Pubpaper 789 – The State of the Pub Nation 2015

Posted: 2nd January 2015 by santobugtio in Pub Paper, Writing

New year, same problems for pubs, much as I said a year ago, nothing has really changed in the pub world on the ground over the last year.  On the plus side craft beer and smaller brewers are becoming increasingly popular, more breweries are opening, and the upstarts are growing.  What is happening countrywide is exemplified by the Huddersfield brewing scene, as a brewery outgrows its premises (as per Mallinsons in recent history and Magic Rock soon if rumours are true), it moves to a bigger building, builds a larger capacity brew plant, selling on the old premises lock stock and barrel to new brewery.  Hand Drawn Monkey Brewery took over the Mallinsons premises and are now enjoying national success on the craft beer scene adding to their well established beer shop / bar in Huddersfield and online beer shop operations.

On the negative side the pub companies were still shafting their tenants, trying to avoid legislation to control their behaviour and people continued to lose their homes and life savings.  As importantly communities lost their local pub to other commercial uses without any say via the use of planning loopholes which allows such conversions.  However 2015 has the opportunity to really change the pub trade when the amendments to the Small Business, Enterprise and Employment Bill forcing large pub companies to offer a market only rent as well as other fairer terms to tenants, as voted through in November last year, come into force when they clear the House of Lords in the first part of 2015.  However this will take at least 18 months to bed into the system, so although we will see some change in the next year, I’d reserve judgement until the end of 2016 to say if the law is working or that we looking at another Beer Orders 1989 situation.

The next thing that need changing in the pub industry is the closing of the aforementioned planning loopholes so pubs can stay pubs if commercially feasible and not be leased out by greedy pub companies to the highest retail based bidder.  You can fully understand why their commercial departments want to lease to a big company with little chance of default on payments. Payments with high chance of being worth more than they could hope for via wet and dry rent from a struggling pub tenant, guaranteed over a long term contract.  When renegotiating the restructure of their debt (as they seem to every 4-5 years), it looks far better that they have 200 premises with guaranteed £50,000 rent per year for the next 20 years than 200 pubs where the tenant might leave at any time due to money issues, stress or simply having enough of being ripped off.

If we can guarantee the security of the pub tenant via fair rent and beer prices, allowing them to have a normal life working reasonable hours and giving them some money to enjoy life a bit whilst removing the worry of their pub being turned into a Tesco in the near future, then our whole pub industry would be far healthier and would benefit not just those directly affected, but the pub scene as a whole.   The reason for this is that some people get out of the habit of going to the pub when it closes, not just that pub, but any pub.  They get into the habit of drinking at home, and the cheap prices of beer from the Tesco (which has probably replaced the local pub) ingrains this behaviour.

The continued trading of a local pub which doesn’t have to charge over £3.00 a pint for a half decent beer to break even means that the pub going habit continues and although say 75% of the persons trade will go to the same pub, there is 25% to be spread around other pubs in the area.  Scale this out on grander scale and you create a mesh of pub spending which will benefits the entire area.  A higher density of pubs in an area means people are more likely to spend a Saturday night or Sunday afternoon visiting a few pubs in the area finishing back at their local.  Just look at Brighouse or Sowerby Bridge to see what a high density of pubs does for weekend and evening leisure spending in the town and the flows of customers from pub to pub.

Think of it as a spiders web and we drinkers are the flies.   One pub won’t catch us easily, there is simply no web to trap us.   But if you have two or three pubs in an area, the web is formed and we get caught in the web for longer.  Once you have a town with five or ten well respected pubs and bars, people can’t help but be trapped by the mesh of the web and keep coming back.  But swipe a hand through a significant part of the web and it just collapses completely.  Discretionary spending is a fragile thing just like the web of a spider.