Tuesday, 21 September 2010

Trade Union is right on pubs

Imagine a meeting between a brewery chief exec and the beer buyer from Tesco. "How much Old Scrotum can you brew? 3m litres a year? Fine. We'll take 1m litres at 22p a litre, packaged in 330ml tins in 4-packs." The stunned Chief Exec, grateful for the contract and the guaranteed sales, will then work out how to make his margin on the remainder of his production by increasing charges to tenanted pubs, both rents and wholesale beer prices. The Tesco contract will lead directly to the closure of eleven village pubs. 


Few pub landlords are owners. Most are tenants. The tied house is still the norm rather than the exception. Becoming a pub landlord was also, like grammar schools, one of the highways of upward social mobility for the offspring of landlords; Jamie Oliver's dad was a publican. Landlords were also informal local leaders, from the local stream, of the local people, but embodying the upholding of the law; any criminal activity would lead to the magistrates refusing a licence and having to take down that statutory shingle above the front door. 


So I think Paul Kenny of the GMB has the right of it when he says to the Indie today:
"A warning from BBPA on pub closures is like another instance of Jesse James warning the people of the Wild West to beware of train robbers. BBPA is the last body anyone interested in thriving pubs should listen to.
"It is the artificially high rents and high wholesale prices charged by BBPA pubco members to tied pub tenants that has led to artificially high prices for drinks in pubs and led to drinkers deserting rural and urban pubs in droves.
"Drinkers are refusing to pay an additional pound per drink needed to pay interest to offshore bondholders of the pubcos. This has been a major factor in the spate of pub closures and the low income for the pub tenants in recent years.
"This week GMB published data which shows that by 2009 alcohol sales in the on trade were 25% down on 2002 levels. In contrast by 2008 alcohol sales from supermarkets and off licences were up by 21.1% on 2002 levels. In recent times the recession has impacted but off sales are still over 12% higher than in 2002. Retail prices are what are driving this change. Wetherspoons have thrived over this same period which bears out this point.
"Rural campaigners who want to save village pubs should help GMB get rid of the 'tie' and the high prices that follow it."

14 comments:

Elby the Beserk said...

Quite. Our local has now shut twice in the past two years. Now up for auction.

Blue Eyes said...

Yup. Pub drinking has become the preserve of the middle classes.

Anonymous said...

Isn't pub tenancy fools gold?

It seems to me that the pub across the road from me has a new set of gullible tenants every six months who rapidly lose all their investment when they realise they'll never make a profit on their unrealistic dreams of pub management?

Robert said...

We should also bring the smokers in from the cold. These people are real heroes in this day and age. They drink outside pubs at pub prices and in the main smoke taxed cigarettes. Their contribution to the coalition's defecit reduction should not go unrewarded.

(I am a non smoker drinking inside in empty pub.)

Anonymous said...

Quite illuminating Radders. I had worked out the fact that Tesbury's had a hand in pub decline through selling cheap alcohol but hadn't got quite as far as them screwing the brewery Co so that brewery profits have to be recovered from tied landlords. I get it now!

Coney Island

Anonymous said...

Oh ,please, Ladies and Gentlemen,
let us get some basic honest
realspeak on the closing of, or
near empty pubs.
We have had Pubcos for years
We have had cheap shop beer for
years.
We have had many recessions and depressions over the years.
We had all these before July 2007.
Why cant people,just for once,
face the simple truth about the issue,Why cant high profile commentators and politicians just
admit what the vast majority of us
know,let those in power show some
courage and say what has to be said.Had the Labour Party kept to
its 2005 manifesto promise ,we
would not be even discussing this problem here.

The Saxon Wall

Gordon the Fence Post Tortoise said...

@Saxon Wall

seconded.

The omission of any reference to the smoking ban is spinelessness and ostrich type cowardice on a grand scale.

Having said that - the abuse / pitiful wages / slavery that many tenants are subjected to must be dealt with.

English Pensioner said...

Our local has just converted about 2/3 of the previous drinking are into a restaurant, apparently it's the only chance that they have of making a profit.
Among other things, more wine is sold with meals which provides better profits.

The result of this is that far more people are drinking at home; one group that I know who used to drink there regularly on a Tuesday after their weekly club meeting, now have a rota for drinking at one of their homes and a kitty so that the next on the list can get the beer in from the supermarket. As my friend pointed out, the beer is half the price, they can sit down and talk, which they could no longer do in the overcrowded remaining bar area. And the few who smoke can slip out into the garden or conservatory for a quick puff. Nor is their a police car parked across the road watching them as the come out of the car park.
Maybe the bell-ringers, of which I'm a member will start to do the same, thus breaking a centuries old tradition of visiting the pub after the weekly practice.

Edward Spalton said...

I don't know whether it still exists in these New Labour days but there used to be a Labour Party song book with two songs highly relevant to this matter

"I'm the man, the very fat man, that waters the workers' beer" and

"As soon as this pub closes, the revolution starts"

Dick Puddlecote said...

Nice of unions to ride to the rescue of pubs at last. Where were they in 2007?

Could it be that now they have a double 'capitalist' target of Tesco and Pubcos, instead of a Labour government which they funded?

It's fair to say that this article truly surprises me, Raedwald.

Anonymous said...

Well said Gordon. The Pubco tenancies are ourageous and need to overhauled from top to bottom. But the elephant in the room with regard to pub closures is, as always, the smoking ban.

Tenancies, bad as they are, have been with us for a long time, as has cheap supermarket beer and high taxes on booze. The fact that closures jumped almost to the month the ban came in (as they did in Ireland and Scotland before them, both bans introduced in far healthier economic times) proves this point without a shadow of a doubt. In fact, it amazes me when I see commentators say, "Well, more people are drinking at home" as if this is some sort of strange cultural shift where the stars aligned perfectly and people suddenly decided to not go to the pub. No, rather milions are now made to feel unwelcome and are not willing to stand in the rain paying pub prices when they can meet their friends in comfort and, as an added bonus, drink cheaper booze.

Weekend Yachtsman said...

Practically everything Nu-Lab militates against pubs, especially country pubs.

There's the smoking ban thing, there's the drink-driving thing, there's the minimum wage, Elf 'n Safety, EHO's, there are state-sponsored agent provocateurs against the various age limits, there are many more hassles like all these. It's no wonder so many people can't cope or decide the effort is not worth the (minimal) return.

You'd almost think the State had something against free association of people in a place where they can have un-monitored conversations.

Anonymous said...

Weekend Yachtsman - agreed re the place to talk in private. In fact this all falls under the bracket of "localism". Places to meet up that aren't government controlled? Perish thought...and such thoughts did indeed perish under Labour.

Coney Island

Bill Sticker said...

In the 1980's some friends in the licensed trade cited the increasing cost of brewery 'barrelage' as one of their reasons for moving on. In our village local this happened a number of times all through to the early 90's. Then my one time favourite watering hole went 'Gastropub' and apparently changes licensee every Winter.

It seems the brewery practice of fleecing licensees has not changed.