Friday, May 27, 2011

Same problems, no answers: Parliamentary beer group misses the point

Hardly headline news today is an interview with the new chairman of the All Party Parliamentary Beer Group (APPBG), Andrew Griffiths MP (Con, Burton) in the publican's trade press.

In the interview with the Morning Advertiser (#1), Griffiths promised to 'give the industry more clout', before trotting out the tired old 'red tape and supermarket pricing' panacea which has been wheeled out by politicians speaking about pubs for the last decade.

Griffiths also announced that he was 'beefing up' the APPBG. His version of beefing up is, perhaps, a reflection of his years spent working as a policy wonk for the Conservatives, both at Westminster and Brussels: he has increased the number of vice-chairmen to 8 from the current 3. Beyond that, the interview seemed remarkably free of content, and while he describes an increase in vice-chairmen as an attempt to make the group 'more heavyweight', he fails to describe how having almost half the 20 member group fighting over seats at the top table will do this.

A more interesting guide as to how he will represent the industry can be found in the register of interests for the APPBG. Under 'Benefits received by group from sources outside parliament' on the House of Commons website (*2), in the last year it lists £4800 from each of the following: Enterprise Inns Plc, Greene King Plc, Diageo Plc, Heineken UK, Molson Coors Ltd, Mitchells & Butlers plc, Marstons plc, Punch Taverns plc, InBev UK and Carlsberg UK, with a further £2860 from SABMiller and £1787 from Admiral Taverns. In other words, it has received £53,000 from the largest breweries and pubco's in the UK.

So, when he said in his interview "Everything we do has to be about improving the profitability of breweries and pubs”, one wonders who he meant? The long suffering tenants of pubco's, who are constantly nailed to the floor by their landlords while being forced to buy overpriced beer on tie? The small brewers, who are shut out of the pubco's pubs because they can't get a distributio deal with the large breweries? Or, more likely, the pubco's and large breweries whose business model relies on misleading and mistreating tenants and who, coincidentally, fund the APPBG?

Tough if hackneyed words from Griffiths on 'supermarket pricing' are all very well, but do not accurately reflect the situation on the ground. It is not just supermarkets which price 1pt tins of Stella Artois at about 50p each, most corner shops do the same. This is not what parliament, pubco's and breweries like to pretend are 'loss leaders', sold at below cost: this is a clear result of brewery pricing structures. But, with the UK's largest breweries funding the group which is supposed to oversee them in parliament, what is the betting that we'll go on pretending that 'supermarket pricing' is a supermarket problem?

Lets face it. When I had my pubs back in 2008, I could buy - on tie, from the pubco - a 10 gallon keg of Stella Artois for £167 + VAT. I could buy the same keg, off tie, from a local distributor for around £110 + VAT. These are 80 pint, aluminium kegs, fully re-useable, for the bulk wholesale of beer. At the same time, I could buy 80 pints of Stella Artois, retail packed, in tins, boxes and trays, for £92 including VAT from Tesco. I could buy the same for about £4 more from Mr Patel's shop down the road, so this is not the large supermarkets selling at a loss to attract customers - Mr Patel could hardly afford to do that, could he? - this is a major difference in wholesale pricing which puts the pub trade at a disadvantage.

I flatly refuse to believe that it is cheaper to produce retail packed, non-recyclable tins than it is to fill an 80 pint re-useable keg. Be honest, common sense tells you that, doesn't it?

But now we come on to the nub of the problem. One would have thought that the pubco's would have an interest in keeping down the wholesale cost of beer, but nobody knows what the pubco's - who are the largest purchasers of it - actually pay. That said, if I can buy Stella for £57 a keg cheaper from an independent wholesaler than I can from the brewery, and the wholesaler is making a profit on that, then it is not unreasonable to assume that for the quantity Enterprise Inns or Punch Taverns purchase, the cost per keg is probably rather less than Tesco (or Mr Patel) pay for their retail packed beer.

It is this skewing of the open market which is causing the huge price differentials between supermarkets and pubs. The question is to what extent can a parliamentary group funded by the same pubco's and breweries which are making considerable profits from this outrageous price rigging be expected to come up with an honest solution?

