Going Dutch

The news that Heineken is buying most of the tied pub estate of Punch Taverns has been written about on one hand as a great and confident nod to the future of the British pub and by by others as the return of the pre Beer Orders beer world.  Is either position really the case?

Ẁith the addition of 1900 pubs to its existing 1100 or so, soon Heineken will control over 3000 pubs and will apply, I assume, their rules to their new tenants. This will allow the tenants (in theory) access to a maximum of 176 cask beers, mainly chosen from big brewers.  On the contrary, one of the good things about Punch in their latter days was the ability of its tenants to buy from far and wide, mainly through SIBA, though of course, Punch did apply their mark-up to the end product invoice. This allowed access to hundreds of beers. Jeff Bell describes the process here for those interested in it.  As far as I know, Star Inns and Bars (Heineken's pub arm), allow no such flexibility. Indeed their tenants in my area tell me that far from being allowed access to the whole Heineken list, there is usually a much smaller list from which they must choose and requests for access to the bigger list, imperfect though it is,  are stonewalled by area managers.  One must assume that is done on grounds of profit, by Heineken purchasing and selling large volumes of a small amount of brands, led of course by their wholly owned offshoot, Caledonian Brewery.  It puts Star Inns and Bars tenants at a considerable disadvantage over rivals who are not so hidebound.

Now the Beer Orders have been long since revoked and funnily enough, Punch were in the process of really cleaning their act up - a process presumably approved of by Heineken, as they have stumped up £305 million to take control - but will this massive tie really be good for choice? Heineken are clearly aware of this concern and issued a statement to the London Evening Standard. Reading this rather bland and wishy washy set of "assurances" you may not exactly be reassured.  Lawson Mountstevens, head of Heineken’s Star Pubs & Bars UK estate, told the Standard: “Our plan is to keep great London pubs as high-quality venues."  He added: "Around 15% of the brands we sell in each of our existing pubs are not owned by us, so we use regional cask-ale brewers such as Fuller’s. I want to reassure sceptics that, subject to the deal for us buying the Punch pubs completing, we will aim to keep up this policy of selling a number of non-Heineken beers.”. 

Convinced? Me neither. A huge loss of choice will do nothing for the dog eat dog situation of over supply and may well see off quite a few brewers as markets close to them. In this respect we are indeed heading back to the closed markets pre Beer Orders. The Good Old Days?  For Heineken, maybe.

Heineken's boast of maintaining choice looks much less attractive of you look at it as Heineken selling 85% of brands they own in pubs.

To save you the arithmetic Heineken are paying an average of £160,000 a pub. Their partner,  Patron Capital will retain and run the 'Punch B' pubs of which there are 1,329 as well as TopCo. 

Two Classics and One Less So

In early Autumn sunshine, Amsterdam is quite delightful. From our hotel near the rather grand Concertgebouw it was a nice stroll across the park to the Van Gogh museum (unmissable) and the Rijksmuseum (less so).  But man does not live by culture alone and after a visit to either icon of enlightenment, a spot of liquid refreshment is required.  Now of course you could repair to any number of local outlets for the ubiquitous Heineken, but if you want to drink in pubs of the company that put the lack into lustre, that's fine, but there are other options.

In what might roughly be called the centre of town, not far off Dam, is one of the most famous of boozers, In De Wildeman. The pubs own website describes it as "one of the best places in Amsterdam to taste new beers or simply drink your personal favourite".  That's exactly so.  I took our small party of six in after their visit to the hidden Catholic Church, a spot of culture I opted out of, preferring to sit in the sunshine at the canalside, watching the world go by.  This is an old fashioned boozer with multi rooms, a soothing atmosphere and a warm welcome from the barmaid, a Mrs Doyle look and sound-alike who was pleasantly helpful and gratifyingly, Irish.  My pals and E all drank Jever. OK it isn't Dutch, but it is good. I too avoided Dutch beer, not through any bias, but because I fancied some Weihenstephaner.  Cheesy and (raw) sausagey snacks provided the sustenance to see us through another couple of rounds.  It is that kind of place.

