On Trade Suffers Again

The news that 88 million less pints were drunk in pubs and bars in 2017 can hardly come as a surprise.  This equates to a 2.4% year on year fall and hammers home yet again the message that pubs are still in trouble and that there is still a significant switch to drinking beer at home, as overall, beer sales rose slightly.  There isn't a bright looking horizon either, with a business rates bombshell likely to have a further effect on on trade prices in 2018.

The great divide in beer continues, not because of increased off sales at the craft small pack end of things - that's a different thing - but at the volume end. For those with jobs and "just about managing", choosing to drink cheap beer at home as pub prices increase on those already wage squeezed, is rapidly becoming a no brainer.

The beer market is changing considerably. The so called community pub is being threatened as never before as its core customers vote with their feet and drink their beer at home. Those of us who enjoy their beer in the pub had better watch out. It is an endangered species and while really good pubs that can attract those with plenty disposable income, will no doubt survive and while the craft bubble will continue to provide an alternative to the well heeled in mostly urban centres,  the overall picture is somewhat depressing. For those not quite at the bottom of the pile, who used to enjoy a pint in their local but can no longer afford to do so, the pub may fade from not only their daily routine, but their weekly and even monthly one.

Fragmentation, high prices, high duty and high business rates as well as different social habits, don't paint a rosy picture. Changes have been both evolutionary and enforced by circumstances. The effect is broadly similar however.

And there is more to come.

Britain has the fourth dearest alcohol prices in Europe. So much for minimum pricing.

The day of  the handy local pub is disappearing. You'll also have to travel further to the pub for that odd pint. Another disincentive.

Mixed News from Germany

German beer sales plummeted to a new record low in the first six months of this year according to the Federal Statistics Office. Sales over the corresponding period last year were down 4.5% - a worrying 230 million litres. Poor weather, supermarket prices and the smoking restrictions are cited as possible reasons; where have we heard this before?

One silver lining is that sales of beer-mix drinks (and the Germans have some disgusting mixtures) fell even further, by 7.4%.

The Germans like to mix their beers with cola, lemonade and even fruit juices. Alt bier with cola is called "diesel". I haven't tried it.

Sobering Statistics

From the Scotsman:

1.6 million

fewer pints of beer a day sold in pubs, bars and restaurants in April to June this year, compared with the same period last year

7 million
fewer pints a day now sold in pubs from the height of the market in 1979

10.6 per cent
fall in beer sales in British pubs between April and June this year, compared with the same period last year

£88 million
less in beer duty and VAT collected by the Treasury in April to June this year, compared with the same period last year

27
pubs closed each week in the UK over the past year

57,000
pubs estimated in Britain in 2008

69,000
pubs in Britain in 1980

350
pubs closed in Scotland in the past two years

78 per cent
fall in profits of major brewers in the UK between 2004-6

The on trade is in trouble and while it can be persuasively argued that by and large the pubs being closed are at the lower end of the market and would have been shaken out by any downturn in social habit and economic fortune, there is a worrying underlying trend for those of us who like to drink beer in pubs.

The 7 million pints less being drunk daily is an astonishing figure. It equates to nearly 25,000 UK barrels a day or the loss of the production of a brewery the size of Highgate, McMullens, or Bathams every day!