The future of the pub
What does the future hold for the British pub? As well-worn a question as that is, satisfactory answers are hard to come by. Up to 25 pubs are still closing evey week* and everyone thinks they know why. Britain has changed and lots of pubs haven’t. The smoking ban has chased drinkers away. Beer is over-taxed. The drink-driving laws have been fatal for country inns.
All of those reasons may or may not be important – beer is ludicrously over-taxed – but few of them have been as persistently cited as the ‘beer tie’. This is the agreement under which a publican buys beer from the owner of the pub, which might be a brewery or, more often, a pub company. The latter group has become something of a punching bag in recent years. Given their power, it’s easy to see why: the two biggest pubcos – Enterprise and Punch – own around 7500 pubs each, and they’re accused of all manner of bad behaviour. A recent report by the Institute for Public Policy Research found that tied publicans were not as profitable as those who were untied, and many felt the beer tie was a significant factor in their financial problems.
Government has got involved. There have been a number of parliamentary enquiries in the last few years, the most recent having taken place before Parliament broke up for the summer. The beer tie is under increasing pressure; many drinkers, who blame it for bland beer selections and high prices, would be more than happy to see the back of it.
Not everyone, though, is so critical. The pubcos are inevitably committed to it – with some interesting exceptions – but so are Britain’s oldest traditional breweries. Paul Wells (above), chairman of the Independent Family Brewers of Britain (IFBB), was one of those called to appear before the Business, Innovation and Skills Committee (BISC). And although he was rather underwhelmed with his time in front of the committee (“I hardly said anything actually, it was all rather disappointing,” he says. “After about an hour and a half they finally asked me one question”), he is very clear on the importance of the tie to his members.
“I think there’s a better recognition now of the role brewers play in pub culture,” he says. “We’ve always been a bit worried that the idea of the tie was being very tarnished. A lot of people in Westminster circles had no idea that it was anything other than a bad thing. There is a whole aspect of the tie that is very creative and very positive. It has been around for hundreds of years and it does a good job.”
In what way does it do “a good job”? By looking after pubs, Wells says. Breweries tend to operate tenancies – whereby they look after the upkeep of the building – rather than leases, which pubcos often use and which leave maintenance to the licensee. “Brewers tend to be pub-owning companies that operate a brewery,” Wells says. “I think if the tie wasn’t there, those would not be breweries for long. If all of their pubs could take beer from wherever they chose, what would be the point of owning that pub at that point? You wouldn’t reinvest in it if you weren’t getting the income from it.”
The IFBB has 29 members, including some of the most respected brewers in Britain - such as Timothy Taylor and Harvey’s. They’re responsible for about 4000 pubs – around 5 per cent of the market – and Wells argues that they are an essential part of Britain’s pub culture.
“It helps, in the UK, to provide a very strong local brewing tradition,” he says. “There’s a strong tradition in Kent with Shepherd Neame, up here in Bedford in Charles Wells, down in Dorset it’s Hall and Woodhouse. In a sense they are the regional brewing tradition that we should guard pretty carefully.”
The BISC should report early in the new Parliament, but whatever their decision Wells believes more needs to be done to defend a sector that has taken a battering in recent years. He believes pubs will continue to close whatever but there is still much that can be done. “I think there will be fewer pubs in the future,” he says. “That’s partly down to the way in which the pub industry has been structured. Because there’s been a strong run on property prices, it tends to be dominated by these huge groups who bought themselves vast packets of pubs. Investment has been patchy.
“The consumer has changed. There are so many more leisure opportunities now than even one generation ago.”
And what of microbrewers, many of whom have real trouble getting their beer into local pubs? Wells sympathises, but points out that many of his members are operating at a significant disadvantage thanks to progressive beer duty, a system introduced by Gordon Brown as chancellor in 2002 which allows the smallest brewers to pay less tax. It has led to an explosion of microbreweries across the UK.
“There’s a degree of unfairness now if you are on the margins,” says Wells. “The very small family brewers are just above the level where you get the progressive beer duty so they do suffer by being surrounded by people who can make their beer at a much lower cost.”
Some IFBB members, however, have been actively helpful to smaller brewers. Everards in Leicestershire run Project William, which helps microbreweries to buy run-down or closed pubs (such as The Greyhound, pictured, a Newcastle under Lyme pub operated by local brewers Titanic). Well’s own company, Charles Wells, is happy for publicans to offer microbrewery beer. “At Charles Wells, when there’s a strong demand for microbrewery beers in a particular pub, we let them take those beers,” he says. “We think it hinges around helping the licensee. Let’s be sensible, guys, and have our beers from Charles Wells, and if you want to have ‘Old Dog’s Breath’ on the end of the bar then that’s fine, we’ll make an arrangement.”
The beer tie, then, is evolving but Wells is insistent abolition would be a terrible mistake. He points out that the scale his members operate on (Charles Wells has around 240 pubs) means they need to be treated differently from the pub pubcos: “When an owning company has thousands of pubs its a challenge to get to know them all. When ownership becomes very prolific it takes away the individual relationships which makes things work well.”
“I think its pretty much understood that we are part of the industry that is working well,” he adds. “I think there’s a general agreement that brewers should be allowed to tie pubs whether they have one, two, three pubs or 100. That helps maintain manufacturing. Goodness knows we need that.”
*according to the most recent figures from the British Beer & Pub Association
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