Recently, the publication Business and Enterprise Committee Pub Companies Report generated quite a lot of discussion in the trade press about the situation. The BBPA with it's Axe the Beer Tax campaign finding itself at odds with the Fair Pint Campaign. For me, I found the words from the BBPA to be completely transparent. The Fair Pint Campaign is pointing out that actually the beer tax is not the biggest thing that is effecting the pub industry. I agree with them, and the BBPA arguing against that rather highlights their own guerrilla tactics, exactly the thing they are accusing the Fair Pint Campaign of doing.
To go further on the beer tax issue, on a pint of 4% beer less than £0.40p is beer duty. It might interest you to know that typically, a tied house pays around that amount extra to it's landlord per pint compared to a free house and often more. If you add the compounding cost issues such as VAT and employer national insurance contributions1 the cost issues for beer for the tied house do indeed make beer duty less significant to the trade than Axe the Beer Tax would suggest.
I'm all for complaining about beer tax, but it is not the root cause of the pub industries problems. The major Pubco's must take a major part of the blame. I'm sorry to offend the supporters of the regional brewers, but these tie reliant industries must also be watched as I feel they are no better. The rhetoric from all of these larger companies, suggesting that real ale will die out without them, is beginning to irritate me. I supply only micro-brewed beer and am completely independent. I see no death of real ale any time soon. Regionals brew real ale because it is a way of getting CAMRA on their side, but in reality most of their revenue is from the tie on wines, spirits, RTDs and major lager brands, not their own brewed beer. Brewing real ale helps to ensure CAMRA supports the tie for this group of PubCo estates that happen to also brew a little bit of beer.
Yes, I know we need to think through any change to the tie system carefully, but ultimately I'm becoming convinced that we need to think about moving to a limit of much smaller than 500 tied houses per estate. If a brewery or product needs a monopolistic system to get the product to market then the product can't be that good. Ultimately, the tie prevents many microbreweries from getting their products to market even though many tied house licensees would love to stock their products. Supporting the tie in any form is restricting the development of microbreweries.
1Employer national insurance contributions are greater than employee national insurance contributions. Hidden taxes are significant to the small business. Beer tax is relatively small in comparison.
This post is crap and vitriolic. I'd like to be more subtle and eloquent, but I haven't got time, sorry. I hope to return to the subject soon. I'm hoping to attack the concept that without the tie many licensees can't afford to get into the trade. I'm hoping to argue that without being able to afford a free house many would be better off not starting in the trade at all.