Cask Ale is Too Cheap/Expensive

Illustration: Pound Sign/Pint Glass.

Cask ale is both too cheap and too expensive. Or, rather, both of the following statements are true:

  1. It is a prob­lem for brew­ers that cask beer – cul­tur­al­ly impor­tant and rel­a­tive­ly more dif­fi­cult to brew, dis­trib­ute and serve at its best – is expect­ed to be cheap­er than oth­er forms of beer on sale in the UK.
  2. Con­sumers can­not be expect­ed to pay more for cask beer.

Let’s look at item No. 1 first.

We have tes­ti­mo­ny from mul­ti­ple brew­ers that cask ale not only offers only slim prof­it mar­gins but also comes with addi­tion­al chal­lenges not found with keg or small-pack prod­ucts. Take this from North­ern Monk, for exam­ple:

[Logis­ti­cal­ly cask is] a mas­sive headache for us… It makes no sense for us to pack­age in a for­mat that we’re not real­ly set up for, has a low­er mar­ket val­ue than oth­er pack­aged for­mats and our beer isn’t par­tic­u­lar­ly suit­ed to.

Or, if you don’t much val­ue the views of ‘upstarts’, here’s Roger Ryman of St Austell: “Over­all prof­it on cask beer is wafer thin in free trade and nation­al dis­tri­b­u­tion where we com­pete against the many hun­dreds of brew­eries that oper­ate in this mar­ket”.

So, com­pe­ti­tion is an issue but we also find our­selves sus­pect­ing that if it weren’t for cer­tain odd­i­ties in the mar­ket – the grav­i­ta­tion­al pull of the Cam­paign for Real Ale, a his­tor­i­cal expec­ta­tion that cask will be cheap­er than keg – cask would be a pre­mi­um prod­uct cost­ing more than most keg beers. That is some­times expressed, for the sake of brevi­ty, espe­cial­ly on Twit­ter, as “Cask is too cheap”, or “Cask ought to be more expen­sive”, or “I’d be will­ing to pay more”.

There’s a cheap rhetor­i­cal trick that often gets played at this point: “Oh, so you think £3 a pint is too cheap? Alright for you, mon­ey­bags.”; “So what you’re say­ing is that want to exclude poor peo­ple from cask alto­geth­er then? You elit­ist bas­tard.”; “You want to pay more? Are you quite mad?”

(Also a cheap trick: para­phras­ing those rather than quot­ing spe­cif­ic exam­ples, but we don’t want to get into beef with any­one in par­tic­u­lar.)

The prob­lem is, those lat­ter voic­es also have a point, which brings us to item 2.

Nobody Has Any Money

Jour­nal­ist Will Hawkes put this well on Twit­ter last week (and, indeed, prompt­ed this entire post):

"People can't pay more. Wages have been in decline for years and will be for years. Brewers need to accept this."

As a con­sumer it can get pret­ty exhaust­ing: sup­port pubs, sup­port small brew­eries, boy­cott super­mar­kets, sup­port record shops, sup­port book­shops, sup­port strug­gling restau­rants, sup­port your local butch­er, bak­er, arti­sanal can­dle­mak­er. Buy local, buy Fair Trade, buy British. Oh, and pay into a pen­sion, and save for a rainy day, and put a roof over your head in a prop­er­ty mar­ket gone insane, and also we’d like you to go onto a con­tract which means we can’t guar­an­tee your income from one month to the next. Oh, and it’s 30p to use the toi­let now, by the way, because there’s no mag­ic mon­ey tree and so on and so forth.

If some­how the price of cask ale rose by, say, 20p a pint across the board, it wouldn’t unlock some secret pot of mon­ey that con­sumers are sit­ting on. Indeed, it would prob­a­bly push a sig­nif­i­cant num­ber over the edge, reduc­ing the num­ber of trips they make to the pub.

Well, drink less but bet­ter,” peo­ple some­times say, but, hon­est­ly, if we drank much less we might as well give up and join the Band of Hope, even though going to the pub is our biggest leisure expen­di­ture each month. (If you haven’t already done so try tot­ting up how much you spend in the pub each month – the num­bers are a bit scary.)

