Did Thatcher ruin British Brewing?

[marksa222]

I'm currently reading a book by Charlie Bamforth called Beer is proof god loves us. In the book he talks about the Beer Orders from 1989. I was only 2 when this was all about, so this was the first I've heard about this.

I gather from reading this that she thought the industry was too monopolised, and that the big 6 brewers held the bulk of the industry. They owned the pubs, leased them to landlords, and only permitted their beer to be sold on the premises. There were also loan ties, in which the breweries offered low interest loans to folk to set up pubs, but again, only permitted their beers to be sold there, and charged above the odds to the landlord making it difficult to make money. She brought in the Beer Orders thinking it would create competition, and make things better for the consumer. Amongst other things, it limited the amount of establishments owned any one brewery, and made it compulsary to offer atleast one draught beer from another brewery. This made it difficult for the brewery's to turn a profit, so instead of brewing and selling the beer, they typically did one or the other. Now all the big 6 brewery's at that time are owned by foreign corperations, and what was once a thriving British industry, churning out millions of hectolitres of beer is no longer British, pubs closed and in most of those that survived, you see Stella, Carlsberg and a host of other crap, seen next to a stack of food menus which keep the places going. Scarce are the "proper British boozers".

I am aware that the author worked for Bass in the 80's, so mightn't have the most objective opinions on this. I wondered what impact this had on a drinker at the time? Did the price of a pint come down at all? Did the landlords start making money? Was there greater choice of beers in the short term? Was a pub a better place to go before the Beer orders? and what would a pub be like today if this never happened?

I just wondered what all of you thought...

 

[Aleman]

I was working for Matthew Brown at the time and we had to get rid of 2000 pubs in the north west of England. It actually didn't achieve anything like it was intended to, i.e increase beer variety, and in fact made it much easier for the breweries to shed the pubs to 'newly formed' pub companies . . . which were 'owned' by the same directors and umbrella companies that owned the breweries. The landlords can only buy beers (including guests) from the pubcos, who can only get them from the breweries.

IMO . . .The Beer Orders only profited the directors of the big six, and the pubcos . . . it heralded the death of the British Pub, and made it even easier to restrict the variety of beer that we have available to drink today.

 

[graysalchemy]

I agree the Pubco's were owned by the breweries at the end of the day, and all the tied loan practices etc were still in place. Many people lost their life savings after being lured into running a pub.

I think a lot more has happened since to damage the pub industry mainly the smoking ban (which I do agree with) and hikes in duty and obviously the recession, and more importantly cheap booze being sold in supermarkets, this has had a devastating effect.

However there has been an explosion of micro's since the early 90's, some producing incredible beer which the Big Six could never have dreamed of brewing. So though there are less pubs around there is probably more of a variety of beer about, admittedly you do have to search for it though.

 

[marksa222]

2000 pubs? Christ, that's severe...

Did you see any changes as a customer?

 

[marksa222]

I think a lot more has happened since to damage the pub industry mainly the smoking ban (which I do agree with) and hikes in duty and obviously the recession, and more importantly cheap booze being sold in supermarkets, this has had a devastating effect.

I had thought that shafted the pubs a great deal. I'm really surprised that so few have heated outdoor areas.

I don't disagree with the smoking ban as such, but I think that there should have been some options given to landlord... Maybe a license that could be applied for where you could smoke in a pub, but it had to have a certain standard of ventilation, not be able to serve food, and have to clearly show that they are a "smoking pub".

 

[graysalchemy]

Yes I think you are right some sort of dispensation could have perhaps been applied for on the grounds that they didn't serve food and that they had ventilation systems in place which would control the smoke.

I think the majority of pubs which have closed were the ones which concentrated mainly on wet sales and not food, and in area's where there was too much competition or were not economically viable anyway because of the recession.

People just don't go out as much anymore because they can't afford it and when they do go out they want to go out for a meal as well. The vast majority of society just simply don't go to the pub in an evening anymore for a variety of reasons as mentioned above. That would have probably happened in any case with or without what Thatcher did 25 years ago.

 

[daf]

The smoking ban in pubs is often cited as being a 'European' thing, yet in the Belgian belly of the beast, smoking is still allowed in their pubs (as well as gambling).

 

[jkp]

It's not just cheap supermarket beer that is killing the pubs, home brewing is too!!!

 

[supersteve]

The smoking ban in pubs is often cited as being a 'European' thing, yet in the Belgian belly of the beast, smoking is still allowed in their pubs (as well as gambling).

Portugal is a smoking environment, you're still allowed to smoke in pubs but I think they're banning it soon.

When I was around Germany I found that some pubs you could smoke and others you couldn't, perhaps some bars just took the risk.

 

[marksa222]

I grew up in a place called Blacon in Chester (the rough area of Chester). There were 3 pubs and a legion that my Dad drank at... Theres now only one left. One closed about 12 years ago and is now flats for the elderley, and the other 2 have closed since the smoking ban. The one that's left is the only one I wouldn't go in. It's rough as a bear arse, and the people that go in there, in general are scum... I'd imagine most people in Blacon would avoid it too... The population (according to Wikipedia) is 13,495 and they have 1 pub, which the majority of folk wouldn't go anywhere near! Crazy

 

[dennisking]

I had a touring holiday in Ireland a couple of years after they bought in the smoking ban and before we did. Most of the pubs we went in were busy and most people we spoke to said the ban was for the better. I think they value their pub culture more then we do.

