Bassett Pub Company expands whilst others decline

The South Wales-based JW Bassett Pub Company have announced a ninth pub to their estate which already covers pubs from Penarth to Kilburn. The freehold of the former bar YK in Elm Street, Roath, Cardiff has been aquired and the company is planning to revert the late-Victorian pub back to its original name, the Four Elms and to refurbish the pub in the same style as other JWB pubs such as Queen's Vaults and the Pantmawr.
Good to see a pub saved from the developers and not being turned into flats, if any company can make this pub a success its Jon Bassett and his team.

Elsewhere in Cardiff, the Bertram has closed and is now boarded up, the likelihood it will become flats and the Echo reports it. Interview with me in there where I blame the smoking ban and the duty rises as to reasons it closed.  Plus it had been run by Punch who seem to be getting out of the South Wales pub business.

Above: the Bertram, pictured last year

How much do pubs pay for our beer?

With prices almost hitting £3 a pint in some pubs, it would be interesting to see how much pubs actually buy there beer in at. Large pub companies such as Punch or Enterprise have huge buying in power, i.e., they can bulk buy beer in, unfortunately they then add a premium onto the barrel when they sell it on to their tenant in the pub. But how much do they actually pay to buy in the beer in the first place? Well brewers are naturally secretive about their wholesale prices with regards to pub companies and of course the pub companies themselves will not let on how much they buy beer in for. A friendly manager at a JD Wetherspoons (yes there are some Brew Wales still corresponds with) passed on their buying in prices which make interesting reading:

ABV Beer Price 9 Gallons

3.7% O'Hanlons Firefly £40.23

3.7% Caledonian Deuchars IPA £47.10

4.0% ABV Butcombe Bitter £43.50

4.4% Sharps Own £44.12

4.5% Brains Rev James £44.79

4.7% Exe Valley Devon Gold £47.50

4.8% Harviestoun Schiehallion £58.03

5.0% Stonehenge Danish Dynamite £50.00

There are a lot more on the price list but this gives you the idea of the amount a pub co such JD Wetherspoon pays brewers for their beers. Now JDW have around 700 pubs, pub companies such as Punch have around 9000 pubs and Enterprise have around 7000 so just imagine the discounts the pub companies are able to achieve from brewers with such large bulk buying power. A few months ago when JD Wetherspoon were selling Greene King IPA at 99p a pint, one Enterprise tenant told Brew Wales that that he could not even buy the beer in at that price so how was he supposed to compete with Wetherspoons? Which is the big problem. The only way for the pubs owned by the pub companies to compete with and even to survive against the alcohol warehouses filled with Chavs that dominate our city centres would be for a relaxation of the beer tie for pubs owned by the pub cos, which would allow these tied pubs to compete more fairly with other establishments. After all it is in the best interests of everyone to see pubs flourish, at the moment in Newport City Centre the company that puts metal gratings onto pub windows seems to be doing a very good trade! An empty, derelict building is doing nothing for the City, yet if that pub were allowed to compete in a fair and open market then it is highly unlikely it would have closed in the first place.

The Business and Enterprise Committee have recommended the Pub Co model be investigated by the Competition Commission and the Chief Executive of Punch Taverns, Giles Thorley, has written to Members of Parliament arguing that an investigation into the beer tie would be “a waste of time and resources”.

Well he would say that, wouldn't he.

The Publican have a few comments on the statement made by Giles Thorley here.

CAMRA have announced that they will be launching a 'super complaint' on the beer tie with the Office of Fair Trading by the end of June.

Pubs in Parliament

Thursday 26th March saw an Adjournment Debate in the House of Commons on pubs and only 5 members of the House could spare the time away from their subsidised bars and restaurants, shagging in their offices and tax-payer funded second homes to actually attend this debate. The teetotal Prime Minister was of course on his world tour, where he gave politicians in South America the chance to make fun of him in ways that are usually only reserved for Conservative MEPs.

Now Thursday afternoons are not the busiest times in Parliament as many MPs head off back to their constituencies on that day to be ready (sober) for Friday morning surgeries, but if the Members for Ribble Valley and Selby, hardly close to London, were able to attend then I would have hoped that other Members of Parliament would have been present in the Chamber.
The debate was launched by Laurence Robertson MP for Tewkesbury, who came up with some interesting facts:

• The Drinks Industry contributes £14.79 billion a year to the economy (Source: House of Commons library)
• Each pub contributes an average of about £90,000 in taxes
• 84% of pubs are family-run businesses
• 350,000 people are directly employed by pubs
• On average, each pub contributes about £3,000 to charities in their areas
• Since the last Budget, more than 2,000 pubs have closed, costing the Government £180 million in lost revenue, with the loss of 20,000 jobs
• In the Tewkesbury Constituency 11 pubs have closed since June 2005
• An increase in alcohol duty in the 2009 budget would result in an additional 75,000 jobs lost in the following two years. (Oxford Economics)
• 39 pubs a week are closing

The MP for Tewkesbury also raised the problem of the pub companies that own the majority of the pubs in the UK. When the Monopolies and Mergers Commission investigated the Big Breweries, they recommended breaking up their empires. For instance, Bass as a brewer also had 7190 pubs, today Punch Taverns has 9095 pubs (although they sold 5 to Fullers recently). If Bass had a monopoly that was considered unfair then why is it that a pub company that owns more pubs not considered an unfair monopoly?

