Generalisations about beer culture opinion

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 replies on “Cask Ale is Too Cheap/Expensive”

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.

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.

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?

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?

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?

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.

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.

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.

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.

“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.

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?

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)?

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?

“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.

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.

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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