To us, and oth­ers like us, and espe­cial­ly those worse off than us, it doesn’t feel as if cask ale is cheap. The fact that some real­ly cheap beer is avail­able, at Wether­spoon or Sam Smith pubs, doesn’t ‘deval­ue cask’ – it’s a life­line, part of the bal­anc­ing act that means we can occa­sion­al­ly afford to splash on some­thing spe­cial at £5 a pint.

So Mr Hawkes is right: brew­ers and their boost­ers need to find bet­ter ways to tack­le this issue than berat­ing or guilt-trip­ping. Equal­ly, when a brew­ery makes a com­mer­cial deci­sion to pull out of cask, or refus­es to budge on price, con­sumers (and espe­cial­ly real ale cam­paign­ers) shouldn’t be turn­ing the guilt-gun back on them: they’re doing what they feel needs to be done to sur­vive in an ever-more com­pet­i­tive mar­ket.

21 thoughts on “Cask Ale is Too Cheap/Expensive”

  1. This is what I wrote a few years ago on the his­tor­i­cal rea­sons why cask is cheap­er than keg:

    When keg beers and lagers were first intro­duced in the 1960s, they sold at a high­er price than cask beers as they were some­thing new and dif­fer­ent, required an invest­ment in refrig­er­a­tion equip­ment and CO2 cylin­ders, and held out the prospect of more con­sis­tent qual­i­ty. That pret­ty much remains the same today, even though the mar­ket­place has changed beyond recog­ni­tion. Even bog-stan­dard cook­ing lager like Car­ling is 20 or 30p a pint more than cask bit­ter. There is a lot of his­to­ry to over­turn.”

    Also remem­ber that, when you pay £4 in one pub for a beer that sells for £3 in anoth­er just down the road, none of that extra £1 goes to the brew­er.

      1. Doh! Sor­ry. I thought you’d linked to the orig­i­nal arti­cle.

        In my defence I was mak­ing toast for my kid and get­ting ready for school.

  2. I’m no econ­o­mist but I real­ly don’t under­stand how those that favour increas­ing the price of cask beer think it will “save” it. Sure­ly they don’t think it will help sales, so do they real­ly think there’s a prob­lem with sup­ply?

    1. I might be being thick here, but isn’t it pret­ty obvi­ous how peo­ple being will­ing to spend more per pint on cask beer would be a pret­ty good thing for cask beer?

      1. I still don’t get how that’s sup­posed to work. Is there real­ly going to be a grass roots move­ment of beer geeks demand­ing to pay more for cask beer?

        1. No, but the argu­ment is that there might be a grass roots move­ment of beer geeks who can be per­suad­ed to pay more for cask beer that they like, rather than tut­ting that it’s over­priced com­pared to OBB in a Sam Smiths pub or a pint of IPA at Wether­spoons.

  3. Just to add my 2p worth.

    i note roger ryman was quot­ed yes­ter­day as want­i­ng SBR changed as small brew­ers were at an advan­tage being in reciept of it!

    If SBR was removed many small brew­ers would cease to exist (maybe that’s a good thing? maybe not) the prob­lem I have with his point of view is that many brew­ers his size and big­ger, sell into the mar­ket­place he is talk­ing about at a low­er price than most of the small brew­ers he wants SBR remov­ing from.

    Also the largest cask ale pro­duc­er in the world Marstons announced prof­its of £100 Mil­lion today they are AFAIAA cur­rent­ly sell­ing cask beer into free­trade on a buy 3 get 1 free basis which equates to £46.65 per 9 gal cask over the 4 casks (fig­ures i’ve been told not seen in black & white). when the duty on a 4% beer equates to just over £30 per 9gal they are mak­ing, sell­ing, cask clean­ing, deliv­er­ing etc a cask of beer for just over £16 gross rev­enue, they also have 500ml bot­tles of banks for sale in Tesco etc at 90p a bot­tle? as a small brew­er it costs me more than £1.18 to pro­duce & pack­age a like for like beer on the vol­umes we pro­duce using a SALSA accred­it­ed pack­ag­ing co.

