Sunday, 11 October 2015

How big brewers destroyed pub culture

Back with Anthony Avis and more observations on the pub trade.

Traditionally the relationship between brewers and pub landlords had been a close one. Brewers knew that experienced, reliable tenants helped shift beer. A well-run pub was always going to sell more beer than a badly-run one. Meaning brewers, who relied on their tied estate for the vast majority of their sales, had a vested interest in attracting and retaining good-quality tenants. Poor cellarmanship could ruin your beer’s reputation.

In return, the tenant got a cheap rent and the brewer took responsibility for maintenance and improvements of the pub. It was a system of mutual benefit that worked well. Until the structure of the industry changed.

“In the 1970s tenants were suddenly expected to become acute businessmen, to pay huge rents the calculation of which confounded them, were asked to sign legal agreements they did not understand, and to have their public houses "improved" at colossal cost in ways they did not appreciate, for objects they did not endorse, and to which they were obliged to contribute very large sums for furnishings with no realistic control over the spending of their own money. Also, they had lost the traditionally understood system of advancement in the trade; they saw the large pubs, once the pinnacle of an ambitious brewery tenant's career, inevitably fall under brewery management, and the small trade houses in which a tenant might learn the ropes, closed or sold. They resisted by joining trade associations, which was dangerous, as their company landlords marked them out as subversionists and therefore unsound. Unthinkingly, the companies were cutting off the new tenants, as they had fewer small pubs for letting as training grounds, and the experienced tenants were being held where they were and their rents greatly increased; the demise of the old established tenanted system was assured. The height of this folly on the part of brewery companies was reached when those companies began selling parcels of their estates to one another, with no regard for the feelings of the tenants; and the last vestiges of benevolent paternalism, which had served the industry very well for many generations finally collapsed. Only the head office bureaucrats of the huge breweries could have devised the idiocy of "inntrepreneur" leasing, so remote was its principle from the traditional brewery/ tenant relationship. Leases of baffling complexity and length were offered to existing tenants on a sign up or get out basis for long terms of years at very high rents, with the suggestion that a tenant could work up the business and then sell the balance of his lease at a profit.”
"The Brewing Industry 1950 - 1990", by Anthony Avis, 1997, pages 28 - 29.

Now that’s news to me. I didn’t realise there was a system of promotion at work. With the ultimate reward a large and profitable pub. Avis clearly isn’t keen on the pubco model. But they were never going to have the same relationship with a tenant as regional breweries had. And while a brewers main interest in a tied estate was shifting beer, pubcos are all about making money.

But it wasn’t just the brewer/tenant relationship that changed. There was a complete switch in the type of customer pubs tried to attract:

“It was all made to sound very attractive and easy; it did not turn out that way at all. The old relationship between the breweries and tenants faded, and today only the few small companies still surviving carry on the old style paternalism. With the disappearance of the small tenanted public house has also disappeared the former stalwart customer; the breweries ceased their interest in their prime patrons, the lower to middle class, middle aged married man and his wife. Led by their own advertising and the perception that they were the people who had the money to spend, the big companies sought to attract the young single men for drinking, and the young married couples for food; the pub ceased to be a place of informal conviviality, with traditional pleasures. The custom has been changed by design, and the older generation driven out.”
"The Brewing Industry 1950 - 1990", by Anthony Avis, 1997, page 29.

Established regional brewers still retain, to some extent, the old tied house system. Unfortunately, the majority of pubs are owned by pub companies.

It’s obvious to anyone who has seen any beer adverts over the last 30 or 40 years that they’re aimed at the young. Obsessed with the disposable income of the young, pubs turned their backs on older customers. I saw the change happen myself. If I compare Newark’s pubs in the 1970’s to today, there are huge differences. Back then a couple of pubs went for the young crowd, but most were aimed either a wider clientele or an older crowd. Today pubs there have few customers over 35 most evenings.

This is a slightly odd statement from someone right at the heart of brewery consolidation:

“The curious thing is that the big brewery companies seem unable to realise the effect of their own actions and policies, of devouring one another until only a handful are left, of restricting drink manufacturers without tied estates access to sell their products, of creating strife among their own tenants, of closing local breweries and limiting choice. First, the EEC took a look at the structure of the brewing industry in the UK, and did not like what it saw; eventually, the UK government had to do something about freeing the industry and permitting competition. It made the Beer Orders, forcing the brewery companies to sell off tied houses above a certain number, and requiring them to allow sales of competitors' products in those they retained. Like most rushed actions, the Orders did not deal with the problems, and brought chaos. Lord Young, who delighted Mrs Thatcher by producing solutions instead of problems, surpassed himself - he replaced one set of problems with another.”
"The Brewing Industry 1950 - 1990", by Anthony Avis, 1997, page 29.

I’m not sure it was all the fault of the big brewers. Unwise legislation encouraged them to act in a way that was detrimental to pub culture. Many, including CAMRA, welcomed the Beer Orders at the time. A few wise head in the industry did predict what would happen: that brewers would either dispose of their pubs or their breweries to dodge the effect of the legislation.

You could argue that the Beer Orders ultimately destroyed UK-owned brewing on any scale. I certainly didn’t see that happening. It was a shock how quickly the Big Six dissolved into nothing. And to think that in the early 1970’s Britain had some of the largest brewing groups in the world.


Curmudgeon said...

It's certainly something I've noticed that the established married couples who were once a mainstay of pubs' wet trade have now largely disappeared.

Anonymous said...

My recollection is that when property prices started to rise the pub owners thought that their returns on the value of the properties were not enough.
I've already mentioned a Bateman's pub with rent at just £15 a quarter , the premises had long since been paid for and the cost forgotten.The brewery just used it as a low cost retail outlet.This was the general pattern.
But what was happening on the property market will have caused the accountants to look again at what their pubs were worth.Rents rose but to get more trade the premises were often refurbished , which in turn incurred further costs.The overall result was the loss of the old regime, tired yet comfortable pubs, long term landlords and cheap beer.

Stonch said...

I'm from Westoe in South Shields. My mum remembers the smell of the brewery very well when she was a child.