Of course, we do have the trade press to fall back on, don't we? They, surely, will back up the independent operators, tenants and other licensees who don't enjoy such cosy closed shop relationships with the breweries, won't they?

One only had to flick through the pages of the Publican and Morning Advertiser a few years ago to see why this isn't true, and won't be at any stage in the near future. Page after page of glossy, full colour advertising extolling the virtues of the latest products from the very breweries which fund the APPBG. Features on how wonderful it is to be a Punch, Enterprise, Mitchell & Butler or Admiral Taverns tenant, alongside advertising from these giants in the pubco game.

The trade press might claim to represent the industry, but in reality it can't afford to upset its advertisers, particularly since they became reliant on advertising: they are free publications to the trade.

So, our new chairman of the APPBG and its 8 vice-chairmen have their work cut out. They are funded by the very companies whose closed shop operations ensure pubs are priced out of the market, and informed by a trade press which is in the pocket of those same large corporates. Where, in all of this, is the voice of the small businessman, the publican who since the banning of smoking in pubs has seen their profits continuously squeezed by all of the above? If you spot the group which will speak up for them, by all means let me know.


Wednesday, May 25, 2011

Campbell Bannerman, and all that's wrong with politics

Whatever the rights and wrongs of Bannerman's self-aggrandizing explanation for his defection to the Tories, there was one little piece which was missing. When selected as an MEP candidate, he signed a declaration which clearly said:

"Our MEPs will be expected to… remain as members of UKIP for the full 5-year term or otherwise retire from the Parliament"
Now, I accept that such a declaration may not have any legal force, and the courts may well view such an undertaking as being unenforcable. But haven't we heard all this before? The MPs who fleeced taxpayers with dodgy expenses were working 'within the rules', but such a defence hardly lead to public acceptance of their case.

The simple reality is that some things are clearly right, and some things are clearly wrong. If you sign such a declaration, you do so knowing what it means and, one would hope, with an intention of sticking by it voluntarily. To break such an undertaking on the grounds that it may be legally unenforceable is no different to the weasel words used by David Camoron to excuse the Tory's ditching of his 'cast-iron pledge' to hold a referendum on the Lisbon Treaty.

David has said he's received no promises other than to be treated the same as any other Conservative MEP. In other words, he is guaranteed selection on the Conservative list for the next Euro elections in 2014: and with a very good chance of re-election in his new Tory clothes, with the likely retirement of 66 year old (ie 69 in 2014) europhile Geoffrey Van Order and his europhile conservative colleague, Robert Sturdy, who will be 70: UKIP can take an extra seat or two, and DCB'll still be in. Doubtless, it won't have escaped the Tories notice as to how useful it is to have a former UKIP MEP to boost their own faltering Eurosceptic credentials amongst their party faithful either.

Which brings me to the title of this post, or at least a part of it: all that's wrong with politics. The defection of a minor politician may be a small thing when viewed in the context of the worlds problems, but didn't we constantly hear during the MPs expenses scandal that it was all 'within the rules'? Does anyone reading this think that that is an acceptable defence?

The point is simple. Those who seek election by their peers - and certainly those who've been elected - should be prepared to not just follow the law of the land, but to hold themselves up to a higher standard. I've just finished reading a novel by Philip Kerr, and one phrase from it sticks in my mind: "We gave the people of whom more was expected severer sentences when they turned out to be crooks. Lawyers, policemen, politicians, people in positions of responsibility. They're the crooks who should know better."

When politicians have their next outpouring of angst, wringing their hands and wondering why the public don't hold them in the respect they feel they deserve, think of Campbell Bannerman. The Tories are as much at fault in this as he: they know, of course, of the existence of the undertaking, and aren't much interested in what he said previously, or whether, in defecting, he is proving that his word is worth little, if anything. Rather than forcing him to stand by his earlier committment, they are happy to take him because it helps in the game of party politics, the pastime of climbing the greasy pole which keeps the idiots in charge of our nation at the top. That is what's wrong with politics and politicians. Shame on David, for proving that his word is not his bond, and even more shame on the Tories, for simply failing to do what's right by accepting him.