    Mcspoons may offer a life­line to the drinker but they don’t offer a life­line to their sup­pli­ers based on the buy­ing for­mu­la they gave me when approach­ing us to buy our beer 30.4 X ABV + £72 per brew­ers bar­rel their offer­ing for a 4% beer works out at 30.4 x 4 + 72= £193.60/4 = £48.40 per 9 gal cask /72 pints = 67p per pint paid to the brew­er take away duty and the brew­er is sell­ing their beer at 25.5p per pint. Mcspoons sell­ing at £1.89 per pint still make 57.5% GP the brew­er would be work­ing to about 19–22% GP yet in the case of the small brew­ers noth­ing like the economies of scale of their com­pe­ti­tion.

    Sam Smiths are so cheap, because its a strange busi­ness mod­el where as I under­stand it the brew­ery must be con­tained with­in the fam­i­ly and nev­er sold, so as far as I can see don’t run much above cost.

    Beer price in pubs is pret­ty much at its ceil­ing, the prob­lem many brew­ers have is the price of alco­hol in super­mar­kets 20 odd years ago the price between a bottle/can of beer in a super­mar­ket or pub was neg­lig­ble, now its pret­ty much 1/2 price in super­mar­ket, & costs on pubs are ris­ing its not a lev­el play­ing field.

    cou­ple that with the price of import­ed alco­hol (Wine being a prime exam­ple) you can sit at home and get tid­dly on a decent qual­i­ty drink for £5 or £10 and have 2 meals too. It is no won­der peo­ple go to the pub less.

    The oth­er issue I see and hear more of is over­all qual­i­ty of real ale, many cask drinkers are turn­ing away from cask beer as the cur­rent trend to have a new beer on the pump every time means it can be russ­ian roulette try­ing to find a decent beer to drink, qual­i­ty and con­sis­ten­cy needs to improve. (which brings me back to “maybe that’s a good thing?” with SBR)

    would remov­ing SBR get rid of many of the char­la­tans that claim to be brew­ers & leave only the seri­ous arti­sans in the game? or would it only leave the big com­pa­nies & high­ly invest-able mar­ke­teers behind?

    Either way i cant see removal of SBR increas­ing the prof­its per cask of any brew­er in the mar­ket, only the amount of mar­ket the larg­er com­pa­nies will have access to by out pric­ing the small­er com­pe­ti­tion.

    & the Biggest ele­phant is the cost of tax on the pub pint as it affects all in the sup­ply chain.

    1. I’m with you on 90% of this. I’ve been mak­ing and sell­ing cask beer for 20 years. It has always galled me that the main­stream keg beers are bought by land­lords at a price they won’t pay for my beer. Pub drinkers who buy main­stream brands must be bear­ing the cost of the mas­sive mar­ket­ing cam­paigns that keep those brands fly­ing off super­mar­ket shelves.
      You are spot on in iden­ti­fy­ing super­mar­ket prices as the root cause of this dilem­ma. Many pub land­lords are fight­ing to stay sol­vent. They would pay more for their local­ly pro­duced small brew­ers’ beer (if free of tie) if they could afford it. Unfor­tu­nate­ly, cheap cask beer is what keeps many of them afloat. Every so often one of these hard pressed pubs will buy beer from me because they know I offer high qual­i­ty and those sales feel like a real val­i­da­tion of what we have always done. If super­mar­ket prices were more in line with pub prices, pubs would be more prof­itable and we could see the bar­gain base­ment brew­ers being kicked out of the mar­ket (in my dreams).
      As you say, the largest brew­ers in the coun­try can eas­i­ly under­cut the SBR brew­ers (who wants to pay £4 for a pint of Spit­fire when you can get 500ml for £1.25 in Aldi and Tesco?). The SBR relief is to take account of economies of scale in the sys­tem that make a flat rate of duty unfair for small scale pro­duc­ers.
      There have always been brew­eries that sell beer at kamikaze prices and they even­tu­al­ly fail. I have always sold beer at prices above the aver­age in our area, and walk away from pubs that want unre­al­is­tic dis­counts. Sell­ing beer to pubs at the moment is very dif­fi­cult but cut­ting the num­ber of brew­ers is not the answer – all the region­al brew­ers are increas­ing pro­duc­tion at a rate that dwarfs the amount added by new entrants to the mar­ket.
      Small pro­duc­ers keg beer has devel­oped it’s own mar­ket and cus­tomer expec­ta­tions, quite remark­able to watch from the side­lines and con­grat­u­la­tions for those with the insight and con­fi­dence to make it their own. It is also very hard work and can be a bru­tal and unfor­giv­ing mar­ket if you don’t have the brew­ing and mar­ket­ing skills to main­tain your momen­tum. There are some amaz­ing beers out there but I know as many drinkers who are “craft averse” as I do fans of the edgy end of brew­ing.
      In sum­ma­ry – cheap beer is caus­ing prob­lems. The cheap­est beer is cur­rent­ly being pro­mot­ed in the run up to Xmas as a loss leader to dri­ve super­mar­ket sales. That is killing the pub trade.

