26 Pubs close every week in the UK; at least according to the last statement from CAMARA in 2013. This figure paints a gloomy future for the Great British pub and leaves one to question whether or not we’ve somehow fallen out of love with an iconic part of British life. The good news is, the very best examples of this great British institution are better than ever, and I like to think we still love our pubs.
So what’s happening here?
If we truly love our pubs, why are so many closing, and when will it end? In this post, I’d like to share some of my thoughts on this subject, and I’m also going to highlight why I think there’s still hope….
Why Are Pubs Closing?
Increasing pub closures across Britain have been blamed on countless elements. Some blame the smoking ban, some blame 24 hour drinking licences, others blame the recession and aggressive taxation. But In reality, the root causes are complex, and the reason for one pub closing is completely different to the next. Ultimately, they are businesses, and like any other business – remaining competitive is key; no matter what anyone tells you – the market will always prevail in the end.
The Changing Face of Brewing
Sound harsh? Well, maybe it is – but I’m about to reveal another harsh truth: Many of the dominant pub companies and large brewers aren’t that interested in selling beer or running pubs any more.
Yep, that’s right! and this, I believe, is the true driving force behind pub closures. Many of them run hotels, have separate restaurant chains, and in the case of pub companies – they don’t even need to sell beer! They have developed further into diversified businesses, so why would they want to run a pub?
To a diverse business like Greene King, or a pub company like Punch Taverns, it really doesn’t matter what they sell, so long as they make money. If they believe a premises can make more case as a restaurant or by selling it off to a developer, guess what – they’ll do it – no matter how viable the business.
The reality is, they aren’t running pubs; they’re running a property portfolio. They don’t need to sell beer to survive, and they can always invest the money somewhere else. It makes business sense.
How did we get here?
Cast your mind back if you will to the 1980’s, when giant companies known collectively as the ‘Big Six’ dominated the brewing industry in Britain. These were: Allied Lyons, Bass, Courage, Grand Metropolitan, Scottish & Newcastle (S & N) and Whitbread. Each brewery operated their own tied estates, where you could only buy Whitbread beer at a Whitbread pub, for example.
The government at the time viewed this as uncompetitive and bad for consumer choice. Therefore, an act known as the Beer Orders was passed, which forced brewers with large estates to effectively sell off some of their pubs. This resulted in more free houses (a pub which is not tied to any particular brewer), and in theory, more consumer choice. In the long run, all it really achieved was to unintentionally upset a stable business model, whereby each party had a shared interest: selling their primary product – beer.
Now, bring yourself back to 2014. Most of the aforementioned big six no longer exist (at least as brewers). Whitbread sold of the remaining 3000 pubs in its portfolio back in 2003, and the current scenario is one of larger regional brewers and pub companies running the majority of pubs that are dropping like flies.
Despite the depressing number of closures, I still think there is light at the end of the tunnel, which I will explain in the coming paragraphs….
Full Circle for the Great British Pub
It’s not all doom and gloom. There are some really positive signs to suggest that British pub culture, and in particular, British beer, is healthier than ever. Cask ale – a product unique to the pub – is now out performing the rest of the beer market and seeing growth unthought of 5 – 10 years ago. Here are the facts according to the 2013-14 cask ale report:
- In 2012 cask ale outperformed the total beer market by 6.8%. Cask declined marginally by 1.1%, versus a total beer market decline of 7.9%, and the long-term trend remains one of steady improvement. Cask grew in value by 3%.
- Cask ale continues to grow in awareness and interest – more pubs are stocking more cask ales on the bar. 57% of pubs now stock cask – up from 53% in 2009 – stocking an average 3.8 different brands.
- The growth in range is helped by the 184 new breweries that have opened in the last year.
- Cask’s ale’s share of total draught ale has increased to 55%. Cask continues to grow its share of all beer with a 16% share of all on-trade beer.
- The recent interest in ‘craft beer’ is helping drive awareness and appreciation of cask. Awareness of ‘craft’ is not as widespread among consumers as it is in the industry. But drinkers believe it denotes quality and is worth paying more for, and consider most cask ale to be ‘craft’.
- Larger regional breweries are increasingly launching their own ‘craft’ or ‘micro’ operations and new craft breweries are opening nationwide at the rate of three a week.
I’ve picked a few relevant points out from the report, but it’s the final bullet point that really encourages me. It would appear that our love for cask ale is swelling, and thanks in part to a global resurgence in consumer interest for small, artisan, craft food & drink – we’re seeing a real renaissance in British breweries; all of which, funnily enough, have a vested interest in selling their own beers.
New Wave Pubs
Based on what I’ve just said, it doesn’t take a genius to figure out where this is all going. As these smaller micro breweries grow and blossom into new regional brewers, they will naturally desire to own their own estate of pubs. It makes sense, in order to diversify and grow the business.
On a more local level, a fantastic small brewer close to my hometown in Bedfordshire (Banks & Taylor) now own 7 pubs – 3 of which opened in the last 4 years. The pub they operate in my hometown is now the busiest and most successful pub in the town, having been brought back from the brink of closure in 2010.
So on one hand, we might have fewer pubs in the future, but because the people running them have a fundamental interest in selling beer, they will hopefully be of better quality. But ultimately, isn’t that what we really want? High quality pubs are about great social places, run by passionate people, who love their craft; I believe the recent figures support our desire for this level of service.
So on that note – long live the British Pub, and in the words of writer Hilaire Belloc, a Frenchman (yes, I know): “When you have lost your inns, drown your empty selves, for you will have lost the last of England.”
May that day never come to fruition!