A Marginal Existance

I was talking to a local pub landlord recently and during the conversation, was disappointed, but not surprised, how in winter particularly, when it is pissing down as it often has been in recent months, just how many times he had to make recourse to his reserves to pay the bills as the pub was so empty.  Now you might liken this a bit like when you pay your monthly ransom to the power companies, using the excess built up in the so called warm months, to offset the cost in the chilly winter months, which if you are like me, you'll consider that is most of them. But you'd be wrong. it isn't really like that. Let's have a look at it. 

It’s Friday night, the local is packed. The place is going like a fair and the atmosphere is just what you want on a good night out. To the casual observer, it looks like a gold mine. You’d be forgiven for thinking the landlord is currently scouting for a second home in Marbella. But talk to anyone behind the pumps, and you’ll find a much grimmer reality. The "busy pub" is becoming a bit of a mathematical mirage. Here is the sobering truth about why that bustling atmosphere isn’t making the boss a fortune.

Input Costs

While the price of a pint has crept up toward the £6 or £7 mark (and beyond in that there London), the landlord isn’t seeing the benefit of that extra few quid. He or she has to think about the fixed costs of the operation. That is the things that can't be avoided, or discarded: 

Energy: It’s not just the lights. Cellar cooling, glass-washers, heating, kitchen appliances are all energy-hungry beasts. For many, standing charges and unit rates have doubled or tripled since 2022. And nobody wants a cold pub, though you like me, will have noticed plenty of times when the pub isn't as warm as it should be. If your pub is cold, it is likely that cost which makes it so.

The Beer: Barley, hops, wages and more suffer from inflation too. Brewers have had to pass on their own rising costs, meaning the "wet rent" (the price the pub pays for the cask or keg of beer has continually increased to its present high level..  

The Chancellor's Cut: This is where things really bite. The UK has some of the highest Beer Duty rates in Europe. When you buy a pint, you’re effectively paying a stealth tax. and unlike the supermarket where you buy your cans of lager, pubs have to pay 20% VAT on every pint, snack and plate of chips sold. 

Business Rates: The system is archaic. Pubs are often taxed based on their "fair maintainable trade" (basically, how much they could make), which penalises successful, busy locals.  It also makes the somewhat unrealistic assumption of how much of turnover is profit.

Dry Rent: What you pay to occupy the building. Typically, there will be an initial deposit then a monthly rent, agreed for (say) a three to five year term.

The Minimum Wage & Staffing Costs: Nobody should grudge hardworking bar staff a decent wage, but it all costs. A busy pub needs bodies. With the National Living Wage rightly increasing to support workers, the wage bill for a fully-staffed shift has ballooned and of course, that doesn't just apply to busy Fridays. The irony is that to serve the crowd that makes the pub feel alive, you have to hire more staff, which often eats the very profit those customers are generating.

Back to my landlord friend. Everything costs more he tells me and people need to be enticed out of their homes to come to the pub. A musician for example, will often attract customers and fill the pub, but the £300/£400 bill for that needs a hell of lot more drinks to be sold, just to break even. It is done though to make the pub more attractive,  and in the hope the customer will like it and come again at other times, but ......

Supermarkets- the elephant in the room: One of Tim Martin of Wetherspoon's pet hates, this is where the "pre-drink" or "instead of" culture is the enemy of margin. In the 90s, the gap between a supermarket beer and a pub pint was a manageable jump. Being very old, I can remember when that gap was tiny and hardly game changing. Today, it’s a veritable chasm.   If a customer stays for two pints instead of four, either because they can't afford more, or because they drank a cheap few cans at home first (or intend to after) to offset high pub prices, the pub still has to pay the same fixed costs for the heating, the live band and everything else.  

And then there is food. Pubs often rely heavily on food sales to survive, but food carries additional and  higher overheads  - chefs, wastage, supply chains with their own struggles - and of course VAT. No wonder so many have decided that game isn't worth the candle, but maybe, looking on the bright side, the pub snack may make a comeback as seems to be happening in some cases? Filled rolls and Scotch eggs anyone?

Margins in the hospitality industry used to hover around 10% to 15%. Now, many independent publicans are operating on a knife-edge of 3% to 5%. One broken glass-washer or gas boiler, or a quiet rainy midweek is enough to wipe out the profit from a successful weekend.  While brewery owned pubs and national chains have different issues, it all is very costly for them too. Debt is everywhere in the pub trade since the Beer Orders.

These are just some of the issues which vary from pub to pub depending on size, location, local authority, type (managed/ leased/free or whatever) and so much more, but fixed costs are a killer. 

The type of beer sold has different costs and margins, so that affects things too. It all boils down to margins being squeezed and viability on a knife edge. If you can just about come down on the right side, then you are surviving at least.

So, next time you see your local packed to the rafters, don't begrudge them that extra 40p+ on a pint. Most of them aren't getting rich; they’re just trying to keep the lights on, preserve tradition and hopefully make a few bob so we all have somewhere to go when want a bit of conviviality rather than drinking alone in the house.

 

This is just a brief dip into what is a very complex area.  Price of a pint? You tell me. It varies so much, as there are so many factors to take into account.

What is also for sure is that the drinker has to get value out of their experience too and that isn't helped by pricing them into the supermarket.  The government has to make its mind up here. Do they want to preside over more and more closures? Chances are they will continue to screw hospitality and just hope for the best, so probably.

Apologies too for the Ai photo use, but I felt the Mr Macawber definition needed suitable illustration. 

 

Another Trade Show

Like buses, they all come more or less at once. Hard on the heels of Northern Bar was the Society of Independent Brewers and Associates (SIBA) big annual thrash held in the Liverpool Exhibition Centre.

