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
    +3

    Comment number 574.

    Drink in a pub? Who would do that and why?

    I'd sooner drink at home.

    I don't have to wait ages to get served, the beer is reasonably priced, there's always somewhere to sit, I'm not deafened by music I don't like, and I won't get glassed by some prat who has clearly had too much.

    Most of them have brought it on themselves by being too greedy.

  • Comment number 573.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +7

    Comment number 572.

    544.
    Iain


    "There are 3 pubs in my village.One of them has developed in the last three years into a place to take the family for a nice bite to eat in pleasant surrounding offering good food."

    Thats not a pub, its a licensed cafe

  • rate this
    +16

    Comment number 571.

    There is one main reason that pubs close. It's the same reason that shops close. Who gets the trade instead? With alcohol, it's the supermarkets. With most High Street shops, it's online (but also supermarkets). We use them because we don't value the service, and care more about the cost than supporting our local shops/pubs.

    The answer is simple and it's in our hands.

  • rate this
    +11

    Comment number 570.

    561. billyhano

    To those who do not go to pubs since the smoking ban, I have the greatest of sympathy.
    I can imagine how devastating it would be to myself, if I had an addiction that prevented me from socialising.
    --
    We do socialise over dinner/coffee/cinema.

    You wanted non-smoking pubs SO BADLY THAT you didn't want to make it optional.
    There.
    Go and enjoy your empty pubs before they close.

  • rate this
    +3

    Comment number 569.

    i used to like a good pub. Problem is many are old fashioned , smelly and dirty in my town. While the argument (As is usual) is to make alcohol more expensive for those buying in shops, it wont address the fact that times have changed. People prefer to stay home or visit friends. Pubs don't offer the intimacy people want not and too many offer very little. They aren't guaranteed a living.

  • rate this
    -2

    Comment number 568.

    549 Tio Terry
    The Tories have been in power for nearly 3 years, have kept the beer tax escalator in place and recently stated they were planning to keep it. So it's not unreasonable to call it a Tory tax.

  • rate this
    +1

    Comment number 567.

    I used to try to help our landlord out. Id go in often but then i ran out of money but instead of stopping going in i took out a loan and continued . Then people started calling me names like alchoholic and one lung. Thats the thanks you get. I suppose i better leave as he needs my help again

  • rate this
    +2

    Comment number 566.

    552.adgwytc
    You assume i have small children, i don't. You assume i think it normal to take children into an environment where there are drunk people, i don't!! My point was about the business acumen of the ownere / landlord and incidentally, since the removal of the drunk clientelle attractions, pool table, dartboard, bandits and jukebox i've never seen a drunk in there.

  • rate this
    +2

    Comment number 565.

    Cofi in Exile
    Absolute rubbish, myself and other smokers I know who used to enjoy an afterwork pint, & game of darts or pool, no longer bother. We could cope with the price, but being forced to go outside to smoke was beyond the joke, & as I said before, we were hardly caught in the stampede of non smokers coming into the pubs!!!

  • rate this
    0

    Comment number 564.

    There were two kinds of pub. The 'local' and the 'nice country pub with food'. The local has just about dried up. The pub with food, nearly so. They will reduce in numbers by at least half. Maybe 1 or 2 per community area. From the government viewpoint, the tax take will also halve.

  • rate this
    -2

    Comment number 563.

    @553 "Signs to inform the public that the pub was a 'Smoking Pub' gives them a choice to either enter or stay away."

    Again that would alienate customers, when they can just have a smoking area and get a broader array of paying customers. Businesses can't afford to favor one over the other. It has to try to please customers that want to smoke 'and' those that don't want passive smoke best they can

  • rate this
    +3

    Comment number 562.

    For many decades churches were closing at the rate that pubs are now closing.Firstly, pubs and chuches were once the centre of communities but communities are broken.
    Secondly, these are days of austerity and low alcohol prices in supermarkets.
    Successful churches have had to think of different ways to be church. Suggest pubs find different ways of being pub.

  • rate this
    -3

    Comment number 561.

    To those who do not go to pubs since the smoking ban, I have the greatest of sympathy.
    I can imagine how devastating it would be to myself, if I had an addiction that prevented me from socialising.

  • rate this
    +5

    Comment number 560.

    Re: The smoking ban in pubs.
    Again, back in 2001 I don't remember be given a chance to vote on something that would have such a big change to the way of life here. Yes; smoking is bad for your health but dictation is bad for democracy.

  • rate this
    +11

    Comment number 559.

    When £10 can't even buy three pints in many pubs it's little wonder no one can afford to go.

    Overtaxed, overpriced!!

  • rate this
    -3

    Comment number 558.

    Surely pubs are no different to any business. If you run a good one, and there is demand for it then people will visit and it will make a profit. If there is no demand for one or it is badly run, it wont, and it will go bust. I think the current decline is more reflective of social acceptance of drinking and the fact that many people simply don't want to go out and drink as much as they used too.

  • rate this
    +1

    Comment number 557.

    We need to start a campaign I propose we call it Save Our Taverns (SOT) anyone fancy joining me in this endeavour and becoming a SOT drinker?

  • rate this
    +2

    Comment number 556.

    Nothing to do with the smoking ban IMO. I use both of the pubs in our village and it's the same customers as before - including the smokers, who are provided with covered, heated areas to indulge.

    Instead, look to the incredible cash demanded for obtaining a lease and the outrageous rents, combined with having to buy from the brewery at prices dictated by them.

    That's why pubs are closing.

  • rate this
    +4

    Comment number 555.

    Social Engineering, prohibition by rout. Our(?) government continues to destroy anything that brings people together in the real world. I see nothing good in this or the previous governments. They are destroying our culture, identity & even our currency. An open policy on immigration which will make the White British a minority in our own country long before the predicted 2066! VAT@20% insane!

 

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