Thursday, December 17, 2009
Not so much about the story above but about the thread below, it's OBVIOUS that all Pub Revolution full members are tied tenants. And the basic point about the wholesale price of tied beer, Mark, is that if you're doing 700 barrels a year at 45% GP you'll be making a hefty wedge of cash and not be complaining but your margin is utterly crap because your supplier is charging scandalously too much for doing absolutely nothing and benefiting vicariously on the back of your endeavour with margins that well exceed yours. If you're doing 200 barrels a year - the average pub volume - the likelihood is you're technically impoverished and surviving only through receiving Working Family Tax Credits; anything less than that your business is altogether not viable. Buy the beer at the open market price, the dynamics shift altogether, profit is retained at the foundations of the industry, investment is made in the national pub estate and better amenity is made available all round.