Can politicians save Britain's pubs?

 

Thousands of publicans are struggling to make a living, with the smoking ban, high beer tax and "unfair" prices charged by pub companies being blamed. The government has promised to act, but will it do enough?

Alan Leach Alan Leach is giving up being a publican after little more than two years

For millions of people it is "the dream".

Running a pub - what could be better? Chatting to customers, being a leading figure in the community, being bought the odd drink, having fun: it certainly beats the nine-to-five, and the money's not bad, either.

That is the idealised vision of the licensed trade. For many thousands of publicans, the reality is very different.

Pubs, some of them hundreds of years old, are closing at the rate of 18 a week across the UK, according to the Campaign for Real Ale.

The smoking ban and rises in VAT and beer duty have hit profits, not to mention recent recessions and cut-price booze deals in supermarkets.

Many of those running pubs are locked into exclusivity deals, under which they are known as "tied houses". This means they can only sell beer, wine and spirits supplied by the companies owning the premises.

'Getting worse'

Often the wholesale prices are so high they squeeze any chance of making a decent living, it is argued.

A TRADE IN DECLINE?

  • 18 pubs a week closed in 2012
  • 117 million fewer pints drunk in three months to September 2012, compared with the same period in 2011
  • Tax on beer up by 42% from 2008 to 2012
  • Sources: CAMRA/British Beer & Pub Association

Alan Leach is one of the growing ranks of the disillusioned.

He has run the London Unity, in the trendy Hanover district of Brighton, for two years. Given the hilly surroundings, its residents should be thirstier than most.

But Mr Leach, who used to work as a manager for a medium-sized Brighton pub firm, has struggled since taking over his own premises.

He has attempted to diversify to encourage more custom, serving curries and Sunday roasts, but has found it hard.

His lease ends soon and he is not renewing it. The pub, which dates back to the mid-19th Century, has been put up for sale by Enterprise Inns, which owns the building's freehold.

Greg Mulholland Greg Mulholland has pushed for more regulation of pub companies

Mr Leach told the BBC News website: "It's becoming really difficult for publicans. The companies are charging too much for the beer, hitting our profit margins.

"Also, the rise in VAT and the smoking ban are putting the squeeze on us. Things are only getting worse and something has to be done about it.

"Otherwise, independent pubs like ours are going to keep closing, and communities will suffer."

The London Unity is being advertised as premises which would "suit alternative uses subject to planning", one of which could be as flats.

A Twitter campaign has been established to prevent this happening, led by Rhian Jones, a restaurateur who wants to take over the pub and keep it as a licensed premises.

She said: "It's a nice-sized pub and it's in a nice area, with an established customer base. People agree with me that it would be a pity if the London Unity closed.

"Every day I drive past signs saying pubs have closed down and there's permission to turn them into housing. It's so sad. I want to run the Unity as a good old-fashioned pub."

But Enterprise Inns denies it is pushing for the London Unity to become housing in an effort to make a quick buck.

'Scam'

A spokesman said: "As part of our ongoing business, we do from time to time identify a pub which is unable to deliver an appropriate level of sustainable income.

"After careful consideration and a review of all options, the decision has been made to offer the freehold for sale on the open market with no restrictions on future use."

Pubs have changed enormously over the past couple of decades. Most offer food. Some are far swisher. Opening hours are longer.

Queen Victoria pub in BBC's EastEnders Pubs have an established place in British life

But the biggest change came after the Conservative government of the late 1980s became concerned that large breweries owned too many pubs.

The Monopolies and Mergers Commission found they were creating a "complex monopoly", damaging the interests of publicans and customers.

The resulting "Beer Orders" stipulated that no brewery was allowed to have more than 2,000 tied houses by November 1992.

So thousands of pubs were sold, many of them bought by companies which became known as "pubcos", which, as they did not manufacture drinks themselves, were exempt from the terms of the Beer Orders.

