By Ian Neubauer
The UK pub industry is in dire straits, with more than 1400 venues closing their doors last year and on-premise beer sales falling to their lowest point since the Great Depression.
The British Beer and Pub Association last week reported beer sales in 2007 fell 22 per cent on the previous 12 months, while total pub receipts were down 49 per cent for the period.
A multitude of factors has been attributed for the decline. Chief among them is a smoking ban that went into effect on July 1, 2007. A similar law was activated in NSW and Victoria on the same day that has hurt pubs and mauled the profitability of registered clubs.
Other factors taking blame include stiff competition from bottle shops and supermarkets, a greater preference for wine among young drinkers, an increasing focus on ‘binge drinking’ and an economic downturn that is expelling downward pressure on discretionary buying power and consumer confidence in the UK.
Pressure has also been rising for brewers, with InBev last week announcing it had no choice but to pass on rising energy and raw material costs to UK resellers in the form of a 3.3 per cent wholesale price rise.
However, UK daily New Statesmen points to the corporatisation of pubs by publicly listed companies or ‘PubCos’ more concerned with shareholder value than the preservation of pub culture.
“The PubCos are particularly single-minded, and if the returns from selling booze aren’t sky high they maintain shareholder value by selling off the premises,” the newspaper opined.
It said Pubcos sometimes deliberately run down pubs by hiring inexperienced or incompetent staff and charging extortionate rents to make the business unviable. This allows Pubcos to circumvent planning laws and win approval to redevelop properties for more lucrative purposes, such as luxury housing.
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