Saturday, 7 January 2017

The price is right?



This post was originally written as a rather lengthy comment on James Beeson’s Beeson on Beer site. It was in response to James’s take on Cloudwater Brewery’s decision to discontinue cask beer.

Now the matter of what some see as a pivotal moment in the modern brewing world, but the more down to earth amongst us see as little more than a storm in a tea cup (beer glass?), has been done to death by several noted bloggers and beer writers. There has been much navel gazing, pontificating and head scratching, which at times bordered on the absurd. I threw in my own four penneth worth, which appeared to upset a few people who disagreed with me trying to put the whole thing into perspective, so I’ve little else that I wish to add on that particular issue.

My comment over at James’s place was primarily in response to his suggestion; one which was also raised by Matthew Curtis at Total Ales, that cask beer is seriously under-priced. The argument is that cask beer is a premium product and should be treated, and priced, accordingly. A retail value of £4 + a pint was mooted, with comparisons being made with many craft beers which hit the £5 or even £6 bracket!

Both James and Matthew, along with several others, view this as the answer to a maiden’s prayer; whereas I see it as both unworkable and something which will price cask beer out of many pubs. My response should also be viewed against claims that CAMRA are partly to blame for the under-pricing of cask beer; something I will set out to dismiss as a fallacy, even though I agree with several of the other things being said about the Campaign in relation to this.

Before we get started, I am a CAMRA member, of over 40 years standing, so I was around not long after the start of the Campaign, back in the “bad old days”. This was when so-called “real ale” was hard to come by; certainly in some parts of the country, but by no means all. Before going any further, I prefer the industry term “cask-conditioned” beer rather than “real ale”, especially as there are many fine beers around which, whilst not meeting CAMRA’s rather dogmatic definition, are “real” in every other sense of the word, and are beers I am quite happy to drink.

There is no need here to go over again how CAMRA was successful in saving cask-ale from extinction and how the Campaign spurned what became a tidal wave of new brewery start-ups, as well as sparking a huge and still growing fascination with beer in all its many styles. This interest in beer turned in to a global phenomenon, and there are now few places on the planet where it is not possible to find decent beer.

Having largely achieved its aims, CAMRA rather lost its way. This was despite a huge increase in membership which some would argue, was partly down to its decision to jump into bed with major pub chain, Wetherspoon’s and offer 50p a pint discount vouchers, as part of the membership package.

Despite a much vaunted “revitalisation project”, aimed at establishing a new direction for CAMRA and attempting to inject new life, nothing much has changed. The project’s findings have been published, although they are yet to be debated and scrutinised by the membership, but at first glance they appear to be little more than just tinkering around the edges. It increasingly looks as though the Campaign has lost a golden opportunity to reinvent itself, and we are left with a typical British “fudge”, but we will have to see how things pan out –a bit like “Brexit” really!

I mentioned the JDW vouchers earlier, and many have questioned CAMRA’s rather too cosy relationship with the pub chain. There have been accusations of poor cellar-practices at some Wetherspoon’s outlets, but as someone who rarely uses his Spoon’s discount vouchers, I may not be the best person to comment on this. I do think though, it is time for CAMRA, which is a supposedly independent consumer organisation, to cut its ties with Wetherspoon’s, in order to leave itself totally free from accusations of bias or, indeed, cronyism.

The subject of Spoons leads on nicely to the thorny issue of pricing, and here it was pointed out that when CAMRA started its campaigning, back in the 1970’s, cask-conditioned beer was normally cheaper than the heavily promoted “keg beers” which the Big Brewers were pushing at the time. The protagonists went on to argue that for historic reasons, CAMRA was keen for the price of a pint of cask to remain low; forgetting, or rather not knowing, the historical reasons why cask was cheaper than “keg” in the first place.

Back in the transition period of the late 1960’s – early 1970’s cask-ale was still pretty much the norm in most pubs. It had been the way draught beers had been packaged, conditioned and dispensed for decades, and the introduction of keg beers would, if anything, ensure that cask remained the cheaper option.