They quickly proliferated and the largest today are Enterprise and Punch Taverns, owning more than 8,000 pubs and bars each.

Liberal Democrat MP Greg Mulholland, who chairs the All-Party Save the Pub Group, has accused pubcos of overcharging for beer and rent to help pay off their large debts.

He said: "The anti-monopolies move went wrong. The pubcos are now as big as the breweries ever were. Politicians on all sides recognise that something needs to be done. A lot of what is going on is nothing more than a scam.

"These firms are in debt and the quickest way to get rid of it is to sell off the premises. That means a load of pubs will end up as housing or supermarkets, ripping the heart out of many communities.

"It's heartbreaking. People are just trying to make a decent living and do their bit to keep places alive."

'Irresponsibly low prices'

Amid accusations that pubcos are exploiting tenants, the current government has promised to introduce a statutory code of practice to govern the relationship between them and landlords, overseen by an independent regulator.

The details of this arrangement still have to be thrashed out.

But Enterprise Inns said the tied house model was working for thousands of publicans, offering a "low cost of entry", as buying a lease was far cheaper than having to purchase the building outright.

Chief executive Ted Tuppen argues that politicians are to blame for much of the malaise, particularly the beer duty escalator, which automatically rises at 2% above the rate of inflation.

He said: "The past five years have clearly been difficult for publicans, with the smoking ban and irresponsibly low prices from supermarkets.

"In addition, the impact of the duty escalator has greatly contributed to the demise of many smaller, wet-led [beer, rather than food-oriented] pubs. During the past three years, whilst our average profit per pub has declined 12% to £67,000 per annum, the Treasury has increased its tax take by 19% to £145,000 per pub."

Action on tied houses is being promised, but it is too late for some. For others, a more fundamental rethink of taxation is just as important.

Behind the bar at the London Unity, Alan Leach is preparing to pack it all in in a few weeks' time. "It's such a pity, but I've got to make a living," he said.

 

Comments

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  • rate this
    +15

    Comment number 94.

    Out in the sticks the village pub is a free house owned by the publican who is happily extremely old fashioned. Doesn't do food, doesn't do kids & positively hates mobile phones. His very quaint idea is that adults should have a place to go for a quiet drink, meet friends & converse. It wont be closing anytime soon.

  • rate this
    +3

    Comment number 93.

    There are a number of successful bar-restaurants(former pubs) in my area, they are not PubCo or chains.
    They remain open and popular because they offer a pleasant environment, good food, reasonably priced and well kept beer.
    Although as one owner pointed out, he couldn't stay open on his beer sales, his margin is too small on each pint. He's thinking of opening his own micro-brewery.

  • rate this
    +2

    Comment number 92.

    "Centrica says profits from British Gas' residential energy supply rose 11% to £606m".....who can afford to go to a pub?

  • rate this
    +10

    Comment number 91.

    The last thing the government wants is a place where people can get together and discuss how bad things are. They might figure out how to fix it and the government and business would not like that at all.
    See Iceland - the country not the horse meat selling customer blaming sham of a business.

  • rate this
    +3

    Comment number 90.

    I wonder how much of this the pubs have brought upon themselves.

    Some years ago I virtually stopped using them as it became almost impossible to find one without a TV operating. Virtually everyone I know hates TV's in pubs and restaurants and yet virtually all pubs seem to have them now.

    A pub with no music, TV, or fruit machines where one could converse quietly would be a real asset.

  • rate this
    0

    Comment number 89.

    @brightonmummy

    Sounds like your publican could teach Mr Leach a thing or two about the trade.

    At the end of the day, it takes a whole lot more than a curry on Sunday (a really dated idea!) to make a pub great.

    And it never has been about being a great "pub"

    Even when I was a kid, the best "pubs" were the ones that were NOT traditional and attracted a very wide customer base.

  • rate this
    +11

    Comment number 88.

