Beer in 1958 (part three)

It’s time to take a look at the tied house system. Something that was integral to the 1950’s brewing industry.

“Amalgamation has a special significance because of the tied house system. Breweries—with the conspicuous exception of Guinness (with the largest output of all)—have tied houses which they own and maintain, and usually let to tenants (though in some they appoint managers), at which their beers are sold more or less exclusively. The tied house may stock some bottled beers other than the owner's own makes—rather more than in the past; it will sell spirits and possibly wine and soft drinks (which the owner will probably provide); but its raison d'etre for the owner is as a retail outlet for his main products. The responsibility is a heavy one, especially for the larger companies that have upwards of 1,000 houses — one at least has over 4,000. It involves immense property problems. An even greater task is selecting the publicans, men (or sometimes women) who will efficiently look after both the bar and the beer. (It is said to be the only job for which police approval is required.)”
"Beer in Britain", 1960, page 5.

The bottled beers mentioned were a handful of national brands. Things like Bass Red Triangle, Worthington White Shield, Guinness Extra Stout and a few others. Types of beers which many brewers didn’t produce. And we shouldn’t forget that the brewer buying these beers in often bottled them themselves. Meaning that they got some of the production profit.

Of course tied house estates grew to much more than 4,000 pubs. This is from when the Big Seven were about at their peak:

Tied house estates in 1974
Bewery	On Licences
Bass Charrington	9,256
Allied Breweries	7,665
Whitbread	7,865
Watney/Grand Met	5,946
Scottish & Newcastle	1,678
Courage	5,921
Guinness	0
Total Big Seven	38,331
Others	13,800
Source:
“The Brewing Industry, a Guide to Historical Records” by Lesley Richmond & Alison Turton.

The biggest change in British brewing over the last 100 years was the destruction of the tied house system. Or at least in terms of vertically integrated breweries. There are still massive estates of pubs, but they aren’t owned by breweries. The huge difference is that under the old system landlords were obliged to buy their beer from the owning brewery. Now they still have to buy beer form the pub’s owner, but this isn’t necessarily from one brewer. In theory, landlords now have a much greater choice of what they can sell.

Of course, the old type of tied house lives on amongst regional brewers. But this is a much lower percentage of the total. Even the largest, Greene King, only owns 1,600 pubs*.

Economic pressures were already forcing some pubs to close:

“With the falling consumption of beer in them, the business of some of the 70,000 public houses in England and Wales has become too small to pay. In isolated villages the owners may run a house at a loss for social reasons. In larger centres some discreet closing of unprofitable houses occurs. This is only partially offset by the opening of new ones where population grows—in the new towns for example. For these some people advocated public ownership; but they failed, and the numbers and locations are decided in joint discussions between the new town authorities and brewers. The sole instance of public ownership in practice, the Carlisle experiment, reflects a movement which for the time being at any rate has lost its force.”
"Beer in Britain", 1960, page 5.

The author is pretty much spot on about the number of pubs in England and Wales:

Pub licences in England and Wales 1950 - 1960
Date	Full	Beer / wine	Total Pubs
1950	59,054	14,429	73,483
1951	59,757	13,664	73,421
1952	60,333	13,035	73,368
1953	60,869	12,351	73,220
1954	61,265	11,708	72,973
1955	60,670	10,574	71,244
1956	61,087	9,788	70,875
1957	61,471	8,882	70,353
1958	61,762	8,151	69,913
1959	62,039	7,416	69,455
1960	63,682	5,502	69,184
Source:
"Brewers' Almanack 1971", page 83.

Brewers were appalled at the idea of state-owned pubs in new towns, an idea bandied about by the Labour government elected in 1945. New towns were a rare chance to build large, modern pubs and brewers didn’t want to see the state grab these prime sites. Labour were voted out of office before their plan could be implemented.

Notice an interesting fact about pub numbers? While the overall total was falling, the number of fully-licensed pubs – ones selling spirits as well as beer and wine – was increasing. That’s because brewers were keen to convert their beer houses to fully licensed ones, which were reckoned to be more profitable.

A tied estate was expensive to keep in good order. But good quality pubs were essential if a brewer wanted to maintain or even increase sales.

“The brewers spend heavily to improve the amenities and broaden the attraction of their houses. Those who sell mainly—as much as 80 or 90 per cent, of their output—through their own houses measure this cost ruefully when they sell the rival bottled products with national names, whose selling costs, they imply, they are carrying. Yet the business of the "national" brewer, who in the extreme case sells virtually none through his own houses, itself carries heavy selling costs in advertising and transport. What they send, for example, from London to Scotland by road tanker to be bottled there can surely give but an exiguous profit.”
"Beer in Britain", 1960, page 5.

Later national brewers – the Big Six – sold most of their beer in tied houses. But the ones meant here operated in a very different way. Guinness had no tied houses and Bass and Worthington had few. They relied on selling their beer – usually in bottled form, though Bass was sometimes available on draught – in competitors’ pubs. Only Guinness was able to retain this model through the 1960’s and 1970’s.



* Greene King website.