Thursday, 23 August 2012

How To Get It Completely Wrong ...

On Tuesday, I read in the Publican's Morning Advertiser, that Greene King was in support of minimum pricing (and my thoughts on that are well documented here and elsewhere) proving that dis-jointed thinking is not the sole reserve of the nuMPties in Westminster ... apart from the premise that minimum pricing won't be the magic bullet to cure all Society's alcohol related problems, it is just another 'stealth tax' that will deepen the problems of the brewing industry and the pub trade. What really got my goat, aside from the staggering naivety of this major player in the UK hospitality industry, was that they think that minimum pricing is a "supportive measure" for them, their colleagues in brewing, their customers in the pub trade and their own managed house business.

Yesterday, I read in that same august journal, that Adnams have a fairly peculiar view on the beer duty escalator, in that whilst they think the escalator is a bad thing, they also think that the £200,000 duty subsidy that micro-brewers receive is a bad thing too.

Call me a conspiracy nut if you like, but is this the beginnings of a concerted effort by national and regional brewers to squeeze the little guy out of the market? Imagine a couple of years down the line when not only is there an escalator for beer duty, but also one for minimum pricing and as a hard-pressed Chancellor looks at every more 'imaginative' ways to chase his holy grail (deficit reduction) that the subsidies to a still emerging sector of the brewing industry gets cut off at the knees by reducing, or even completely removing, the duty subsidy for micro-brewers.

For these small artisan brewers who have contributed so much to the increase in the cask and craft ale market (both on and off trade) and are widely recognised as being the saviour of a good proportion of the dwindling national estate of pubs, this will be the perfect storm. Reduced or zero duty subsidy will mean inevitable price rises at their, albeit tiny, factory gates or as will be more likely another unsustainable cost that they simply cannot absorb and go belly up.

Oh and don't imagine for a moment that the big pubcos or supermarkets will move an inch on their purchasing prices to help these minnows of the brewing world, they'll be more than happy to carry on gouging prices at their goods inwards gates. The former will simply pass the cost on and the latter will happily absorb the minute amount of extra duty that minimum pricing will add to their retail prices.

Give it a couple of years and the staggering exponential growth in local brewers producing interesting beers will falter and within a couple more we'll be back to the position we were in a few years ago where instead of over a thousand brewers in the country they'll be just a couple of hundred, churning out mass-produced and in some cases undrinkable muck. So much for the precious 'free market' and the choice it brings consumers.

So Greene King et al, get your act sorted, put aside commercial rivalry (between your super-sized companies and the tiny entrepreneurs in your industry) and use the considerable economic and political clout you have to tell this (and future) administrations that enough is enough and to stop screwing up brewing and the vital social institutions that they supply. Or it won't just be Quentin Letts on Radio 4 asking "What's the point of pubs?" it will be the very people who need them as one of the most socially cohesive businesses in the UK who are asking what's the point?

As the premise of the program is that more and more pubs are like restaurants anyway (and a jolly good listen it is too) many pub operators might begin to ask the same question themselves. Especially when you learn that Mitchell & Butlers are in the process of rolling out even more 'take-away' food operations in its bid to dominate out of home dining and, it would appear, the take-out market.  Which will see the demise of even more pubs as greater numbers 'squeezed' consumers resort to tucking into an M&B take-away "gourmet burger" and sup on that minimum priced can of lout, whilst watching that other great knackerer of the the pub industry (Sky) showing over-paid, mediocre prima-donna, 'professional' footballers take time out from their inane Tweets to dive at the ground ... talk about dystopian future.

No wonder that so many young adults (18-24 apparently) wouldn't consider a career in hospitality ... who would invest their time and energy in an industry that not only appears to be in terminal decline but also at war with itself? ... and I was feeling so good after the Olympics if nurse would kindly bring me my medication and prevent my head from exploding ...

1 comment:

Curmudgeon said...

Indeed - as I've often said, the more the drinks trade squabble amongst themselves, the more the anti-drink lobby will be chortling into their sarsaparilla.

And you didn't even mention cider duty, which is another favourite bugbear of the brewing lobby.