Monday, 15 December 2008

Similar differences

Being here in Oregon, as I've previously eluded to, I'm having a struggle rationalising the apparent failure of the British pub with the fact that the bars here seem to be doing alright. To help me and possibly the reader to understand this, it might be helpful to simply describe the tangible differences.

The whole of the USA is in a post prohibition era. OK, it was 75 years on the 5th December since the 21st amendment was ratified, but even today there are noticeable laws here that pamper to the prohibitionist views. Additionally, the brewing industry was all but wiped out by the prohibition period. Only the major big brewers traded by exporting but craft brewing was annihilated.

The very curious aspect of the liquor laws here in Oregon is the strict control of "hard liquor". Bars serving any type of spirit have to also provide a minimum food menu consisting of 5 clear menu items for the whole period of trading. There are other more subtle aspects such as where "minors" can be in the property and under what circumstances, such as only for the purposes of consuming food. These laws appear to be specific to the state of Oregon and can be different in other states, but shows the clear link that the lawmakers make between reasonable drinking and going out for food. This a stark contrast to the correlation between the drinking only bars that exist world wide and arguably irresponsible heavy drinking.

A clear federal law exists as a concession to the prohibitionist movement. In this law there is a three tear system where no company may make alcohol and also wholesale it and nor can a wholesaler own the retail outlet. Here, Safeway has to buy off a wholesaler who in turn has to buy off the brewery. This prohibits any tied outlets.

The relaxation to this recently has been the allowances of the Brewpub format. A pub can brew it's own beer providing it only owns one other pub. Effectively limiting a tied estate to one or two pubs. There is no doubt that this has seen an incredible increase in the number of brewpubs in Oregon. My sources here tell me that providing the brewpub produces less than 1000 us barrels a year they can sell direct to a retailer.

I find it interesting that there is resistance to the removal of the beer tie in the UK but generally there seems the there are few complains about US tie limitations. There are complaints about the middle man wholesaler restricting trading abilities but it is very much appreciated by beer drinkers here that there are no outlets controlled by big breweries.

The "regionals" here tend to be chains of brewpubs. Larger establishments where every other pub in the company has a brewery to enable the laws to be adhered to.

A key difference that applies to the States and the European mainland alike is the attitude to food alongside drinks in bars. Here the industry standard for sales split is 60% food and 40% drinks. In the UK there is general outcry where an establishment majors on food over drinkers. But here in the USA very few places would work without the reliance on food sales.


Velky Al said...

The major weakness of the American system is that by brewers being unable to sell directly to the pubs it creates a system whereby the bigger breweries can effecting "buy" the wholesaler by offering better kick-backs and incentives.

I am starting to think that all pubs should be free houses.

Jeff Pickthall said...

The problem in the US is that the laws vary by state. Licenses are required to wholesale but getting one depends on political patronage and big money, so much so that some states suffer an anti-competitive system possibly worse than the tie. (BTW it's where John McCain's wifes' family fortune was made, Hensley & Co.)

Woolpack Dave said...

Velky Al,

Fundamentally I agree all pub should be free houses. I don't think it can happen in any less than say 10 years and perhaps more. The shock to the whole industry would be too much.

A question though: How many pubs could a microbrewery own before the pubs cease to be free houses? 2? 10? no more I think.

Most people here who care about beer would like to see the wholesaler thing changed but retain the limit of 2 pubs owned by any one brewery.

The issue of corruption, which I don't think is too strong a word to use, controlling the wholesalers is of concern.

In the UK you need no license to wholesale alcohol providing it is duty paid. You must not retail without a license of course.

Velky Al said...


Perhaps a subtle distinction needs to be made between a micro-brewery and a brewpub.

To my mind a brewpub should be free to sell any extra product on the open market, whether that would be bottled, cask or keg. I don't think it would be practicable for a brewpub to take on any more than one other pub.

Micro-breweries on the other hand should be allowed a limited pub estate, as you say, perhaps 10 pubs, but the licensee must be allowed freedom to have other beers as well as the micro-brewery's. Something along the Everard's line is what I am thinking here.

Pubcos should in my opinion be broken up.

Erlangernick said...

I'm not in the business, nor have I been, and I may only be talking out my Arsch, but I think your point about the *federal* law might be off. There may be no such federal law. (If it matters.) As with so many things, such laws vary by state.

And the bit about Yanks not being as "big" as one would think...if "big" is a polite euphamism for "McDonalds-fed fat", then don't forget that you're in the most active, outdoorsey corner of the US. I can point you to some locales in the midwest where you won't go a day without encountering a majority of the morbidly obese.

Woolpack Dave said...


Any comments about US law, be it federal or state are completely from information Ted has given me - If I'm wrong it's his fault (but don't be too hard on him, it's his birthday)

About big Americans, yes, Ted has pointed out that not all are a nice as Origonians, I can only go off experience. My current experience is very good.

Tyson said...

I think the best pub models here are brewers like Copper Dragon & Ossett. They have some great pubs, brew some cracking beer AND sell guest beers. I can't see the logic of limiting them (or others) to 10 pubs. As I've said previously, that would leave many drinkers in beer deserts-something I don't wish to see. Hence I shall fight to keep some form of the tie.