Keg beer requires additional equipment, in the form of in-line chillers, gas dispense systems (including CO2 cylinders and associated regulators), plus fancy illuminated boxes on the bar, in order to serve it. Someone had to pay for this; and that someone was the drinker, but it didn’t end there. The fact that keg beers received heavy promotion, often in the form of expensive TV advertising, meant additional costs which were also passed on to the consumer.

At first people were often prepared to pay extra for the consistency which keg beers brought with them; but unfortunately that consistency came at a price, and as someone unlucky enough to have drunk the likes of Courage Tavern, Whitbread Tankard, Watney’s Red and Younger’s Tartan, I can vouch for the fact they were consistently AWFUL! 

They weren’t flat, oxidised or even vinegary, as badly-kept cask ale could be, and unfortunately sometimes still is; they were dull, incredibly bland and totally devoid of character. In fact you could be forgiven for thinking that most heavily-promoted keg beers hadn’t been anywhere near a barley field or a hop-garden!

The major brewers loved them for their consistency and profitability, particularly given that cheaper and often inferior ingredients were used in their production. Also by being filtered and often pasteurised, they were stable, with a much longer shelf-life once broached, and there was normally very little wastage.

Fast-forward four decades and we now have keg beers which are brewed from some of the finest quality ingredients available, by brewers dedicated to their craft, leading to some truly excellent beers appearing in the market. Unfortunately this is an area CAMRA has totally failed to recognise, and this is my main bone of contention with the organisation. I am sure many other beer lovers feel the same way.

It is also true to say, of course, that there are many breweries turning out cask ales with the same dedication, and the same careful selection of ingredients, and there are some equally fine cask ales out there, but unfortunately there are also some pretty dreadful beers being turned out as well.

Brewers of poor, or indifferent cask beer, get around this by charging rock-bottom prices, and it seems that there are pubs fully prepared to compromise in quality, so long as the price is right. It is equally true there are many drinkers content to drink such swill, because it suits their pockets, but is raising the price of cask beer, as several writers have suggested, the answer?

My thinking is that it would require a massive sea change in the way both the brewing industry and consumers think about beer, and in the current financial climate that’s just not going to happen. Peoples’ disposable incomes are usually finite, and whilst in the longer term some might be prepared to pay a little extra, it’s unlikely to be the £4+ premium that many commentators are demanding.

Now let’s say that some drinkers are prepared to pay more; especially when they’re getting a beer brewed from the finest floor-malted barely, and bittered with the finest aroma hops money can buy. If the beer is cask, WHO will guarantee that this carefully crafted dream pint will not be screwed up by careless handling, sloppy cellar practices, dirty lines (this applies equally to keg beers btw), or by being left on sale when it is obviously past its best.

The simple answer is that with cask beer you CANNOT guarantee this, and this was, still is and always will be the Achilles heel with so-called “real ale”. So good luck trying to tell someone that because cask is a “premium” product, you have to pay more for it; especially when that someone is on a limited budget, or is a pensioner or a worker on a low income, because it just won’t wash.

By insisting on charging substantially more for cask, because of the extra handling it receives, or because of allegedly superior ingredients, smacks of elitism in a manner akin to wine-snobbery. I fully accept that those brewers who do brew decent cask, and there are many of them around, deserve to be properly financially compensated for their efforts, and certain brewers may be able to get away with this. However, when other factors like wholesalers and the distribution chain in general are thrown into the equation, margins begin to get squeezed at other points, so if anything there are pressures on brewers to reduce prices rather than raise them.

For example, I don’t know how many people noticed that Enterprise Inns are pressing SIBA for a reduction of £3 per firkin for beers supplied by its members to Enterprise pubs. This come on top of a £5 a firkin reduction already “negotiated” back in November.

When large pub companies can apply this much clout, what chance is there of small “boutique” craft brewers getting a fair and honest price for their products? Talk therefore of charging a “premium” price for cask definitely remains as pie in the sky; as does talk of “educating the drinker about the value in paying more for his carefully-crafted  pint”.