SIBA BeerX 26 is a massive trade show with a beer competition, many bars featuring independent brewers from the whole country, exhibitors from the trade, industry awards, a series of talks on various beery subjects, debates, seminars and much more.  SIBA describe it as "The UK's largest exhibition of brewing products and services, and a hub for brewing, education and business advice. A must-attend for the brewing industry." ​

The setting on the Mersey waterfront, in a modern purpose built exhibition centre is hard to beat, and the space is big enough to be comfortable in.  It is in a perfect spot when the sun shine, and on what was a lovely sunny spring day the views across the shimmering river to the 'Birkenhead Navy', made everything  pleasant and worth the early start.

I wasn’t there just to drink beer - I was judging in the beer competition. I’ve judged for SIBA before and, despite filling in a form about experience and preferences, the final allocations always feel a bit like a lottery. Actually, I'm not really sure the information you give beforehand is used to its full. Eager to see what we’d been assigned, my fellow judges and I registered: I and one friend had two panels each, while the other friend, to his surprise, had three plus the final. With that settled, we had an hour to wander, catch up with people and take stock. The bar setup was excellent - keg and cask beers were clearly displayed and attractively arranged. As a former Beer Festival Organiser, my critical eye couldn't fault it all. That done, we bought beer vouchers for later and reported for duty.

I judged American Keg Pale Ales which were, frankly, a bit of a mixed bag. We reported one "ringer" a New Zealand hopped wheat beer - dunno what happened to that. My second panel was porters and stouts including nitro. Way better, but then again it is easier to hide faults in a dark beer - and we caught out a couple.  Some crackers though which was a bonus.

We finished by drinking a lot of beer with people we knew. That's the beauty of these gigs, you always meet up with friends and acquaintances. It was good to see Ed Wray - the Beerfather - and I had a quick chat with Laura Hadland.  My mate Matt Curtis was there and lots from the North West beer community from brewers, to judges and all sorts in between.

The value of it all?  Well, it was a lot of fun, and I'm happy to get as much fun in as possible before I peg it. At my age, you don't forget that time flies and time spent with good beer and good people is time spent well.

The Birkenhead Navy, in case you wondered is the various Navy and Fleet Auxiliary ships in the  Cammell Laird shipyard for various renovations and repair. 

The Higsons pump clip was for sentimental purpose only. It tasted nothing like my beloved original. 

I found out today that overall champion cask beer was Almasty Brewery from Newcastle with "Believe" a New England style IPA.  Champion Keg was "Don't Make Me Run", an imperial stout from Lakes Brew in Kendal. Sadly, I don't think that was on my judging panel.

No prizes for guessing the two other guys in the photo, but do tell anyway. 

 

Contrasting Beery Things

It scarcely seems like a year since I last attended the Northern Bar Show, which I reported on here. Reflecting on that, one thing for sure is at my age, that while often the hours drag, the years fly by all too quickly.  I went with my old pal Graham. Manchester Central exhibition centre, the venue of this gig is where we organised the (very successful) festivals. Happy days and a great talking point when chatting to exhibitors.

This year we noted that more of the hall was being used and that it all seemed a lot more spacious which, given the hordes that attend, is a very good thing indeed.  Last year I adopted a theme, but this time we just wandered aimlessly, chatting to this one and that one.  There were a few highlights of course. You meet Manchester beery types and publicans in this very different environment and get a chance to talk to others from further afield.  I was pleased to see JW Lees had their usual bar, though I didn't know a single person behind it. Hmm.  

I also really enjoyed chatting to the guys at the Harviestoun Stand - hello Andrew - as I know the area they are based in pretty well. The beer of the day was sampled there. Ochil Lager is 4% and very decent, which isn't so easy to do at that strength. I recommend it. The Northern Ireland stand was another highlight and not just for the free Tayto crisps. Great company there and something really needs to be done about the licensing situation in NI, which seems like a right racket and is obviously holding back the development of the beer scene there.

We were given copious free samples of this and that, gifted the odd can and bottle of beer and offered snacks various, most of which we declined though I did take a mini chocolate egg as suitable sustenance for later. Who was that from? Dunno. Everyone was very pleasant, it was all well-organised and enjoyable day, rounded off by unnecessary beers in Cafe Beermoth, where, admittedly a touch worse for wear, we bumped into beer writer and all round good egg, Matt Curtis. This rounded the day off nicely, with a discussion about his new book and a reminder of the launch party, which was already in my diary. Slightly laden down with swag, an Uber home was definitely a sound investment.

By contrast, last night I presented the CAMRA Rochdale, Oldham and Bury Pub of the Year to the Fox and Pine in Oldham. Few things in CAMRA business give me more pleasure than presenting awards to publicans.  The Fox is a worthy winner given the very stiff competition we are fortunate to have in our Branch area. One thing to note is that despite CAMRA's so-called decline, everyone who wins an award is rightly proud as punch. It matters to them. It is recognition of effort. Why not call in to the Fox and check it out for yourself?

On a pissing wet night, E came along on the strict understanding that we left on the last 415 at 21.59.  I'm proud and humble to say, despite the very agreeable company and top class beer, I had my raincoat on at the required time. Brownie points are always useful, though rarely acquired in my case.

I also spent time editing More Beer Magazine in a bit of a hurry, as I found the proof in my spam box, along with many others which aren't spam either. No idea how that has happened, but I bet I was at fault somehow.

Tonight I usually go to the Rose of Lancaster, but as they are all preoccupied with Cheltenham Races there, I think maybe the Ring O' Bells. Lees beers either way!