Thanks Damien for inviting me to contribute.
Codger Contra Camra
by David Ruaune
I find Camra’s call for minimum pricing on supermarkets (i.e. putting the price of alcohol up) quite angering, even shocking. Surely it is obvious that it is the pubs which overprice, partly because of taxation. Also, that many pubs are wanting in all sorts of respects - I have in the past stood in the centre of Stockport, wanting to drink in a pub and having the disposable income to do so, but not fancied any that came to mind; and Stockport is better served than many places.
I'm not, on the whole, pro-market or anti-interventionist, but for Camra to call on the government to intervene to put prices UP is madness, especially in the present climate when rising prices are crippling people, especially the poor.
Camra are directly operating against my interests - effectively, they want to make me poorer.
I think it is the expensiveness of pubs that is anomalous. Supermarkets pushing prices down and persecuting suppliers? My main concern would be animal welfare, which I don't think applies to hops! Any further, and we're into complex economic arguments. If Camra expect the government to intervene on behalf of suppliers in a way which would have the effect of pushing ALL prices up (no exception could be made just for brewers - there's a better argument over food because of animal welfare) especially in the present economic situation, then Camra must have been on the loopiest of loopy juices.
The community argument - I agree there is a social cost to losing pubs, but if so, the government should intervene in a way which supports pubs, not in a way which penalises competition. I'm not sure that the social cost is so great, either, so I can't see enough of an argument for a special case on social grounds.
Okay, in general “community” is a good, though fairly abstract, thing. But should people have alternatives to such community cut off to force them to be communal if they fancy a drink? Who gains from this? Also, there are other forms of community – meetings of friends at one’s home to watch the match or a good film on today’s widescreens with some quality bottled beer is admirably communal and civilised.
There's a nasty oppressive moralistic edge to their argument here, as if one is obliged to support such rackets as the breweries and pubs because they represent "community."
For years, pubs and breweries have not given a good product / service / value for money, and are now getting their come-uppence, and that's coming from someone who's put a lot of money over bars in his life. This is a factor independent of supermarkets. As well as cheap beer, many supermarkets also offer a great variety, and many pubs do not.
A lot of pubs haven't moved on from something very ‘fifties or older, or where they have, the change has been bad. They thought they had a monopoly, and atrophied. Now, it's boo hoo hoo. (I must add that I do still patronise pubs, and have great respect for the service and friendliness of my favourites.)
The "pubs means less binge-drinking" argument is irritating bullshit. Home drinking is relatively safer drinking, for all sorts of social reasons too wide to go into here.
Loss leaders? Nothing wrong with. Ban happy hours, on that logic.
Alcohol in bars is a lot cheaper in a lot of other countries. Why? There has been a long-term collusion between the taxation authorities and the breweries. If pubs are arguably in many ways a social good, as Camra seem to say, why doesn’t Camra focus on the demand for a lowering of taxes on alcohol sold in pubs?
What if the government could intervene to put off-licence prices up and pub prices down, proportionately? I'm still not sure I support this; I think I AM a bit of a free marketeer on this specific argument!
Camra claims that "Large concerns such as supermarkets can force out small concerns like pubs." But they are not in the same business - it is up to pubs to capitalise on what they have which the supermarkets cannot provide - community, society, etc., as a selling point, not as a load of New-Labour-targeted moralising and whingeing.
I ought to mention that one would expect and accept some difference in price between supermarket and pub - one is supposedly and in many ways actually receiving a higher value of product and associated service with a pub. The overheads that are part of this should not be a problem.
Regarding the might of the retailers putting pressure on suppliers – there is some truth in this, but doesn't this happen right across the board, and isn't there to some extent a circularity here? Suppliers are consumers, and consumers are suppliers, so prices have to have some relation to incomes.
Perhaps the problem is the other way around - the suppliers of pubs, the breweries, are not subject to enough pressure to keep the prices down because they have some sort of rigged set-up, like a monopoly, through the ownership of premises. A possible solution may be to allow pub landlords and managers more freedom to buy from whom they will, if necessary backed by government power.
The last I heard, the Robinson family had a big house in Wilmslow; shocked to hear they're doing so badly now.
Also, what of the little guy struggling to get by with his off licence? Is he exempt from these enforced price increases?
NOTE : The loss-leader dynamic is separate from the supermarket-power-over-suppliers dynamic. The former does not hit the supplier (though it does hit pubs), the latter hits both. To force supermarkets to minimum prices might not help the suppliers, as it would presumably affect supermarkets adversely, and they would be likely to try to pass at least some of that cost onto suppliers.