I can see that suggestion going down really well at the Dog & Pheasant. Goodnight!

15 comments:

Curmudgeon said...

Plenty of good points in there, Paul.

Of course, in the early days of CAMRA, there was often an inverse relationship between price and beer quality. The best breweries were the cheapest.

And the Enterprise Inns situation is a strong argument for the revival of the tied house system. You're in a very vulnerable position if you're at the mercy of a small number of large purchasers.

Citra said...

I agree completely with your Wetherspoons and CAMRA thoughts Paul, as to the price of beer I am paying in general£3.80 a pint down in Hampshire and £4.00 for anything approaching 5% and beyond.Of course I can go to a JDW and pay considerably less but am prepared and do pay more to drink well kept beer in proper pubs with character and generally better and speedier service I find in large chain pubs.

Matt said...

There still isn't a direct correlation between beer quality and price, either in cheap beer always being awful or expensive beer uniformly wonderful.

Sam Smith's Old Brewery Bitter is £1.90 a pint in Stockport (having been until recently £1.80) and is still a decent pint. I'm also lucky that my local Wetherspoons is a former pub and still feels like one as well as having a manager who looks after his cellar and is in the GBG: one of the best pints I drank last year, Saltaire American Nut Brown Ale, was on there at under £2 a pint too.

retiredmartin.com said...

Spot on Paul. And Mudge. You only have to look at the Sam Smiths or Joules/Titanic models - well-run pubs serving one brewery's beer in good quantities, to see you can get a quality pint in pleasant surroundings for under £3 (£2 in Sam's, but they're an exceptional case !). Of course many commentators wouldn't consider Sam Smiths (or Titanic) as good beer.

As for the comment about Spoons and proper pubs, clearly buildings are more important than character imbued by people,let alone quality beer.

Paul Bailey said...

Both the beer and the pub industries seem to be in a state of flux at the moment, with many breweries starting to feel the pinch – much like their colleagues in the licensed trade. However, poor, or depressed trading conditions in the latter are bound to have a knock on effect in the former.

As you have pointed out previously Mudge, cask ale sales are suffering by being squeezed out at the high end (the “craft” sector), and disappearing altogether at the bottom end, particularly in traditional “working class” locals, which are mainly reliant on wet sales.

This latter sector is the one which is the most price sensitive, so talk of raising the price of cask here is only likely to spell its complete disappearance from all but the most dedicated of back street locals. Imposing a pricing model which may well work in chic-urbane craft beer bars shows a complete lack of understanding of the opposite end of the market, and there have been several well-publicised cases where such an approach has ended in abject failure.

The examples mentioned by both Matt and Martin show that well managed pubs, selling beers from just a single brewery; often the one they’re tied to, can be a runaway success. Definitely a case of horses for courses; rather than one size fitting all.

John Cryne said...

Well reasoned. On one of your points, I have been wondering for some time if we should test the Spoons vouchers offering by putting a Motion to Conference to end them. At least it will get a debate going. I am not against Spoons, indeed in the parts of London in which I live they are a life-saver. But a focus on benefits has created a different membership profile for CAMRA.

Curmudgeon said...

I have long felt a bit uneasy about the Spoons vouchers on the grounds that they potentially compromise CAMRA's independence. It would be nice to see them balanced by IFBB vouchers, but that's not going to happen.

I gave all of the current crop to Simon Everitt of BRAPA fame, so my conscience is clear ;-)

Paul Bailey said...

John, I seem to recall a Motion calling for the end of the Wetherspoon’s vouchers, being put to Conference at the 2010 Members Weekend on the Isle of Man. I also remember voting against it purely because I thought, at the time, that the vouchers were an important incentive to increase membership levels. The motion was defeated anyway.

Membership numbers have continued to rise, since that time but as you point out, people are joining, or renewing, primarily for the benefits (perceived or otherwise), rather than for what they can contribute towards the Campaign. The fact that CAMRA exists to improve the lot of beer drinkers and pub-goers alike, should be incentive enough; as should the Campaign’s track record over the years. Surely one active member is worth a minimum of ten inactive ones.

