What's Killing the Great British Pub?

WHAT'S KILLING THE GREAT BRITISH PUB? It's no secret that Great Britain's pubs have been in decline for many years now, with numbers dwindling more and more as times goes on. NUMBER OF PUBS IN THE UK 60,000 50,000 40,000 30,000 20,000 10,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20% THERE WERE 11 PUB CLOSURES PER WEEK IN 2014 DECREASE IN THE NUMBER OF PUBS SINCE 2004 2004 2014 - CLOSED But what is the reason behind the pub's struggle to survive? Who is responsible for the decline of the British pub? 1 THE SMOKING BAN The smoking ban came into force across the UK between 2006 and 2007. Many people blame the decline of the British pub on the smoking ban, but what evidence is there? 70,000 60,000 50,000 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 10 '11 '12 '13 '14 The number of pubs fell drastically immediately after the smoking ban came into action. However, it could be said that the rate of closure began to accelerate just before the smoking ban. Before the smoking ban was officially rolled out, pub chain JD Wetherspoons conducted a pre-ban experiment, in which they designated some of their pubs as strictly non-smoking. These pubs saw losses across the following areas: REVENUE PROFIT FRUIT MACHINES ALCOHOL SALES 7.6% 20% 25% 17% BEER TAX PRICE PER PINT CHANGE AVERAGE SALARY CHANGE 10% 8% 6% 70% 4% OF THE 2% PRICE OF A PINT IS TAX 0% 2002-03 2003-04 2004-05 2005-06 2006-07 2009-10 2010-11 2011-12 2007-08 2008-09 2012-13 Year-on-year, the increase in the price of a pint rarely correlates with the increase of the average UK salary. This could mean that the reason people are spending less money in pubs is because they can't afford to. PRICE PER PINT PRICE - TAX £3.50 £3.00 £2.50 £2.00 £1.50 £1.00 *02 '03 '04 '05 '06 '07 '08 '09 10 11 12 '13 14 There is a strong correlation between the price of a pint and tax increases, suggesting that tax could be the main factor in driving beer prices higher, making it unaffordable for many. DUTY CHANGE BEER SALES CHANGE 10% 8% 6% 4% 2% 0% -2% -4% -6% 2002-03 When alcohol duty increases, beer sales decrease. 2013 saw the proposed increase 2012-13 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2013-14 in alcohol duty axed, and beer sales dramatically increased as a result. This clear correlation suggests that tax on beer has a direct effect on sales. On average, a pub pays £107,000 per year in tax 3 THE 'BEER TIE' When a pub is owned by a pub-owning-company (pubco), it is considered to be in a beer tie. Usually beer ties force pub owners to buy alcohol solely from the pubco, at inflated prices. PUBCO INDEPENDENT CHAIN HAAAH AAAA HAAH Over 50% of all UK pubs are owned by pubcos. Tied pubs pay an average of £140 for an 88-pint barrel, a freehouse will pay around £80 £80 £140 46% of tied pub owners earn less than £15,000 per year compared to only 22% of non-tied TIED PUBS NON-TIED 46% 22% Are pubs closing because they can't afford to be beertied? 4 THE SUPERMARKET It's no secret that alcohol is much cheaper in supermarkets than it is in pubs. This may be causing some Brits to shun their local pubs in favour of drinking at home, in an effort to save money. SUPERMARKET PUB Since 2002, beer prices fell 7% in supermarkets, rose 24% in pubs £3.20 +24% SUPERMARKETS -7% PUBS £0.30 AVERAGE PRICE OF A PINT One of the main reasons for the price difference is that supermarkets do not have to pay the same VAT rates on food as pubs, and use this to subsidise their cheap alcohol prices. Many supermarkets actually make a loss on their alcohol and use it to drive other grocery shopping. PRICE (20% TAX) KILK MILK PRICE (NO TAX) £0 £1 £2 £3 £4 £5 £6 £7 £8 £9 £10 If supermarkets were subject to the same food tax as pubs, basic items alone could add over £300 pounds to the annual amount spent on food shopping. There has been a 47% increase in the number of people binge drinking in recent years. This may suggest that drinkers are 47% abusing the cheap supermarket prices instead of drinking more responsibly in pubs. CHAIN P UBS Despite chain pubs being subject to the same tax as all pubs, they have the advantage of being able to negotiate better deals from breweries and distributors. AVERAGE PINT PRICE CHAIN PUE £4.00 £3.50 £3.00 £2.50 £2.00 £1.50 £1.00 £0.50 £0.00 CAMBRIDGE LONDON OXFORD YORKSHIRE Chain pubs are able to offer customers prices that smaller pubs are unable to compete with. One major chain pub opened 50 new pubs in 6 months, while almost 800 pubs closed nationwide. OPEN CLOSED The Verdict There is strong evidence to suggest that it may not be just one culprit that is responsible for the demise of the British pub. Ultimately, it is most likely a combination of all of the above that is creating an environment difficult for the pub to survive in. How You Can Save Your Local The British pub is not dead just yet, and there is still time to save it. Show support - drink and eat in your local pub more often, attend events such as quiz nights, and create new customers by taking friends and family there. Raise awareness - get the local community involved, rally them in to action, and let it be known that your pub could be under threat of closure. Start a campaign - write to MPs, start a petition, and show how important your local is to you. SOURCES www.theguardian.com/news/datablog/2010/apr/12/general-election-labour-manifesto-pub-closures www.thecaterer.com/articles/53051/number-of-pubs-in-the-uk-industry-datal https://fullfact.org/live/2014/jun/28_pub_closing_week-32941 http://www.thecommentator.com/article/2445/biased_bbc_curious_case_of_the_forgotten_smoking_ban/page/2 www.beerandpub.com/statistics Office for National Statistics http://www.theguardian.com/news/datablog/2010/apr/12/general-election-labour-manifesto-pub-closures http://www.parliament.uk/business/publications/research/briefing-papers/SNO6740/pub-companies-pub-tenants-pub-closures http://www.iea.org uk/blog/is-the-smoking-ban-to-blame-for-the-high-rate-of-pub-closures 2008 Good beer guide http://www.hscic.gov.uk/catalogue/PUB10932/alc-eng-2013-rep.pdf http://www.hscic.gov.uk/catalogue/PUBO0110/alco-eng-2008-rep.pdf Produced by make it cheaper HHH KI HHH KI