no-brainer – it is a matter of legitimate political debate as to whether they provide a worthwhile return to the taxpayer. Given this, even if they do tempt a few more customers to visit pubs, to actively support them is exceeding CAMRA’s remit. It should go no further than observing that they may be helpful to some pubgoers.

Tuesday, 21 February 2023

Not all doom and gloom

Earlier this month, the local branch of CAMRA held its annual Good Beer Guide selection meeting in the upstairs room of the Magnet pub in Stockport. It was a very well-attended meeting, but on top of this the pub downstairs was rammed too. The pub themselves said that they had seen their busiest January for years, and this was continuing into February. Hopefully at least part of the motivation for this was a desire to put two fingers up to “Dry January”.

The Magnet is a pub that does what it sets out to do very well and is justifiably popular. On that particular Thursday evening it might well have been the busiest pub in Stockport town centre. But this clearly demonstrates that, despite all the hand-wringing about the cost-of-living crisis, there are still plenty of people around with money to spend in pubs. This is borne out by the Morning Advertiser, which reports that “The majority of operators I’ve spoken to have reported stronger than expected sales in January, with customers continuing to visit and spend well.”

I’m well aware that my pattern of pubgoing is hardly representative, but in the year so far I’ve visited a wide cross-section of pubs and seen levels of trade ranging from being the sole customer through nicely ticking over to standing room only. It seems no different from how it was pre-Covid. The one pub where I was the only customer was one that I’m confident would have been busy at other times*. Unsurprisingly, two of the busiest ones were branches of Wetherspoon’s.

I’m not denying for a minute that there are many people who are finding things a struggle at present, but equally there are lots who aren’t. Apparently foreign holiday bookings have exceeded the 2019 level. There is plenty of money out there to be spent, and pubs do themselves no favours by overdoing the doom and gloom.

* ironically, this one served me probably my best pint of the year so far

Wednesday, 15 February 2023

Hold it in!

Simon Everitt recently spotted this sign on his GBG ticking travels in the Split Chimp micropub in Whitley Bay, Northumberland. It comes across as remarkably prissy, it can’t practically be enforced, and it’s frankly unrealistic to expect customers to adhere to it. I have heard of people deliberately arranging their routines so that they can perform their bowel movements in Wetherspoon’s, but surely if someone needs one while visiting a micropub it’s not something they had planned and they don’t have that much control over the timing.

It also illustrates a wider problem with the single-WC pub or bar, which has become much more common with the rise of micropubs and other shop conversions in recent years. When I was at school I vaguely remember studying Queuing Theory in Maths. I’ve forgotten most of it, but one bit that did stick was that reducing the number of outlets would have a much greater impact on the maximum queuing time than the average.

A single WC may be acceptable in a café, but in a bar, where customers are likely to linger more, and where they’re consuming a product known for its diuretic and laxative properties, it’s likely to become problematical. If someone needs to occupy the single trap for ten minutes or more (which, without going into details, can happen) then other customers may be put in a very awkward and embarrassing position.

While I wouldn’t go so far as to want it banned under planning regulations, as a point of principle I won’t give my custom to any bar with a single WC. The tiny Circus Tavern in Manchester city centre manages to provide separate ladies’ and gents’ toilets, with a trap and a couple of urinals in the gents’, so why should they be any different? This is not a question of toilets being unisex (that’s a separate issue), but of the overall level of provision being seriously inadequate.

I have been told that planning rules state that, if you want to provide more than a single WC, one of them has be accessible to the disabled, which is reasonable enough in theory, but in practice may deter, or physically prevent, bar owners from expanding provision even if they feel it’s insufficient. The best becomes the enemy of the good.

On the other hand, of course, the much-derided Wetherspoon’s are noted for their ample toilet provision, although it can be something of a hike to get there. Plus they win numerous awards for toilet hygiene.