      1. Yes exact­ly & Prop­er Job & Black Job are £1.50 VAT Inc each in Tesco if you buy 4

        so for Prop­er Job @ 5.5% thats 51p duty & 26p VAT leav­ing 73p for the bot­tle, cap, label, package(box) invest­ment in brew­ery, rent, rates, wages, trans­port, & prof­it for Tesco & St Austell, it would cost me 53p just to get the beer into a bot­tle with­out the duty, using a SALSA pack­ager. So How does SBR put me at an advan­tage?

        Large regionals/nationals?globals sell­ing at large vol­ume low mar­gin to Super­mar­kets are the cause of a poor pub trade & poor Whole­sale prices for cask not SBR.

  4. Beer price in pubs is pret­ty much at its ceil­ing, the prob­lem many brew­ers have is the price of alco­hol in super­mar­kets 20 odd years ago the price between a bottle/can of beer in a super­mar­ket or pub was neg­li­gi­ble, now its pret­ty much 1/2 price in super­mar­ket, & costs on pubs are ris­ing its not a lev­el play­ing field.”

    But if cheap super­mar­ket beer dis­ap­peared tomor­row peo­ple *still* wouldn’t have more mon­ey to spend in the pub, and still wouldn’t want to drink every pint in the pub.

    1. I don’t think its Just Cheap super­mar­ket beer!

      It’s cheap super­mar­ket Alco­hol espe­cial­ly Wine, when you can get 2 meals and a Free bot­tle of 1/2 decent wine for £10 why drink beer in a pub at £3 a pint?

      Cur­rent Alco­hol Pol­i­cy pro­motes for­eign imports and does noth­ing for British Man­u­fac­tur­ers, and Inde­pen­dent retail­ers, & with the recent change in how pubs are rat­ed, many pubs are now unvi­able busi­ness­es as a result of unre­al­is­tic over­heads & Price in super­mar­kets.

      I also think super­mar­kets sell cer­tain lines at cost take the cur­rent deals on spir­its in super­mar­ket.

      you can buy 1Ltr of Russ­ian Stan­dard Vod­ka for £16 Vat INC
      Duty on 1Ltr 40% Spir­it £11.28
      VAT on £16 £2.67
      so leaves £2.05 to cov­er pro­duc­tion of Vod­ka, pack­ag­ing, import costs includ­ing import duty (assum­ing it is made & bot­tled in rus­sia) trans­port costs, Pro­mo­tion­al POS & Adver­tis­ing etc etc etc…
      It just doesn’t add up? Unless Tesco etc pay £16 + VAT for the prod­uct & get the VAT Back when doing their returns and then make up their £2.67 VAT loss on the sale by adding 1,2 & 3p on high vol­ume none VAT items, & In effect mak­ing the Bot­tle of spir­it VAT free or Neu­tral?