I appreciate that overall numbers ARE important too; especially when it comes to lobbying Parliament or trade bodies, but the overall make-up of the organisation is of equal importance, as is its independence and impartiality.

When viewed against these backgrounds, the downside of the Spoon’s vouchers becomes more and more apparent. For these reasons, if the same motion was put before the AGM again, I would vote in favour of it.

retiredmartin.com said...

On Wetherspoons, even without vouchers Spoons could offer discounts to CAMRA card-carriers to the same effect (some do). As could Punch, Enterprise, Greene King etc etc. Again, quite a few pubs already mirror Spoons offer. I don't see what the fuss is all about, though I don't actually see why CAMRA members should get cheaper prices than other folk anyway.

RedNev said...

I agree with most of what you say, including dismissing the frankly silly suggestion that CAMRA is responsible for beer prices being supposedly too low. I don't hear people complaining that petrol is too low at supermarkets, even though allegedly it is sometimes sold as a loss leader. There are no complaints about food prices being too low, or indeed about the prices anywhere else in the retail economy for that matter.

Who are these rich real ale drinkers who say "charge me more"? Wealthy beer snobs, for the most part who would like to see the the hoi poloi excluded from the élite activity that they want premium beer drinking to be. If you can't afford £5 a pint, they must be thinking, drink John Smith Smooth. The simple fact is that, if we went down the path of supposedly 'correct' prices, people simply wouldn't pay them, and as there aren't enough beer élitists to keep them open, there'd be a lot of brewery closures. So it's best to ignore them.

Prices are determined by a combination of production and transport costs and what the market will accept. Even now with record membership levels, CAMRA members still constitute only a small percentage of beer drinkers: our economic clout isn't great enough to influence beer prices significantly, if at all.

CAMRA membership benefits include:

Cotswold Outdoor - 10% off.
Cottages.com - 10% off.
Hoseasons - 10% off.
Various top UK attractions - up to 52% off.
National Express - 20% off.
Red Letter Days - 20% off all brewery tours and brew a beer days.
Beer Hawk - 10% off.
Wetherspoons - £20 in vouchers.

You can save a lot more than £20 a year by taking advantage of the other membership benefits, and yet nobody gets excited about those. Regrettably, I feel part of the problem is our old friend beer snobbery again. I know some CAMRA members who proudly declare that, not only do they destroy the vouchers (as is their right - and that's an extra £20 you've added to Tim Martin's profits), but also they never set foot in Wetherspoons.

If you don't want to use the vouchers, that's fine, but I don't see why I should lose the only CAMRA membership benefit that I take advantage of simply because you don't agree with them. That is a distinctly 'dog in the manger' attitude. Since I was compulsorily declared surplus from my job in 2008, I have been early retired. I'm not crying poverty, but my income is certainly much lower than those of you in the "scrap the vouchers" and "charge me £5 a pint" brigades. There are plenty of CAMRA members with considerably less money than me; why should they lose out to satisfy your principles?

I can also imagine how CAMRA would become a laughing stock if we collectively refused the vouchers. The media would have great fun pointing out that the beer drinkers' champion had told a pub company to charge them more for their beer - and make no mistake, that's exactly how it would be reported. Where would the campaign's credibility be then?

I might do what you've done Paul, and use this for a post on my own blog.

RedNev said...

Typing error: that should be hoi polloi!

Paul Bailey said...

I understand where you are coming from with the Wetherspoon’s vouchers Nev, and whilst I wouldn’t want to take away any benefit due to members (particularly one which helps people on low incomes or a pension – I’ll be drawing a pension myself in just over five years’ time), the vouchers do represent a conflict of interest for CAMRA.

Their continuance does leave the Campaign open to charges of cosying up to a large pub chain and, with many pubs struggling, the fact that Spoons are enticing CAMRA members into their outlets, does make a bit of a mockery of our support for community locals. Beer in Wetherspoon’s is already cheaper than in most other pubs, without the discount, so we are not doing our credibility much good over this.