Monday, 13 February 2023

Speaking with forked tongue

Back in December 2021, I reported on how New Zealand was planning to introduce a kind of creeping prohibition of tobacco, with the legal purchase age being increase by one year every year. Given that tobacco is a legal product that is enjoyed by a large number of people, this is an utterly abhorrent and illiberal measure. Yes, it carries health risks, but every adult must be aware of that, and the same applies to plenty of other things people do. Also, given that smoking in public places has already been effectively denormalised already, it’s unlikely to be much of a deterrent. The main effect is likely to be handing over government revenue to the black market. It might have been thought that the departure of Jacinda Ardern might prompt a rethink, but given that her successor is someone who said that the unvaccinated should be “hunted down” that’s probably unlikely.

Now, Labour’s health spokesperson Wes Streeting has proposed that the same should be done in UK. Exactly the same issues apply – it is objectionable in principle and is likely to be impractical and problematic in operation. It will also given small shopkeepers the problem of having to establish people’s age at an ever-increasing level, unless of course they follow New Zealand’s example and restrict to tobacco sales to a small number of approved outlets, thus destroying many independent businesses.

Maybe this will never happen, but it underlines that, when it comes to lifestyle issues, whether tobacco, alcohol, food or gambling, Labour hardly has a single libertarian bone in its body. Their thoughts naturally turn to regulation, restriction, taxation and ultimately prohibition. And, while it’s obviously a legitimate position to vote in a way that goes against your personal interests, anyone imagining that a future Labour government will be good news for the pub and brewing industries in the UK, or for the consumer of alcoholic drinks, is likely to be sorely disappointed.

Yet, at the same time, former leader Ed Miliband has stated that a Labour government would be open to the legalisation of cannabis. There’s certainly a good case for this, but my support is hardly encouraged by the tendency of cannabis lobbyists to harp on about how it’s supposedly less harmful than alcohol, and states in the US that have legalised it have experienced very mixed results and completely failed to eliminate the black market. And it comes across as grossly hypocritical to seek to legalise one drug while at the same time prohibiting another, especially when in practice the two are often mixed together.

Presumably the motivation behind this is that one is fashionable, while the other isn’t, but it hardly comes across as intellectually consistent policy. It brings to mind the report I saw* that the US state of Colorado, one of the most right-on in the country, had made it illegal for employers to discriminate against cannabis users, but not tobacco users.

And of course nothing similar is ever going to be applied to alcohol, is it?

* I have definitely read this, although I don’t have a source for it.

Monday, 6 February 2023

Black power

It was reported recently that Guinness had overtaken Carling* to become, for the first time, the best-selling beer brand in the UK. The makers of Carling were quick to point out that they were still selling more in volume terms, but of course this is an admission that Guinness, which is only 0.1% ABV stronger, was achieving a price premium over them.

One of the reasons behind this is that Diageo, the owners of Guinness, have over the years been very assiduous in protecting and developing the image of their product. They have linked it to sport, particularly Rugby Union, they have stressed its Irish heritage and they have protected its position as a premium product by doing their best to avoid deep discounting. They have successfully avoided any connotations of it being an old man’s drink, despite flying in the face of modern trends by being a dark beer, and they have come up with some of the most memorable and iconic advertising of any alcohol brand.

Possibly this is helped by the fact that Guinness is the only major beer brand in Diageo’s portfolio, so they can concentrate single-mindedly on it, whereas if it belonged to a brewing conglomerate attention might be diluted. This can be compared with Stella Artois, which in the 1980s enjoyed a similar position as a respected premium product, but where the brand equity has steadily been undermined by its owners through cheapening the recipe and reducing the strength, to the extent that it is just another commodity product today.

The result is that Guinness, more than any other mass-market beer, is seen as being a cool product in pubs and bars, and very much something they have to stock. In a group of people, the choice of where to go may well be determined by the Guinness drinker objecting to the place that doesn’t stock it, just as the cask drinker would. Any pub not offering Guinness will have to contend with the problem of people asking for it by name, and then having to explain “we have XXX stout, which we think is better”, just as other cola brands had to cope with customers asking for Coke. Anyone remember “It’s McDonald’s cola, is that OK?”

