Price rises?

[observer]

Believe the price of booze is set to rise by 10% next year, and hasn't petrol been rising too?

[Paul Kennedy]

Yes about 26%, it will go up a further 2.5% when VAT returns to 17.5% in January. Doubt if duty will go down to compensate though, you might recall that it was increased when VAT was reduced.

 

Tax and death, the only two certainties in life.

[Lt Kije]

About right Paul

[observer]

So we'll all be drinking and driving less?!

[Bazj]

But how are they increasing the price of booze when every week ASDA can sell 15 bottles of Bud for ?8.00 when the same bottle will cost over ?2.00 each in a pub!!

[Eagle]

The landlords , stewards & managers are usually first in the queue.

[inky pete]

....only those few who haven't had beer ties forced upon them!

 

Many pub companies are charging landlords and tennants over twice as much for certain beers as the supermarkets are selling them for.

[Bazj]

....only those few who haven't had beer ties forced upon them!

 

Many pub companies are charging landlords and tennants over twice as much for certain beers as the supermarkets are selling them for.

 

But surely under EU rules, that sort of trade restriction is not allowed anymore (Bosman and such like) Maybe our resident Euro Lover Kije would like to explain why the EU is letting down pub landlords??

[observer]

Just for interest: how much do the pubs pay the brewers for the same kind of ale that the s/markets are selling - surely they both have to pay the same?

[inky pete]

Don't know about the EU, but there has just been an OFT inquiry into the beer tie arrangements which concluded that the beer tie arrangements which force landlords to buy only from their pub company, at whatever price the pub co sets, is not anti-competetive.

 

http://news.bbc.co.uk/1/hi/business/8319771.stm

 

Unfortunately, what they appear to have looked at is whether or not there is effective competition and consumer choice between individual pubs at the retail level - not the question of whether or not supply side prices are being kept artificially high.

 

This article puts some numbers on it and claims that an average tied landlord is paying around ?20,000 more for his beer per year than the landlord of one of the few remaining freehouses.

 

http://www.thepublican.com/story.asp?sectioncode=7&storycode=65655

[KeithR]

This article puts some numbers on it and claims that an average tied landlord is paying around ?20,000 more for his beer per year than the landlord of one of the few remaining freehouses

 

That and the high Council tax and business rates are the main reason pubs are closing.

 

The smoking ban can actually help landlords by allowing them to apply for a reduction in business rates for the loss of custom.

[Eagle]

Do you think that being tied to a brewery stops them taking advantage of the Supermarket's silly prices?

[inky pete]

Yep.

 

Landlords have been sacked and evicted for sourcing products from suppliers other than their pubco.

 

Plus, most supermarkets impose a maximum purchase quantity per customer on the beers they are selling as loss leaders.

 

Just thinking about the numbers quoted in the article from The Publican. An average, smallish, local pub might have about 20 customers per night each drinking about 4 or 5 pints. Call it 100 pints served per night - it'll be significantly more at the weekend, but could well be significantly less Sunday to Wednesday nights. I was in my local on Sunday night and there were no more than half a dozen customers all night.

 

100 pints per night average would equate to 36,500 pints per year. If the landlord is paying ?20,000 per year over the odds due to the beer tie that works out at 55p per pint of extra cost - nearly 65p extra on the price once the VAT has gone on.

 

Weatherspoons and the British Legion have both shown that beer can be profitably sold at far less per pint than most of us are used to paying in pubs. Weatherspoons do it by using their purchasing power to buy from the brewers in bulk at a good price and by not charging their tied landlords inflated supply prices. The British Legion do it by not being tied at all, and having a commitment to providing value for money to their customers.