Tynemouth Lodge Hotel

H.M. Government, aided and abetted by major brewers and large pub-owning companies, is presiding over the obliteration of our traditional public houses and clubs.

Not content with taking the country into six military conflicts, our government has also declared open warfare on our beer houses. At a stroke, their smoking ban quickly shut countless working mens’ clubs, where there had always been a strong culture of tobacco. Labour’s election manifesto had however clearly stated that the proposed smoking ban would exempt private members’clubs and premises not selling food.

In 2008, most pubs and clubs were inflicted by no less than four price hikes in the space of 9 months : two from national breweries and two Duty increases by the Treasury, plus the promise of an annual inflation-busting Alcohol Escalator Tax. The overall 2008 increases were double that expected by publicans and at time of a falling sales. In addition, Carlsberg UK took the unprecedented step of inflicting a £5 delivery charge on small pubs and clubs.

Pubs need a lifeline in order to compete with soaring supermarket sales of cheap alcohol and competition from the heavy discounters on the high street, most notably Wetherspoons.

I would venture to suggest a checklist to help stem pub closures and to rein in the supermarkets :

1) Draught products to be charged a much lower rate of Duty than bottles/cans. This makes sense, as all draught alcohol is sold only to over-eighteens in a controlled environment.

2) To combat binge drinking and under-age consumption, minimum price of alcohol in the off-trade, of which the supermarkets are the major players, to be set at £2 for a large can of beer/cider and £5 for a bottle of wine, linked annually to inflation. This would halt crazy supermarket pricing. Better still would be for the off-sale of alcohol to be restricted to off-licences.

3) Planning protection to be put in place to slow down pub closures. Councils instructed to draw up Protected Pub Registers either by virtue of their architectural value or as a local amenity. Councils planners to be given the power to somehow encourage the creation of pubs in ‘dry’ communities, most notably the many country villages that have lost their last pub.

4) Abolition of the Alcohol Escalator Tax, introduced by the Treasury in 2008.

5) Abolition of the non-brewing pub-owning company leaseholder ‘tie’. Pub companies to be restricted to 100 outlets on a rental-only basis.

6)All managed pub estates to be restricted to 100, as the likes of Wetherspoons have got far too big and their buying power and discounting has destroyed many small traditional pubs.

7) Limitation of brewery-owned tie to 100 tenanted outlets and only to apply to brewery-produced products. Breweries forbidden to undercut their tied-tenants on tied-product net prices to other customers.

A U-turn is required on the forthcoming hike in National Insurance contributions for employers which is nothing less than a tax on much-needed employment in our pubs and clubs. Employers NIC should be reduced.

9) Licencing to be returned to the Magistrates. Council licencing has been a disaster for the licensed trade. Our Licensing Magistrates did a splendid job for over 800 years until Tony Blair stuck his oar in.

10) Non-returnable bottles to be banned, including wine bottles. Pubs and shops have gone from returning bottles in crates to returning nothing at all and having the thankless task of having to dispose of large quantities of glass, cardboard and plastic. The launch of Budweiser in the UK marked the advent of the throw-away beer bottle revolution. The last major player in the pub trade to go NRB was Britvic, whilst their arch-rival Schweppes beat them to it by a couple of years and between them they monopolise the soft drinks sector in the UK. NRBs have lead to higher prices in pubs.

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The government seems intent of taxing pubs and clubs out of business, whilst allowing the supermarket cartels to sell alcohol at knock-down prices.

In the rented sector, the big Pubco model has failed abysmally, as countless bankrupt former leaseholders can testify. Long leases with high premiums, high rents and unfair ties do not work. They rely on the Madoff Pyramid whereby tenants go bust only to be replaced by new tenants wearing rose-tinted glasses. 2009 could happily mark the beginning of the end of the Pubco, as they rely on banks lending money to new tenants.

The most successful leasehold model is the traditional three year brewery tenancy with option to roll on annually, easy exit-clause and rent paid monthly, but it is a rare animal these days. A retired Bass pub manager told me that when Bass gave their tenants the ultimatum to either sign long leases or get out, every new leaseholder that he knew personally ‘lost everything’. It is this gravely flawed model that the huge ‘Pubcos’ and some brewers are still clinging to, whilst arguably most of our best pubs are privately-owned free houses.

2009 could be a defining year for our traditional pubs and clubs. We are indeed entering unchartered waters.

Hugh Price
Tynemouth Lodge Hotel

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