News, Nuggets and Longreads 2 March 2019: Retirement, Simplification, Adjuncts

Here’s all the bookmarkworthy writing about beer and pubs that landed in the past week, from the mysterious behaviour of dads to corn syrup.

First, some depress­ing news from the north west of Eng­land, in a sto­ry that’s unfold­ing right now: Cloudwater’s much-antic­i­pat­ed Fam­i­ly & Friends beer fes­ti­val has run into a licenc­ing issue and may not go ahead today. In a state­ment issued first thing this morn­ing, the brew­ery said:

The police have informed us that Upper Camp­field Mar­ket is not, as we have been assured on many occa­sions by the man­ag­ing agent act­ing on behalf of Man­ches­ter City Coun­cil, licensed for the sale of alco­hol. The attend­ing police offi­cer ear­li­er this evening, the two licens­ing offi­cers, a licens­ing solic­i­tor, and even the night-time tzar of Greater Man­ches­ter, appear to have exhaust­ed every option to allow us to oper­ate in Upper Camp­field Mar­ket tomor­row. If we ignore the licens­ing team, and run tomor­row any­way, I risk an unlim­it­ed fine or six months impris­on­ment.

It’s a reminder of just how much behind-the-scenes bureau­crat­ic bat­tling has to go on to put on any event with booze, and gives a glimpse into why entre­pre­neurs so often seem to end up regard­ing local gov­ern­ment as the ene­my.

Con­tin­ue read­ing “News, Nuggets and Lon­greads 2 March 2019: Retire­ment, Sim­pli­fi­ca­tion, Adjuncts”

The Wrong Type of Income

landlord_whitbread_1953

We have been think­ing a lot about pub com­pa­nies recent­ly, not least because of the Fair Deal for Your Local cam­paign. We still don’t under­stand enough about the details of the busi­ness mod­el to have a strong opin­ion on its rights and wrongs, but one thing has been puz­zling us: why do pub­cos both­er sell­ing beer?

Why do they both­er main­tain­ing a buy­ing-sales-dis­tri­b­u­tion net­work when they could just make mon­ey from rent­ing at mar­ket rates to peo­ple who want to run a gen­uine free­house?

We won­der if the answer is tax.

At present, our tax sys­tem dis­tin­guish­es between trad­ing income and let­ting income, with the for­mer qual­i­fy­ing for many more ‘reliefs’ (tax breaks). This is because trad­ing is seen to be gen­er­at­ing ‘eco­nom­ic activ­i­ty’ while let­ting and pas­sive­ly hold­ing invest­ments is not. So, from the pub­cos’ per­spec­tive, rental is prob­a­bly ‘the wrong type’ of income.

Can any­one who works in the indus­try, or at Her Majesty’s Rev­enue & Cus­toms, con­firm our deny our hunch?

Pub Tenants in Revolt

Watneys barrel.Seri­ous dis­cus­sions are under­way about state inter­ven­tion in the pub com­pa­ny (‘pub­co’) busi­ness mod­el, and pub­co ten­ant land­lords are organ­ised and on the move with the Fair Deal for Your Local Cam­paign.

Forty years on, what we are actu­al­ly see­ing is the final phase of a slow motion response to the 1969 Monop­o­lies Com­mis­sion report on the brew­ing indus­try, and the 1972 Erroll report into pub licens­ing, and the Fair Deal cam­paign is a con­tin­u­a­tion of a bat­tle pub­li­cans have been fight­ing for years.

Back in the sev­en­ties, it was the big brew­eries from which the pub­cos evolved which bore the brunt of sim­i­lar protests, and Watney’s had par­tic­u­lar dif­fi­cul­ties. When, in 1970, they attempt­ed to replaced eighty ten­ant pub­li­cans with pub man­agers, the Nation­al Fed­er­a­tion of Licensed Vict­uallers (NFLV) – the pub ten­ants union, in effect – called for its mem­bers to boy­cott Watney’s prod­ucts wher­ev­er pos­si­ble. Hotels, bars and free­hous­es stopped tak­ing Red Bar­rel and the sto­ry of the plucky under­dogs made head­lines. Even­tu­al­ly, though they weren’t able to pre­vent the rise of the man­aged house, the NFLV did win com­pen­sa­tion for the ten­ants in ques­tion, and improved terms for those tak­ing on ten­an­cies there­after.

That wasn’t the only kind of protest, though, and this kind of show­boat­ing was par­tic­u­lar­ly emo­tive:

Mr Jim Lewis recent­ly had a wake at his pub, the Bridge Inn, near the ham­let of Sken­frith, Mon­mouthshire… The guests’ mer­ri­ment could be traced to a real sense of loss, for the wake was for the pub itself… Whit­bread and Com­pa­ny, the brew­ers who owned the pub and the two oth­ers with­in a radius of about two miles, had decid­ed to with­draw the license… (The Times on 12 June 1971.)

Mock funer­als and wakes are still hap­pen­ing, of course, as at the Black Lion in Kil­burn, North West Lon­don, only last week.

We’re still learn­ing about Erroll, and we’ve bare­ly begun our read­ing on the tremen­dous­ly com­pli­cat­ed con­se­quences of the Beer Orders of 1989, so we’re cau­tious to opine, but what does seem like­ly is that if pub­cos sulk and with­draw from the mar­ket, and the mod­el col­laps­es, it might take twen­ty years for things to set­tle down again. In the mean­time, the change would be painful for almost every­one, but per­haps worth it in the long run.

Freehouses don’t embrace freedom

We recent­ly got our grub­by hands on a copy of a cat­a­logue from a com­pa­ny which sup­plies cask beer to free­hous­es.

The selec­tion on offer did include some excel­lent beers, but the over­whelm­ing impres­sion was a of a long list of the usu­al sus­pects – lots of sim­i­lar brown bit­ters, a smat­ter­ing of gold­en ales, and very few dark beers at all.

It made us realise that the rea­son so many free­hous­es have the same old beers on is that, even they could the­o­ret­i­cal­ly buy and sell what­ev­er they like, they choose to use these mid­dle men because it’s con­ve­nient and (pre­sum­ably) cheap­er.

But aren’t land­lords who use these sup­pli­ers severe­ly lim­it­ing their options? Aren’t they just act­ing as if they were in the grip of a pub­co?