Here is an article from Foodbev http://foodbev.com/ArticleDetail.aspx?contentId=1510
together with my notes on Protz’s argument –
CAMRA calls for Government action to save pubs
Published date: 15 September 2008 Forward article Print article
The Good Beer Guide from CAMRA provided 4,500 full pub descriptions
At the launch of the Good Beer Guide 2009, CAMRA (Campaign for Real Ale) is calling on the Government to introduce measures to prevent supermarkets selling alcohol as a loss leader. In response to the announcement that 36 pubs are closing every week, with a gloomy outlook for many more British pubs, the UK consumer group
-------- self-appointed -------------
is urging the Government to introduce minimum pricing to reduce the gap between supermarket and pub prices.“Cheap beer in supermarkets – often sold at less than the price of bottled water –
---------- bottled water is an expensive middle class fad anyway – it often charges at over a pound for a pint --------------
is killing the British pub,” said CAMRA Good Beer Guide 2009 Editor Roger Protz as he launched the 2009 edition.“Over 150 pubs a month are closing,” Protz said. “And the main reason is simple: people are abandoning their locals because they can buy cheap supermarket beer at a fraction of the price charged by pubs.”
-----------Could it be that pubs overcharge?-----------
CAMRA claims that well-run community pubs provide a perfect environment for adults to enjoy alcohol responsibly,
----------this is core – and meaningless-----------
but as small businesses, they are unable to absorb tax and cost increases and cannot demand the wholesale discounts enjoyed by supermarkets. Pubs are no longer able to compete on a level playing field.Industry statistics show that off-trade beer prices have fallen by 1% in the last year, while pub prices have increased by around 4.4%. Since 2002 Off-trade beer prices have fallen by 7% while pub prices have increased by 24%.
---------- So why are pubs upping prices like that? ----------
As a result of the 10% beer tax increase in this year's Budget, prices in pubs have increased by 4.4% in the last year and the average price of a pint of lager in a pub is now £2.82. In contrast, prices in the off trade have fallen by a further 1% as a result of price promotions.
---------- But the same tax applies to supermarkets.----------
CAMRA believes Government action is required to help pubs as they are the best place to enjoy alcohol responsibly in a regulated and socially controlled environment.
---------This statement needs careful study.---------
In a recent CAMRA pricing survey, research found drastically drastically here means good value low figures in the off-trade with mainstream global lager bands on sale for as little as 57 pence a pint.Examples of price deals found in supermarkets in September 2008:
Sainsbury's: Foster's lager – 3 cases of 440ml cans for £20. That's the equivalent of 57.4 pence per pint.
Asda: John Smith's Smooth Bitter – 3 cases of 440ml cans for £20. That's also the equivalent of 57.4 pence per pint.
Morrison's: 24 cans of 440ml Stella Artois lager for £15.47. That's the equivalent of 77.9 pence per pint.
Lidl: 8 cans of 440ml Carlsberg lager for £4.49. That's the equivalent of 56.9 pence per pint.
--------- Dividing a multi-packs down to get the price per pint is a bit naughty - the customer is committed to buying that bulk. (and as Damien pointed out in conversation with me yesterday, a similar argument applies to loss-leaders, as the customer is buying a whole basket of goods)----------
Mr Protz commented: “When a pub closes the community’s heart is ripped out and dies. It's a particular problem in rural areas, where the village pub is the heart of the community. People go to pubs for friendship, conversation, to enjoy an affordable meal, or just quietly read a newspaper. ”
---------- So don’t try to charge them over the odds for it-------- .
“And pubs are regulated licensed premises. Publicans who permit bad behaviour such as heavy drinking will lose their licences.“Supermarkets face no such restraints. They have no idea what happens to cheap alcohol once it leaves their stores. In too many cases, it's passed on to under-age drinkers. It's the supermarkets, not pubs, that encourage binge drinking, with their massively discounted sales of alcohol. ”
--------- Illegal behaviour or bad behaviour is an ill, and that is all that can be said. If someone goes to a pub and gets tanked up, the landlord does not follow them home to make sure they are out of harm’s way; they simply make a profit. Anyway, it is not for any self-appointed real-ale gurus to start using binge drink arguments to support their spurious ideas of protecting pubs. ----------
--------- Actually, I’d go back to what I said – Camra arguing that government-enforced price increases on alcohol will help stop binge drinking is bullshit.-------
Roger Protz describes the relationship between big brewers and supermarkets as, “the economics of the mad house. Coors, the American giant that now owns the former Bass breweries in Britain, has seen its profits halve in recent years – mainly as a result of the deep discounts demanded by the retailers.
------ When a monopolistic giant gets its profits reduced by the demands and choice of customers, it is “the economics of a madhouse.” Roger must be furious when those great friends of ornery folk, the breweries, get subject to the market. His “economics of a madhouse” bit seems either badly edited from a fuller article, or is weak; actually, I think it's just weak - and in defence of frigging Coors! Cheeky so-and-so using a lefty cliche to defend Coors profits!---------
“One solution is for England and Wales to follow the example of the Scottish government and consider a minimum pricing policy for alcohol sold in the off-trade. Urgent action is needed to help save that great British institution – your friendly, neighbourhood local. ”
-------Nobody that I have spoken to in England would support any such campaign.--------
comments between hyphens by me.