Two of our party left for different things and four of us decided, on my prompting admittedly, to visit another icon, Arendsnest. We asked a friendly local for directions. "Two canals over and on the left." Oddly, one canal over and the noise and bustle of the city receded. Two canals over and it had gone, giving way to a sedate residential area which was a pleasure to stroll in. The bar itself is in a handsome terrace and is beautifully appointed. It serves only Dutch beers. The greeting here couldn't have been better and the smiling barmaid insisted in giving us tasters and happily talked us through the draft beers. We stayed for two, or was it three?  Time ticked by gently and both the beer and welcome made you glad to be there.

A day later, E and I visited Beer Temple, an American beer bar on Voorburgwal.  This is described on t'internet variously as "cosy" or "relaxed". We both thought it a bit of a dump in need of a clean and although the beer was fine, it reminded us that there is more to a drinking establishment than a good beer list.

When did Heineken become so undrinkable? It used to be reasonbaly quaffable, but now seems sweet and turgid.

Beer in Amsterdam isn't cheap, but pick the right places and you still get value. Pick the normal places and you get Heineken at €5.80 a half litre. Top tip. If in a Heineken joint, buy Duvel.

Not So Smooth Operator

In a quite astonishing spat, JD Wetherspoon has with immediate effect, ended its contract with Heineken to supply a number of drinks brands including Heineken and Foster's Lagers, Strongbow Cider and that old JDW favourite, John Smith's Smooth.

They have been trading partners for 35 years, so how has this come to pass?  Well since JDW ruffled feathers in Ireland by daring to open a pub in Dublin, things have been a bit tetchy over there. First of all Diageo, owners of Guinness, were booted out (or rather were never booted in) as JDW refused to pay what they saw as an inflated price for the black stuff. JDW turned to Murphy's Stout made by Heineken and things sailed along nicely, though under the surface, all was not well it seems.  Wetherspoon now intend to open a second pub in Ireland and looked to Heineken to supply it, but there has been a spectacular disagreement.  According to the BBC and other identical statements elsewhere, Heineken wanted to make the CEO of JDW, John Hutson, personally liable in case of a default on any debt, though why they should do so is a bit of a mystery given JDW's £80 million annual profit.  Wetherspoon has basically said and I paraphrase; "Well, stuff you then - take your scabby products out of our nice pubs!"

Now that would be bad enough if this sanction just applied to Ireland, but JDW has effectively said "Get Lost" to Heineken for all of their 900 plus pubs in the UK, blowing a £60 million account out of the water. Someone has misjudged the moment. Or maybe more than one someone.  In a somewhat pained manner Heineken UK said "

"Heineken UK has had a long standing and successful relationship with JDW in the UK market over a 35-year period, and it is unfortunate that commercial issues in Ireland between Heineken Ireland and JD Wetherspoon have led to the current situation. We are seeking a resolution as soon as possible."

Well I bet they are. To lose one account is unfortunate, but to lose 923 all at once is certainly careless, especially when you have been shafted by your Irish compadres. There is of course more to this than meets the eye with JDW undercutting the price of a pint of Heineken by up to €2 and the evil eye of Irish publicans being cast upon Heineken for that reason. Given that JDW has plans for up to 30 pubs in the Republic, this may well be somewhat of a test case, though I doubt that Heineken foresaw the eventual outcome and I very much doubt that this is the end of the matter. It is hard to see how Heineken can do other than to back down as JDW can undoubtedly get beer elsewhere.  There will be further repercussions too likely as not, but it is nearer home to which we must in compassion turn. Nobody in this sordid tale seems to give a monkeys chuff for those most affected, the Nine in the Morning Club.  What are they going to do without John Smith's Smooth? Ruddles just won't cut it.

Sadly it is always the least fortunate in our society that suffers when the big boys fall out.

On a more sombre note, this does show that when big business falls out, who knows where it all might end? Heineken is the world's biggest family owned brewer.