Monday, May 11, 2009

If the tie goes, regionals suffer

@Edward Compton. A measured response, Edward, but I struggle to see where the 'vituperative' comments come from on Fair Pint's side, except perhaps from indvdual members defending themselves against some extraodrinary attacks and accusatons which have been made against us by a very few propubco posters whose campaign aganst Fair Pint s bordering on the maniacal.

Fair Pint's argument for fairness in a palpably unfair market is strong and does not need to be defended with vituperation.

Roger Protz's sagacity, tastebuds and long standing in the beer trade are rightly admired throughout the beer world. But veneration of Roger's wisdom and experience does not make Roger right all the time.

Europe, and UK, is not the USA. The removal of the tie is a small administrative issue to be dealt with. Call centres are call centres, whoeveer pays for them, and they already exist. Market upheaval is hardly a new concept to the UK pub industry and removal of the tie should be regarded simply as evolution and correction of the market following previous attempts which patently have not worked as intended - to create a better, more diverse and effectve market for consumers.

An extremely efficient beer distribution and logistics infrastructure already exists in the UK and is perfectly capable of adapting to getting beer to the whole nation from giga and nano brewing interests alike without there being a self interested middle layer creaming off the lion's share of brewers' and retailers' profits leaving the consumer to pick up a perennially inflated bar bill.

Your statement about discounts indicates that you have a very limited knowledge of the market - individual free of tie pubs DO negotiate good discounts with brewers - and always have done. Negotiating discounts is the cut and thrust of the free trade and it is disingenuous to suggest that somehow removal of the tie will open up a bizarre new free, but closed, market where substantial discounts on beer supply will not exist for indivdual licensees - licensees who currently pay tithes in excess of £200 per barrel to landlords who don't even produce the beer.

The further arguments you put forward in support of the tied system are hollow as well. Mechanisms may have to be put in place to defend micro and regional brewing interests against predatory giga brewers but SIBA already has much of this securely in hand and will just grow from strength to strength without having to expend energy negotiating with property companies sitting at the natonal distribution table. Talk to the logistcs companies mate they haven't a good word for the pubcos because they are being screwed along with everyone else.

When it comes to knockng property speculators it might behove you to look at the biggest speculators in the pub market - the pubcos you're defending so self righteously and avoid speculating about the motives of people you don't know.

The renegotiation of thousands of tenancies and freehold interests is much more likely to reduce the financial burden on individual licensees because the entities replacng the pubcos will not have their rapacious appetite expectations of return wll be based on capital outlay that far more accurately reflects the real value of property than the pumped up steroid valuations of the pubco models...

Your well prepared missive trots out the usual suggestion that the tie is somehow responsible for increased diversity of brewing and consumer choice in the UK. The realty is the reverse; it is IN SPITE of the tie that the market hase broadened - more to do with CAMRA and SIBA getting their acts together in a market that was increasingly narrowing in product diversity whle consumers were beginning to demand more local, more natural and authentic tastes against the homogeneity of international lager legions and nitrokeg bright bitters.

Use of AC Nielsen figures is meaningless without looking at profitability. Managed estates and independent retailers are making a much better GP than anyone in the leased/tenanted estate - because they are paying a LOT less for their beer.

Misprepresentation is not Mr Harrison's or anyone in Fair Pint's cup of tea. NO. So go and look at the wholesale prices of the ales available through the extensive pubco lists you mention. You'll find that the dominance of the major brewers is established at ground level - their beers are a lot cheaper on these lists than the beers many tied licensees would like to stock. They are on the list but not bought in volume because the margins cannot be achieved. All you have to do to see this is the case is find tied real ale pubs and ask the licensees about what they actually stock against what they would like to from those wonderful lists you mention.

Fact is there's not need for middlemen in this industry, particularly ones who care only about increasing returns to shareholders and servicing mind boggling debts that are greater than the value of their bricks and mortar.

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