    At a time when I'm getting screwed on energy bills, food bills, income tax, council tax and generally getting to work tax, going to the pub is less of a priority now. Which is a shame, as I love going to the pub as well.

  • rate this
    +3

    Comment number 87.

    I'm sure MP's will fight tooth and nail to protect bars. By which I mean the one's within parliament.

  • rate this
    +22

    Comment number 86.

    How to destroy pubs along with the whole British way of life:
    Just change the population over for a new one from abroad, tax all the old ways of life to the hilt and give tax breaks and funding to the new lot.
    This will wear down the indiginous population who will eventually bite the bullet and emigrate to Australia, where they still have pubs.

  • rate this
    +9

    Comment number 85.

    Always sad to hear when a nice old boozer closes down but it's not hard to see where the problem lies when supermarkets sell dirt cheap twenty packs of carbonated cat's urine to the masses for £10. Maybe if people drank in pubs more, we'd see less public drunkeness as the landlord would have more control over how much is sold/consumed. Just a thought!

  • rate this
    +1

    Comment number 84.

    People who dont visit pubs say "I dont drink alcohol". The image of the pub as a rough place with fighting, swearing and men only is still alive and kicking in the Welsh valleys. However, many pubs are not like this

  • rate this
    -1

    Comment number 83.

    Pubs are just too expensive to bother with unless you're out for a good night out and have ready cash. Popping into the local for a swift one or two has all but disappeared as it just isn't worth the expense. Prices need to come down and then you'd see profits soar due to the increase in quantities sold.

  • rate this
    +5

    Comment number 82.

    In an age where we are ruled by a Government which has little regard for humanity can we expect any attempt to help halt the decline and disappearance of the pub? There will be a cosmetic attempt, full of spin but really, do you think Cameron or Clegg care if another local pub closes in Glasgow, Salford, Chelsea or Peckham? The future for them is to have all consumers safely, tucked up at home.

  • rate this
    +2

    Comment number 81.

    @62.Hastings

    Yes theres some truth in that. The reality is that when the pubs were owned by the brewery they would fund most of the refurbishment and increase the rent by a small amount. PubCo's expect the refurbishment to be funded by the leaseholder AND increase the rent by a substantial amount. As a result prices are pushed up to levels that most folk just can't afford.

  • rate this
    +22

    Comment number 80.

    Politicians are complicit in the decline of Britain's pubs. Whatever their merits the smoking ban and prohibitive taxes on your pint have all contributed andd pushed most drinkers into the laps of the supermarkets.

    The conspiracy theorist in me suggests this is deliberate as it is easier to monitor dissent on the internet than in the Public Bar.

  • rate this
    0

    Comment number 79.

    Greedy politicians grabbing as much tax as they can from everything we do. We don't need them anymore, the internet gives us what we need to run the country without requiring any representatives.
    I'd revolt if it resulted in less taxes and no politicians.

  • rate this
    +55

    Comment number 78.

    After living abroad for the past twenty five years, I was looking forward to spending my retirement in Merry England chatting with the locals in a quintessential English pub with a pint of good old English bitter. … What a bitter disappointment. The old local that was once our meeting place is now a derelict building. All the neighbouring public houses are now just licensed restaurants....

  • rate this
    +58

    Comment number 77.

    The beer tax escalator is a hate crime against English culture, part of Labours ethnic cleansing “we will change the culture of the country forever” and being continued by the present lot.

    Taxes should not be used as a social engineering tool and certainly not to favour one ethnic group against another.

  • rate this
    +3

    Comment number 76.

    It's disingenuous to blame to supermarkets or the government for the decline of pubs. If you don't want your pub to close get out there and use it. It's not the supermarkets selling cheap booze that are at fault it's the people buying it! If you've had a drink at home in the last week then you have personally contributed to another pub's closure, think about that before blaming someone else.

  • rate this
    +5

    Comment number 75.

    Can politicians save Britain's pubs?
    ----
    lol

    Pubs are full of working class people

    Politicians hate working class people

 

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