I am not sure your statement, that those members who make great play of binning their vouchers, are effectively just handing Tim Martin £20 on a plate, is correct. The vouchers are bar-coded, so each time one is presented, as part payment for a pint, the bar staff have to scan them. Only then is the cash value debited against CAMRA, and I imagine this would probably only be done on a quarterly basis anyway.

CAMRA are not therefore just handing Wetherspoon’s a blank cheque, and any vouchers not used are, in effect, saving the Campaign money. As mentioned in my post, I normally don’t get through mine; not because of any dislike of JDW, or Mr Martin, it’s just that these days I probably have more breakfasts and coffees in Spoons than I do pints!

I wouldn’t expect to see a change any time soon; especially as the “Revitalisation Project” is likely to take up much of CAMRA’s time over the next 18 months or so. There are thus, many other things on the agenda which are probably of more importance to CAMRA as a whole, than the Spoon’s vouchers.

Curmudgeon said...

AIUI the vouchers are funded by Wetherspoon's as a promotional tool. CAMRA don't pay anything apart from, perhaps, the postage.

If you throw them away, you are only giving Tim Martin £20 on a plate if you are then going to buy 40 pints in Spoons at full price over the course of a year.

I've seen them for sale on eBay. It might be nice to have a scheme whereby you could donate them to charity.

I never used many of them anyway, as, while I do to Spoons from time to time, it's normally to take advantage of the meal deals against which they're not valid.

RedNev said...

"Only then is the cash value debited against CAMRA" - sorry, but that's factually wrong, Paul. CAMRA doesn't subsidise them at all, and doesn't gain or lose a penny whether you use them or not. Spoons pay for the ones that are used, and if you don't use them at all, their profit increases by £20. It is a straightforward member benefit like all the others, except the method is different - tokens instead of a percentage discount - so I fail to see how it compromises the Campaign. Or, if it does, surely all the others benefits do too.

If it's a problem specifically because it's beer-related, then how come no one says the same about the two other beer-related benefits: Beer Hawk and Red Letter Days?

Paul Bailey said...

Neville, the thread regarding the Wetherspoon’s vouchers was only a small part of my original post, but it seems to have acquired a life of its own. Irrespective of how the scheme is run, or who finances it, the Spoon’s vouchers are perceived by many in the trade as evidence of a far too cosy relationship between CAMRA and JDW.

I touched on the vouchers in the first place, because those arguing for cask to be treated as a “premium” product (and priced accordingly), were using this very factor as an example of why cask was too cheap, why certain brewers were unable to sell it at a profit, and why CAMRA was responsible for keeping cask prices artificially low.

My post set out to debunk this myth, and to explain why cask had historically, always been cheaper. The Wetherspoon’s vouchers didn’t exactly help my argument, which is why I threw them into the mix, and this is where the argument about them compromising CAMRA’s independence comes in. Again, I refer back to how the scheme is perceived by the rest of the licensed trade, and when you look at it in that particular light, it is very difficult to argue to the contrary.

If we were to go back to the days of the “Big Six” and the likes of Courage or Whitbread offered discount vouchers to CAMRA members, to entice them into their pubs, that would quite rightly have been seen as unfair competition, a bid to distort the market and a move to undermine the Campaign’s integrity and independence. Why should the JDW vouchers be viewed any differently?

I am not disputing that many members take advantage of the discount they offer, and no-one could blame them for using what is on offer. However, whilst I accept that the Beer Hawk and Red Letter offers are also beer-related benefits, and the principle is exactly the same; in terms of take up, I should think they pale into insignificance compared with the Spoon’s offer.

Finally, as I said in an earlier comment, given the far weightier matter of the “Revitalisation Project”, CAMRA are unlikely to drop the vouchers in the immediate future, and are certainly unlikely to take any notice of my views. As far as I am concerned the matter is now closed, and I would prefer that we agree to disagree. However, if any one still wants to continue the discussion, please go ahead and post although, unless what you say adds to the thread, don’t be surprised if I don’t respond.