 

[Jeltz]

In the early 90's I was working in a business section of a high street bank which had a deal going with a business introducer who dealt primarily with pubs and small hotels, many free houses fell victim to brewery buy outs after taking out barrelage loans where the interest rate of the loan was lower the more barrels you bought. IIRC high pressure sales reps had persuaded owners that by taking a loan from the brewery to do refurbishments they would increase their turnover massively, so they would easily sell loads more beer. Alas they didn't sell anywhere near enough more beer to make the interest rates reasonable, many ended up in financial difficulty and there was a clause which meant the brewery could then buy the pub for a song..... While that may not be 100% correct, bearing in mind it was 20 years ago, I know that a load of the pubs I dealt with were acquired by breweries because of these loans which then increased the abilities of the large breweries to starve out the smaller ones.

 

[Aleman]

many free houses fell victim to brewery buy outs after taking out barrelage loans where the interest rate of the loan was lower the more barrels you bought.

Still going on today, especially by the PubCos

:hmm: :hmm: When working at MB I was present at one meeting where figures were presented showing that the interest rates on some of these barrelage loans was in excess of 5000% . . . No that was not a typo!! IIRC one case in question was a 500 quid loan to a working mans club, which turned over less than a barrel every two weeks.

Ok, the vast majority were not that high, Probably around less than 1% were above 100% interest, but the vast, vast majority were in the 25-35%, when the bank rate was around the 13-15%.

The beer orders set the business model for the PubCos and nothing has been changed for the better since then.

 

[graysalchemy]

M&B didn't help themselves either when they lost £500M on a hedging fund. My business with them came to a grinding halt after that.

 

[marksa222]

In the early 90's I was working in a business section of a high street bank which had a deal going with a business introducer who dealt primarily with pubs and small hotels, many free houses fell victim to brewery buy outs after taking out barrelage loans where the interest rate of the loan was lower the more barrels you bought. IIRC high pressure sales reps had persuaded owners that by taking a loan from the brewery to do refurbishments they would increase their turnover massively, so they would easily sell loads more beer. Alas they didn't sell anywhere near enough more beer to make the interest rates reasonable, many ended up in financial difficulty and there was a clause which meant the brewery could then buy the pub for a song..... While that may not be 100% correct, bearing in mind it was 20 years ago, I know that a load of the pubs I dealt with were acquired by breweries because of these loans which then increased the abilities of the large breweries to starve out the smaller ones.

Interesting... so this being in the early 90's, is this something that started happening after the Beer Orders, or something that was already happening and still does?

I think alot of pubs are poorly ran too. There's a pub near me now which is a bit of a dive, but they don't do themselves any favours. They never advertise to get people in. They have a pool night on tuesdays which is busy, but other than that, it's always dead. The landlord seems a bit half arsed.

 

[adomant]

I think alot of pubs are poorly ran too. There's a pub near me now which is a bit of a dive, but they don't do themselves any favours. They never advertise to get people in. They have a pool night on tuesdays which is busy, but other than that, it's always dead. The landlord seems a bit half arsed.

This is common as decent tenants who do the maths just wont take on pubs because the deal is stacked heavily in favor of the greedy pubco. This means that many pubs are run by hapless degenerates who just want a roof over their head and someone to drink with before eventually being forced out or running off with the till - the pub becomes more and more run down with lack of hygene and absence of law and order.

The 2 pubs in my village went this way, one has issues with violent and antisocial individuals and the other is a health hazard where the landlord cleans neither the pub, the lines nor himself

 

[marksa222]

The pub I mentioned is apparently owned by a bookies across the road. What is likely to be his situation? Will he be renting just the pub from them, or is it likely he's tied in to a brewery too?

Can money be made by running a pub in 2014? Or do you have to be more of a restaurant?

 

[Jeltz]

In the early 90's I was working in a business section of a high street bank which had a deal going with a business introducer who dealt primarily with pubs and small hotels, many free houses fell victim to brewery buy outs after taking out barrelage loans where the interest rate of the loan was lower the more barrels you bought. IIRC high pressure sales reps had persuaded owners that by taking a loan from the brewery to do refurbishments they would increase their turnover massively, so they would easily sell loads more beer. Alas they didn't sell anywhere near enough more beer to make the interest rates reasonable, many ended up in financial difficulty and there was a clause which meant the brewery could then buy the pub for a song..... While that may not be 100% correct, bearing in mind it was 20 years ago, I know that a load of the pubs I dealt with were acquired by breweries because of these loans which then increased the abilities of the large breweries to starve out the smaller ones.

Interesting... so this being in the early 90's, is this something that started happening after the Beer Orders, or something that was already happening and still does?

I think alot of pubs are poorly ran too. There's a pub near me now which is a bit of a dive, but they don't do themselves any favours. They never advertise to get people in. They have a pool night on tuesdays which is busy, but other than that, it's always dead. The landlord seems a bit half arsed.

I don't honestly know whether it was after beer orders but Aleman states above that its still going on.

Some people think that the running a pub is easy and you sit there being bought drinks by the regulars while staff do the work. Certainly there were quite a few lending requests that came through the office from people who had received a good redundancy pay out and looked on a pub as a kind of romantic retirement. I'm an estate agent now and get to sell the occasional pub so I can concur that some of them have been run really badly, although I also see that some of the small towns I cover can only sustain a set number of pubs trading at any one time. One town originally had 4 but for the last 15 years only 2 have been in operation, they have until recently been taking turns as to which 2 but over the course of the last 2 years the empty ones have been converted to a B&B 2 houses.