This means that trying to compete with Guinness is an uphill struggle. If you are a brewer with your own pub estate, you have a captive market, and Sam Smith’s have produced their own Extra Stout for years, which many people view as superior to Guinness. Holt’s have recently emulated them with Trailblazer Stout. They have also replaced all mass-market lagers with their own products. And BrewDog have recently launched their own Black Heart stout which no doubt will find favour in craft-oriented bars. But if you’re a pubco or free trader with no brewery links, ditching Guinness may seem a foolhardy move.

Guinness is often defeated by competitor products in blindfolded taste tests, such as this one carried out by Holt’s for Trailblazer. The same was true of Coke vs Pepsi. But in fact in a blind test people tend to pick out the option with the strongest flavour, which isn’t necessarily reflected in decisions across the bar. In fact, one of Guinness’s key attractions is that it is relatively bland and inoffensive, so it doesn’t put too many people off. The same is true of top-selling brands of any products. Competitor stouts tend to emphasise the roastiness more, which may appeal to beer aficionados, but is likely to deter many mainstream drinkers. I have to say I’m not really a fan of roasty beers and, while I like dark mellow ales, I tend to steer clear of cask stouts for that reason.

Possibly this news also says something about the health of the lager market. Some people have speculated that, just as bitter superseded mild as the leading beer, and lager in its turn superseded bitter, something else will eventually take over from lager. In reality, I don’t really see this happening. These changes occurred in an insular British beer market, whereas pale lager has become the default beer worldwide. In a sense, Britain was just belatedly catching up with the rest of world.

But there’s no denying that the lager sector is looking distinctly tired. The concocted Spanish lager Madri looks less like a brilliant innovation and more like a last desperate throw of the dice. Part of the problem is that the vast majority of the established lager brands are lacklustre products that for whatever reason don’t live up to the original beers they’re based on. They’re increasingly seen as just interchangeable commodity brands. The one exception is Peroni, which is intrinsically a pretty good beer and where the brand owners seem to have taken a leaf out of Guinness’s strategy book. And maybe what the sector needs is for the existing brands to be cherished on a long-term bases rather than constantly looking for a new gimmick.

* It would be interesting to know what Carling itself superseded in the 70s or 80s

Tuesday, 31 January 2023

If you open, they will come

In the face of rocketing energy bills, many pubs are currently reducing their opening hours. They really can’t be blamed if turning the heating on is costing them more than the takings they bring in at quieter times. But it’s important to remember that, if you’re not open, the number of customers you attract is certain to be zero.

In recent years there have been major changes in the pattern of footfall in pubs in the wake of liberalised opening hours. It’s been widely noted that many pubs see an upsurge of trade in the week at around 4 pm, when many tradespeople finish work, while in town and city centres trade often builds up in the late afternoon after a quiet lunchtime, especially on Saturdays. Yet, before 1988, these were times when all pubs were firmly shut, and indeed on Saturdays many delayed their evening opening until 7 pm.

In the first few years after 1988, although all-day opening was permitted, very few pubs took it up. I remember it being virtually impossible to find anywhere open in the centres of Manchester or Stockport. But, driven by the rise of Wetherspoon’s and other High Street chains, things started to change, and by the end of the century all-day opening was pretty common. And, slowly but surely, the pattern of trade followed, with late afternoon often becoming a busy time. Pubs found that they were losing trade to their competitors if they shut at 3 and, just as importantly, finding that the early bird had caught the worm if they didn’t open until 7 pm.

The pre-1988 pattern of standardised opening hours allowed for morning opening as early as 10 am in some areas. Nowadays, that rather comes across as “tell the kids that, and they won’t believe you”, but at one time it was recognised that there was a demand for it. However, early opening was steadily eroded over the succeeding years, and by the current century it became relatively rare for pubs to open before noon, if indeed they opened at all at lunchtimes.

However, the introduction of so-called “flexible” hours from 2005 onwards allowed pubs the freedom to open earlier if they wanted to. This was enthusiastically taken up by Wetherspoon’s, pretty much all of whose pubs in England and Wales now start serving alcohol at 9 am. And, while they aren’t crowded then, they have attracted a distinct clientele who prefer drinking at that time, as I wrote back in 2019. It’s very easy to sneer at these people, but surely the whole point of flexible hours is that people can drink at a time that suits them, rather than a narrow window distated by the law and social conformity.