There has been a report by the Select Committee on Business and Enterprise on the monopoly of the pubcos, but this is yet to be published. Laurence Robertson MP also stated that only 14% of pub closures are of pubs owned by the top six pubcos, a figure which is wholly out of scale in South Wales, where the I estimate the number is closer to 80%.

John Grogan MP for Selby raised the possibility of extending rate relief, already available to rural pubs, to pubs in market towns and suburbs, in fact to any 'community pub'.
Nigel Evans MP for Ribble Valley raised the point of the high charges for Sky Sports channels for major sporting events.

The last two paragraphs of Laurence Robertson's speech I print in full from Hansard below:
“We would like to see, as all small businesses would, an end to the drip-drip regulation that affects all businesses, but small ones disproportionately. We need to allow diversification—perhaps post offices could be put in pubs—and we need a simplified planning system for smaller planning applications. I have said that mandatory rate relief should be considered, and there should not be any increase in business rates this year. As I said, the inflation figure is now nil anyway.
I stand to be corrected, but I understand that the Government have not yet responded to the excellent report on the community pub inquiry produced by my hon. Friend and his team. Perhaps they could respond to the excellent suggestions in it. I look forward to hearing what the Minister has to say, and I thank him again for attending. Pubs are well worth saving, for the reasons that I have given—their economic value and their value to the community. To pinch a quotation from my hon. Friend’s excellent report, the writer and one-time MP Hilaire Belloc said:
“When you have lost your inns, drown your empty selves, for you will have lost the last of England.”
I think he had it about right”.

The Government response was given by Gerry Sutcliffe MP, Parliamentary Under-Secretary of State for Culture, Media and Sport, who acknowledged that the ideas about the role community pubs can play are excellent.
“In many cases, customers are put off going to pubs in town centres, for example, because of the violence that takes place”.
So the Minister accepts that town and city centres have become no-go areas and yet this Government has done nothing to halt the domination of town centres by superpubs where the majority of the problem lies. Even the police agree the problem lies with the superpubs as in Newport they have asked them to use plastic cups on Fridays and Saturdays. By ask of course, insist is meant and certain superpub operators were only to glad to suck up to the Gwent Constabulary, although one pub owned by an independent brewery told the police where to go as their company solicitor said, “The request has no basis in law”. Until a Government can address this issue with Prima Facie legislation, rather than the whims of the local Bobbies, then we will still have the problems in city centres.

The Under-Secretary also stated that the government will will give a response soon to the Parliamentary Beer Club inquiry, although he refused to say what the response would be! Great that should help reduce pub closures! He also stated that the enterprise credit guarantee scheme has been extended to all types of smaller pubs and will simplify the process for making minor variations to licenses as well as increasing the stakes and prizes for pub gaming machines. Now is the enterprise credit guarantee schemes one of those ideas from the teetotal one-eyed Jock in 10 Downing Street which is not working? Great another pointless promise from the Government.

An interesting quote from the Under-Secretary was that “a representative of Alcohol Concern said that the idea of community pubs was a good one”. So the state-funded fake charity Alcohol Concern now supports pubs? I somehow don't believe that the leaders of the new Temperance Movement will ever support pubs, but then I am more cynical than an Under-Secretary at the Department of Culture, Media and Sport, a part of the Government with a title that reminds one more of a totalitarian state of Hitler or Stalin, than of an elected Government.

Gerry Sutcliffe MP summed up the debate with, “The pub is a traditional part of life here in the United Kingdom, and we must do what we can to ensure that it continues. Pubs face many challenges, but I think we are all united in wanting to advance consistent arguments in favour of enabling as many as possible to survive......What we are talking about is responsible drinking, supervised drinking, and ensuring that people drink reasonably in a safe environment”.

So does that last sentence mean doormen for every pub? – already a fact in City Centres on Friday and Saturday nights – something that does not mean safer City Centres as the Under-Secretary already referred to. Or does it mean plastic cups in every pub? Or does it mean legislation to stop the dominance of the superpub in City Centres? Whatever it did mean, a Parliamentary debate on the pub that only attracts 5 MPs is not going to achieve any quick fixes for the industry, or for that matter any long term fixes. Halves of shandies all round for that I think.