  5. Sad­ly cask is some­thing akin to uni­corn shit in the US, but even with reg­u­lar old craft beer I feel like prices are spi­ralling out of con­trol. It is stan­dard now in Cen­tral VA to pay $6 for a 16oz glass of glass, which works out to $7.50 for a prop­er sized pint, which is £5.50 at cur­rent exchange rates. A six pack of pret­ty much any­thing from the big craft brew­eries, includ­ing here the AB-InBev brew­eries, is like­ly to be about $10 for the equiv­a­lent of 4.5 US pints, mak­ing each pint at home cost $2.20. Those num­bers are even more star­tling in South Car­oli­na where I can get Sier­ra Neva­da 6 packs for $8 ($1.77 per US pint), as opposed to $5 in the pub. Is it any won­der that I find myself less and less going to the pub for any­thing more than a pint or 2 after work on a Fri­day (sure hav­ing 6 week old twins might play into that some­what)?

  6. The oth­er issue I see and hear more of is over­all qual­i­ty of real ale, many cask drinkers are turn­ing away from cask beer as the cur­rent trend to have a new beer on the pump every time means it can be russ­ian roulette try­ing to find a decent beer to drink, qual­i­ty and con­sis­ten­cy needs to improve. (which brings me back to “maybe that’s a good thing?” with SBR)

    I’ve seen this argu­ment a few times, and I’m gen­uine­ly baf­fled by it. Either in the Bath/Bristol/West Wilt­shire area we’ve got bril­liant pubs or, I’m spec­tac­u­lar­ly lucky, but I can’t remem­ber the last time I have had a bad pint.
    I’m a big fan of my two locals (both 400 yards from my house) one is a skit­tle alley, darts, prop­er booz­er type that always has Prop­er Job, Doom­bar & But­combe, all of which are fine, the next has its own onsite micro­brew­ery, and serves a vast array of beers. Nei­ther pub serves bad beer, same in cen­tral Bath pubs and Bris­tol pubs when I go out after work. Are peo­ple actu­al­ly get­ting bad beers in pubs reg­u­lar­ly?

    1. over­all qual­i­ty of real ale” is one rea­son why on my trips to the UK I am hap­py to go to a Spoons pub more often than not. I think I have only had a bum pint once or twice at Spoons in all my years of drink­ing.

  7. What’s killing the small­er brew­eries is the beer tie. You can eat a slim prof­it mar­gin on cask if the land­lord buys some keg off you to bal­ance the sale, the prob­lem is that so few land­lords are even allowed to buy keg beer on the open mar­ket.

    The small brew­eries doing the best are the ones that can sell into the big cities that have lots of free of tie venues to buy the high­er mar­gin prod­uct. Iron­i­cal­ly these venues also seem more will­ing to pay the price of a strong and hop­py cask beer as their cus­tomers will pay for it.

    As a small brew­er there is lit­tle to no mon­ey in cask beer. There’s also lit­tle to no mon­ey in keg if your cus­tomers aren’t allowed to buy it.

  8. This bat­tle rages on…and on…and on.….Ever since Mar­co Pierre White decid­ed to charge £5.00 a pint because he said it was a labour inten­sive prod­uct.
    Labour inten­sive it may be but its a labour of love for some, I ran a pub for ten years where when I took it over, ale meant a gener­ic IPA on one hand pull. It took me a while but I got it up to five hand pulls and a joint first in our local Cam­ra branch. Our ales were cheap­er than our kegs, we made no bones about it, we want­ed to sell it while it was in peak con­di­tion, our rep­u­ta­tion spread, we sold more, our turnover was up, our prof­it was up. Cus­tomers were hap­py, we were hap­py. I dont run pubs any­more but I still love real ale, and some­times I walk into a bar, order some­thing which sounds great, pay £4.50 to £5.00 a pint and quite hon­est­ly wouldn’t wash my dog with it.
    Get your prod­uct up to a pre­mi­um prod­uct if you want to charge more for it, but if you get the price right and the prod­uct is spot on you’ll sell more because your rep­u­ta­tion will pre­cede you.

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