Monday, 11 August 2014

Attacks on Progressive Beer Duty. Consumers, know your enemy

I have long held the suspicion that there are dark forces at work in many places in the brewing industry.

The three particular individuals who have been brave enough to say anything publicly about this are Jonathan Neame of the longest established family brewer Shepherd Neame, Stephen Pugh of long established family brewer Adnams and David Grant of Moorhouses.

In this article David Grant claims that the burgeoning number of breweries is stifling quality and innovation. He also accuses PBD recipients of using PBD to slash prices thus being unfair competition. 

This may well have been how he used it whilst he was in receipt of it, and there are a few people who do do that but for the most part they don't get very far or last very long because that isn't what the market wants. Would anyone who has been interested in the craft ale scene for the past few years recognise that declining quality and lack of innovation are a problem? Whose beers are we talking about here I wonder? Is it Magic Rock? Summer Wine? Mallinsons? Great Heck? Are Moorhouses beers seriously percieved as more innovative and of higher quality than those? And if so, by whom?

It seems obvious to me that the reverse is in fact true. We are involved in many beer festival orders and the number of un-servable cask ales at these events has plummeted over the past 5 years or so so that it is now and extremely rare event. As for stifled innovation, I can only assume David doesn't get out much.

Presumably Moorhouses are struggling to sell their huge volumes. A quick calculation based on the figures given in the article shows that their target average selling price per firkin is £56. Not rock bottom by any means but Mr Grant should see how much the innovative breweries can get for a firkin. 

Adnams are a bit different. The Adnams website has this article from Stephen Pugh. Unlike either Shepherd Neame or Moorhouses, Adnams are an innovative brewer and they have cleverly become one of the leading craft brewers in England and they are to be congratulated for that. A call for a reform of PBD in this case isn't because they don't understand the market. It's because they want to protect their long standing family property interests, just as I would in their position. 

It's perfectly rational for them but when I see a delegation of Adnams folk at SIBA conference a shiver runs down my spine.

Bloggers please bear in mind that however many free bottles of beer Adnams send you to blog about they spend money every year campaigning for your choice of breweries to be curtailed because they don't like the competition. If you're fine with that please carry on as you are.

Now we come to Jonathan Neame. He's the boss of Sheps and Chairman of the BBPA. Although I can now find no trace of it to provide you with a link, please take my word for the fact that Mr Neame recently appeared in print with his BBPA hat on attacking PBD as a barrier to consolidation in the business, yet in the Telegraph in 2005 he had said,

 "I think consolidation is unquestionably a threat as you need to look at your cost base but it's also an opportunity as there are fewer competitors."

Evidently now he thinks more of the opportunity bit than the threat bit. But of course as the boss of Britain's oldest independent brewery a pro-consolidation stance clearly only applies to other people. Otherwise why doesn't he sell out to Carlsberg for the good of the industry?

Here we have three individuals attacking PBD from slightly different angles but they all have one thing in common. They believe you have too much choice. They want to return to the days when breweries dictated market trends and take away power from the consumer.

The direction these people wish to take the brewing industry in is one where consolidation leads to uniformity and the elimination of everything except commodity beer. Sales will then be divided up between those who are privileged to be at the top table according to strokes of the pen in supermarket distribution and property deals on pubs.

Do you want that?

@greatheckbrew