As I said, I fully understand the cost pressures that are currently leading pubs to trim their hours. But those are two examples of how being able to open at times when they previously weren’t able to has unlocked a seam of trade that conventional wisdom said didn’t exist.

Monday, 23 January 2023

They all add up

In my Review of 2022, I mentioned that I had visited 128 different pubs during the year. This was considerably more than in the two years of lockdowns, but still quite a bit less than in the four preceding years, which is as long as I have been keeping a record. For information, for 2016-19 the numbers were 154, 188, 203 and 207. In fact, during 2022 I had to cancel a planned holiday due to unforeseen circumstances, which would probably have bumped up the total to over 140.

However, I was struck by this review of the year by Matthew Thompson, who I know from the local CAMRA branch, who said he had only been to about half a dozen pubs. Now, I have no knowledge of his circumstances, but that obviously indicates a very different mindset. So I thought I would run a Twitter poll on how many different pubs people had visited over the year, producing the following results from an impressive turnout of 511 votes:

Obviously my followers are likely to be much keener on pubgoing than the population at large, but this produced a wide and fairly even spread of results, with the largest share going to the top category of “Over 50”. That must indicate people who are consciously seeking out pubs rather than just visiting them in the normal run of their daily life. GBG ticker Martin Taylor responded that he had been to 877 in 2022, and over 1000 in 2019, which rather puts my efforts in the shade, although I’m not really looking to visit pubs in pursuit of any specific objective.

Ever since I reached legal drinking age I’ve been fascinated by pubs. I would go out and visit various pubs with my dad, and with former school friends in the university holidays. At university in Birmingham, armed with a student railcard, I travelled as far afield as Bath and York. Remember in those days that lunchtime closing was 2.30 pm in most places in the South and Midlands, so trips had to be planned much more carefully than now. Apart from the two years of lockdown, and possibly 2001, which was something of an annus horribilis in which I spent six weeks in hospital with a shattered ankle, and was later made redundant, I would say I’ve visited at least 100 different pubs in every year of my adult life.

In the early years, a major factor was sampling different beers that I had never encountered before. At this time, the tied house system still held sway, and there were only a handful of national-distributed beers, meaning you had to travel to find particular beers. I often sought out obscure pubs just because they had a rare brew for the area. I wrote about this in detail here.

Nowadays, the situation is very much changed, with far fewer pub-owning breweries with a distinctive offer on the bar, and far more beers distributed across the country. Very often, you will walk into a free house or pubco outlet with no idea what you are likely to find, which to my mind somewhat detracts from the experience. However, I will seek out family brewer tied houses when away from my local area, and indeed in the 2010s had two mini-holidays with the partial motivation of visiting Donnington and Hook Norton pubs.

However, I increasingly found that it was the pubs themselves were the attraction, not the beers themselves. As I wrote back in 2010 in a post entitled Wooden Wombs:

At heart I have to conclude I’m more fascinated by pubs than beer – by the variation in layout and architecture, the fittings from many different eras, the ebb and flow of trade, the little rituals and quirks of pub life, the mix of customers, their interaction with the bar staff and each other, the way their clientele and atmosphere reflect the varied strands of society. Every pub is different and has its own character and its own story to tell.
And there are still plenty of pubs to explore that haven’t had the soul sucked out of them by corporate makeovers. I will also make an effort to seek out pubs on CAMRA’s National Inventory when I’m outside my local area.

I’m not setting any targets or making any predictions for 2023, but I would hope that, if all goes well, I can manage at least 150 during the year. I’ve already visited 12 in the first three weeks of the year, which would indicate an annual total over 200, but of course some of those are ones on my regular rounds which I will visit again over the course of the year.

Wednesday, 18 January 2023

Better late than never

In my post about Falling out of love with alcohol, I mentioned the British Beer & Pub Association’s detailed table of beer sales statistics, which for a long time had not been updated beyond the end of 2018. In fact, they had not been updated for so long that I had given up checking. However, on taking a look at their website, I found they had produced some newer figures, albeit only going up to the end of 2020, so still two years out of date. These can be downloaded from their website as an Excel spreadsheet.

