Pubs have of course
changed over time, and have adapted to societal shifts,
and at each turn, we bemoan the loss of the English
Pub, as we know it. In ‘Vanishing England’
Ditchfield and Roe wrote: "The trend of popular
legislation is in the direction of the diminishing
number of licensed premises and the destruction of
inns. In many towns though which in olden days the
stage coaches passed inns were almost as plentiful
as blackberries; they were needed for the numerous
passengers who journeyed along the great roads; they
are not needed now when people rush past the places
in express trains". So they wrote in 1910, but
that could equally easily be applied to today, or
any point in history, simply replace the mode of transport
with something more timely.
The latest threat
to the English Pub has been the ‘Beer Orders’,
legislation so utterly misdirected that we will be
experiencing the fallout for decades.
In a nutshell,
the Monopolies and Mergers Commission (MMC) forced
the sell-off of 14,000 pubs that were ‘tied’
to national brewers, stating that this would lead
to lower beer prices and greater choice of beer. The
‘tied’ system is an arrangement by which
a pub sells only that beer from one particular brewer,
as opposed to a Free House, which sells beer from
any supplier. But according to Professor Margaret
Slade, writing in the May 1998 issue of the Economic
Journal, these ‘Beer Orders’ have had
the opposite effect: the price of a pint in these
pubs has risen while those in Free Houses had remained
the same, adjusted for inflation; the limited range
of beers on sale remain the same; the number of national
brewers has fallen; and their respective shares of
the beer market have increased.
The ‘Beer
Orders’ legislation forced national brewers
to sell off one half of their tied houses in excess
of 2,000. (So, if a brewer owned 6,000 pubs, it was
forced to sell 2,000 of them.) In addition, tenants
of the remaining tied houses were given the right
to sell at least one cask?conditioned ale from a supplier
other than the owner, the guest beer of which I have
spoken highly in the past. None of the microbreweries
was affected since none owned more than 2,000 pubs.
Certainly in my
relatively short career in beer, prices have outstripped
inflation. I recall vividly paying 35 pence for a
pint in The Bell in Walcot Street in Bath, where I
would now pay at least £1.80, maybe even £2.00
or more.
One of the major
changes caused by the Beer Orders was the formation
of pub chains, such as Hogshead. Large corporations,
often not in the pub business in the first place,
leapt at the sudden flood of pubs on the market and
bought large blocks of property inexpensively. They
then set about the task of branding these pubs as
chains, which then turned around and established long?term
purchasing agreements with the large breweries. So
despite the change of ownership, the newly remodeled
and divested pubs continued to sell only their former
owner’s products.
So having messed
up some fine old pubs and raised the price of beer,
the Beer Orders then set about the task of breaking
up the big companies. Naturally, the opposite was
achieved. Fewer firms now controlled a larger share
of the market. These increases in brewing market concentration
were partly due to mergers (for example, Elders/Grand
Metropolitan); partly because some firms stopped brewing
(for example, Allied Lyons); and partly because some
firms stopped retailing (for example, Courage).
This is from CAMRA,
an article entitled "Beer Orders, Ten Years On":
"This
year marks the 10th anniversary of the MMC report.
The report damned the industry for working against
the public interest and spawned the ill?starred Beer
Orders and it is inevitably this background from which
we view developments. Many previous reports have concluded
that the returns given to shareholders were inadequate
and some companies face a bleak future as investors
move away from romance and an annual bash to look
for solid returns.
"It is not difficult to imagine the future, as
visible trends will continue unless changes are brought
about by Government. Logic suggests this should happen
but logic is not always evident in governmental thinking.
One great unknown must be whether the industry will
become more sensitive to its customers needs.
"The greatest change has been the movement from
vertical to horizontal integration, changing the traditional
relationship between producer and retailer and speeding
the polarization of the industry. This has in turn
lead to an increasingly standardized range of products,
many of which would not survive in a free market.
There has been a continuing loss of smaller pubs as
companies concentrate on high turnover outlets. Country
areas especially are affected and there must be a
question mark against their long-term survival unless
they are able to develop as niche retailers. As small
tied outlets what can they offer to encourage customers
to travel to them even if the drink-drive level is
not changed? Shareholder pressure will encourage these
changes whilst medium sized breweries are increasingly
caught in the middle.
"There are honorable exceptions with national
chains such as Hogsheads maintaining a wide choice
of bottled beers and a changing variety of draught
beers. Some modern themes, All Bar One, as an example,
may be safe for women but beer choice is severely
limited. There is a clear move towards café
style operations, which by their nature define beer
availability. What is evident is that at the point
when customers become aware that the outlet, be it
pub or café, is part of a chain growth slows
markedly.
"On a local basis we can find fine examples of
small pub chains offering a dynamic alternative and
being extremely successful. The micro?brewers who
have brought creative thinking to the industry, rather
like new?world winemakers, have not been able to make
a major breakthrough in volume terms. Their future
is hazy though their beers are probably not!
"There is however some considerable opportunity
for optimism if the smaller retail companies see that
the federal trends evident throughout Europe can be
mimicked in their own organization recognizing that
the modern customer wishes to be treated as an individual.
Will we, for example, see retail companies start to
break away from national suppliers and offer more
individual beer ranges? This might even lead to their
customer base growing!"
In short, the
Beer Orders created exactly the opposite effect of
what was intended, pretty much right across the board.
In addition, small village pubs like the Thwaite Arms
in Coverdale are in tricky financial waters now. Maybe
they would have been anyway, but if the Thwaite goes,
we lose more than just another business in a small
village; we lose part of the heart and soul of the
community.
As Hillaire Beloc
said, "When you have lost your inns, drown your
empty selves, for you will have lost the last of England".