Dominic Midgley says a great institution of national life is under threat from the credit crunch, the smoking ban and cheap supermarket booze — but there are signs of hope
The sounds of merry-making could be heard from the street as 300 journalists, suppliers and associated hangers-on gathered at The Northcote pub in Clapham last month to toast the opening of Geronimo Inns’ latest outlet. Geronimo’s founder Rupert Clevely, the amiable former marketing director of Veuve Clicquot champagne, was on hand to dole out wine and press the flesh as he celebrated his sixth opening of the year.
All in all, it was like a scene from a film set in a happier world before the term ‘credit crunch’ had been invented. In fact, the British pub — an institution that can claim to date back to Roman times — is in deep crisis. As I write, pubs are closing at the rate of 2,500 a year, or 50 a week, buffeted as they are by the economic equivalent of a perfect storm brought on by tax and licensing changes, the smoking ban, the credit crunch, cheap booze in the supermarkets, and changes in our eating and drinking habits.
And that is something that should be of widespread concern because, apart from the fact that they are a much-loved feature of our national landscape, Britain’s 56,000 pubs employ 600,000 people and contribute an estimated £28 billion to the economy.
For the root of the current difficulties, however, we have to go back to 1989, to Margaret Thatcher’s ostensibly laudable decision to break the big brewers’ stranglehold on the pub sector. The likes of Guinness, Bass and Scottish & Newcastle — who banned their ‘tied houses’ from selling anything but their own beer brands — were forced to sell thousands of pubs in a bid to foster competition in the sector.
The result was the creation of a new breed of ‘PubCos’, set up by entrepreneurs with a nose for a bargain. The problem was that in order to create their portfolios of Red Lions and Nag’s Heads, they were forced to borrow heavily, often from private investors and, in some cases, from dodgy Icelandic banks.
In the good years, this did not appear to present a problem. But it did make them vulnerable to a change in the weather. And the weather changed with a vengeance at midnight on 1 July 2007. The Labour government’s ‘Smokefree’ legislation made it an offence punishable by a £50 fine to smoke in any enclosed public space. Overnight, this had a significant effect on pub revenues as smokers — statistically the heaviest drinkers — voted with their feet. It was a bitter blow to an industry that had been forced to spend £120 million in response to legislative changes brought in just two years earlier.
Then came the credit crunch. ‘By far the biggest factor is the economy,’ says Mark Hastings, director of communications at the British Beer and Pub Association (BBPA), whose members brew 98 per cent of the beer sold in Britain and own two thirds of our pubs. ‘Pubs were suffering but it has been made sharper by the recession. There has been a slow but inexorable escalation of costs and environmental pressures. When the economy is growing and money is coming through the tills, pubs can absorb [the extra costs] but when it goes south there is no featherbed to fall on.’
Hardest hit have been what the trade calls ‘urban community pubs’. These outlets, situated in the suburbs of big cities such as London, Birmingham and Manchester, have been closing at the fastest rate. Also suffering are high street pubs outside the main city centres.
Rupert Clevely remains upbeat, however: ‘The pub is still a very strong part of the national heritage and I don’t think that’s going to change,’ he says. ‘The reason [so many] are closing is because there are too many of them and they are not viable. You’ve got to remember that when many of them opened there weren’t coffee shops, brasseries and places like Carluccio’s. The only places you could go for a drink or a coffee were pubs.
‘But a lot of them were on a roundabout or in the middle of the countryside, or had no parking. They were not convenient to go to and not the sort of places that people wanted to go to. So things were going to have to change.’
The most convenient place to have a drink, of course, is at home, and the modern Englishman’s castle, with its central heating, designer furniture and satellite television, has never been a more attractive place. ‘When money is tight, the most economical option is staying in with a few cheap bottles of beer,’ says the Mark Hastings of the BBPA. ‘It’s a lifestyle choice. The pub used to be the community’s living room but over the years, people’s own living rooms have become much more pleasant.’
And bottled and canned beer has never been cheaper, which brings us to the threat from the supermarkets. Customers enter the likes of Tesco today to be confronted by cases of premium lagers such as Kronenburg and Stella Artois piled head-high and offered at temptingly discounted prices. While the government may wring its hands about excessive drinking among young people, its policies are in many ways part of the problem.
As Rob Hayward, chief executive of the BBPA, said in response to a beer duty increase in last year’s budget: ‘Government tax policy is fuelling Britain’s binge-drinking problem by driving people… out of the pub and into the arms of the deep discounting supermarkets.’
One of the few pieces of pub-friendly legislation the government has introduced in recent years is 24-hour licensing. It was billed as a high-minded attempt to change Britain’s antiquated licensing laws, with their roots in the Defence of the Realm Act of 1914, designed to limit the amount of time that workers on the home front could spend in the pub. The idea then was to ensure that people who worked in strategically vital sectors, such as munitions factories, were in a fit state to get up for work and didn’t get sozzled at lunchtime. The rules were eased in the 1980s to allow pubs to stay open in the afternoon, and relaxed still further four years ago when Tony Blair made it possible for publicans to apply for 24-hour licences.
The reward for our growing sophistication and maturity, we were told, would be ‘continental-style’ licensing laws, an expression that conjured up images of beautiful people lingering over a glass or two of prosecco at pavement tables as they watched the world go by.
The consequences of the change turned out to be rather uglier. Many pubs wanted longer opening hours for the very good reason that the extra time gave them an opportunity to sell more booze. Pictures of teenagers and twentysomethings plastered on alcopops soon became a regular fixture in the newspapers and a new scare was born: binge-drinking. The story turned full circle when Gordon Brown — his Presbyterian upbringing showing through — announced last week that councils would be given powers to revoke 24-hour licences.
So what is the solution? More publicans should embrace the zeitgeist and go gastro, according to Marco Pierre White, the chef who has probably done most to change the face of British cooking over the past 20 years. These days he counts among his interests the Yew Tree Inn in Highclere in Berkshire. ‘You’ve got to decide what your pub is,’ he says. ‘My pub is a restaurant that serves a pint, not a pub that serves grub. But it’s easier to turn a chef into a publican than it is to turn a publican into a chef.
‘At the Yew Tree I’ve got seven taps: five ales and two ciders. I don’t serve lager, and I don’t serve nuts and crisps. There are no fruit machines or juke boxes and I don’t have pool tables or condom machines in the loos. I’ve taken it back to being a 17th-century inn, where we greet, seat and serve. The Good Food Guide said: “Trust Marco Pierre White to create a near perfect roadside inn.” At my pub, sales are 40 per cent up on last year as a result.’
And what of the other man who is bucking the gloomy trend and bought six more pubs (from the Punch Taverns group) the other day? ‘I don’t think you need to be a posh pub to be successful — there are also many wet-led pubs that are doing extremely well — you just need to run a really good place,’ says Rupert Clevely. ‘I’m really, really upbeat about the future of the pub.’
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