In 2019, the last full year BC (Before Covid) they show the on-trade holding up pretty well. Total sales were 12.658 million barrels, accounting for 45% of the total beer market. This was only 0.6% down on the previous year, and indeed over the five years since 2014 they had only declined by 6.5%, an average of 1.3% a year. This is a much slower rate of decline than, say, print newspapers. In contrast, in the five years from 2006 to 2011, they fell by 25.2%, an average of 5.0% a year. Is that the sound of trumpeting I hear in the distance?

However, 2020 shows a very different story. Total sales saw a catastrophic fall of 55.1% to a mere 5.689 million barrels, representing a mere 23.6% of the total market. Indeed total beer sales fell by 14.2%. While there undoubtedly will have been some switching to wine and spirits, this rather gives the lie to the widespread claim that lockdowns led to an increase in alcohol consumption.

In the first quarter, on-trade sales were down by 18.3%, reflecting the fact that pubs were completely closed down in mid-March, and for a couple of weeks before that trade was increasingly depressed by the lengthening shadow of Covid. Then in the second quarter, which was entirely during lockdown, they fell to a mere 150,000 barrels, all of which would have been take-home sales from pubs.

In the third quarter, when pubs were finally allowed to trade with a reasonable degree of normality, sales showed a good recovery, although they were still 25% below 2019. Then in the fourth quarter they slumped to 795,000 barrels, affected by a month of full lockdown, the hopeless confusion of the tier system and the ludicrous substantial meal and mask rules. In the first quarter of 2021, when there was a full lockdown throughout, and pubs weren’t even allowed to do takeaway sales, they must have fallen to virtually zero.

It would be very interesting if and when these statistics are updated to the end of 2022 to see just how well the on-trade has been able to recover and how close it has been able to regain the pre-Covid position.

Monday, 16 January 2023

Falling out of love

Over the weekend, there was an interesting article in the Observer entitled Last orders: how we fell out of love with alcohol. This isn’t maybe the most rigorously researched piece, and it relies heavily on anecdotal evidence, but it does reflect a fundamental truth that, over the past twenty or so years, drinking alcohol has become markedly less fashionable, something I have observed on this blog on several occasions.

After reaching a post-WW1 peak around 2000, in the wake of lad culture and Cool Britannia, per capita alcohol consumption has steadily declined, and is now about 15% lower. Plus, in many situations, drinking alcohol has become less acceptable, and abstaining seen as virtuous rather than cranky. I discussed this back in 2013 in a post entitled Socially unacceptable supping.

Nor is this evenly spread across the board. While the older generation are drinking much the same, their younger counterparts have substantially cut down. “Between 2002 and 2019, the proportion of 16- to 24-year-olds in England who reported monthly drinking fell from 67% to 41%.” This clearly gives a pointer to the future direction of travel, and the fall in consumption inevitably lags behind the change in attitudes.

As something becomes less fashionable, people are more likely to prefer to do it in private than in public, which is bad news for the pub trade. According to the statistics produced by the British Beer & Pub Association, in the twenty years from 1998 to 2018 (which is as far as they go), total beer consumption fell by 22.8%, but on-trade consumption almost exactly halved. The trail of pubs now demolished or converted to alternative use is all too obvious. Some will argue that the Anteater Tap is still doing great business, while ignoring the fact that the Sir Garnet Wolseley across the road, which was ten times the size, has been replaced by flats. Even within a declining market, it is still possible to be successful, but that doesn’t make the wider narrative any less true.

In the past, a lot of drinking in pubs was centred around ritual and routine, often linked to the workplace. But all those Friday lunchtime drinks with the office team, after-work unwinders, Sunday lunchtime sessions and “I always go out with Bill and Frank for a few on Friday night” are now much diminished if not virtually extinct. If you’re no longer going to the pub out of habit, but have to make a positive choice to do so, you may well decide not to bother.

Of course you can go to the pub and drink soft drinks or non-alcoholic beers, but the people doing that are in general doing so to go along with their alcohol-drinking peers. In any social group, once a tipping point of non-drinkers is reached, they will begin to question what is the point of going to the pub in the first place.

On the other hand, the article points out that, while it undoubtedly carries health risks, throughout history alcohol has made a major contribution both to human creativity and human sociability.

That, [Professor Edward] Slingerland adds, is where alcohol comes in: put simply, it can turn the PFC (pre-frontal cortex) down a few notches and expand our minds. “Alcohol is a cultural technology,” Slingerland believes, “that we have developed to briefly get us back to our five-year-old brains when it comes to flexibility and creativity. After a few hours it wears off and we can glean the results.” Across the world, throughout history, alcohol has been associated with creatives: artists, poets, great thinkers. “And this is not a myth,” he says. “There’s good evidence it increases creativity, which as a society we need.”

Alcohol can also play a key role in fostering relationships. By temporarily turning down the PFC, we’re more inclined to trust and be open with other people. “In the same way that shaking hands started out as a way to show we aren’t carrying weapons,” says Slingerland, “drinking beers – taking our PFCs out – is like putting our mental weapons on the side. By relaxing the PFC, it’s harder to lie or fake.” And, he adds, alcohol boosts feelgood chemicals such as dopamine, serotonin and endorphins. “These don’t just make us less inclined to cheat. Because we feel positive about each other, it creates a sense of bonding that’s crucial for humankind.”

And I’ll certainly drink to that!

Friday, 13 January 2023

Limited offer

Wetherspoon’s are currently running a January Sale including price cuts across a whole range of food and drink items, including reducing the price of a pint of Ruddles Bitter to a mere 99p, in England at least. There have been the predictable complaints that this was unfair and represented predatory pricing. But, in reality, how much of an effect is it likely to have?

By definition, the opportunities to take advantage of an offer on something that is consumed at the time of purchase are much more limited than on something that can be taken home and stored for later use. It may tempt the odd person to visit Wetherspoon’s who otherwise wouldn’t have done, or encourage them to have an extra pint, but it’s hardly going to turn the market upside down. And remember that Ruddles Bitter was already priced at £1.49, so you’re only saving 50p per pint. The main benefit to Wetherspoon’s will be gaining publicity.

Low prices alone seldom provide sufficient attraction to visit pubs. You sometimes see urban pubs with signs advertising how cheap their beer is, but by and large they tend to be the less appealing ones. Yes, Wetherspoon’s do offer good value, but they also attract customers due to their long and consistent opening hours, their wide food and drink offer, and their general ambiance that doesn’t make anyone feel unwelcome. In any case, they are competing as much with fast food and casual dining outlets as with other pubs. And, over their full drinks range, they’re not as cheap as cask drinkers might imagine. The discount on cask is greater than on other beers because it’s the product where people make price comparisons.

Another factor is that people generally buy drinks in rounds rather than individually. There’s a general understanding that people don’t take the piss by ordering particularly expensive drinks when it’s someone else’s turn, but the benefit of choosing a cheap beer purely on price is diluted. If you choose Ruddles on your round and Leffe when someone else is paying your companions won’t be impressed. Wetherspoon’s probably attract a higher proportion of solo drinkers than most other pubs, but even so the majority are likely to be buying in rounds. It may be that the rise of app ordering is eroding round-buying, but I doubt whether than is a big factor amongst the Ruddles-buying classes. I am currently running a Twitter poll which so far is showing a strong preference for round-buying:

The custom of round buying is also why various attempts to introduce lower-priced, weaker “value bitters” in pubs have always been a failure. Over the years, I remember various North-West brewers trying this – Boddingtons had Old Shilling and Hydes Billy Westwood’s – and some of them were actually quite pleasant. I remember once drinking six pints of Billy Westwood’s on Sunday lunchtime in the now-demolished Moss Rose/Four Heatons near my home. But none stayed the course, as the round-buying culture, especially in traditional boozers, worked against them. Why choose a cheap product rather than the mainstream one when someone else is paying?