Friday, 18 January 2013

Less is more ... for big business

Much has and will be written about the decision by Heineken to reduce the strength of its John Smith's Bitter ... maybe as part of the drinks industry's commitment to remove billions of units of alcohol from the UK market, maybe as a nod to responsible drinking ... what very few will highlight is that at the same time they will be increasing the wholesale price (not the price the consumer pays, but the price that retailer pay) by 2.5 pence.

2.5 pence is not a lot, but by the time the retailer (in most cases community pub operators), where the majority of John Smith's is sold, have factored in margin protection (i.e. they don't lose money by selling a more expensive product) and VAT this will translate to a 5p a pint increase.

So Heineken reduce their duty bill to the Treasury by £6.6 millions and increase their turnover to protect their financial position in the face of rising costs but in their own words will pass some of the duty savings on to customers ... I just wonder how much?

Like their beer or not this does reek of yet more immoral capitalism and as such should be condemned by publican and drinker alike, however, it will be the poor old publican who gets the blame for the price rise and who will be accused of profiteering as consumers remember the 2.5p headline price rise and the 5p price increase at the bar and wrongly assume the publican is trousering the difference.

In essence you get what you pay for be it beer or burgers, as we have seen in the media in the last couple of days too. If you want to drink less expensive beer then choosing a weaker beer is an option; if you want inexpensive burgers you buy "budget" or "everyday price" burgers that may contain horse and/or pig or other unidentified "beef filler".

The alternative for consumers is to realise that the days of cheap beer and cheap food are well and truly over, and choose quality over quantity. Choose a local brewer who brews and sells his or her beer within a small radius of where it is brewed. Choose a local butcher who uses farm assured meat from farms within a small radius of the butchery. Choose local cheeses from local cheese-makers, bread from local bakeries, choose local ... you will benefit from better quality, increased confidence in provenance, more robust community economies, increased local employment ... the list of benefits goes on.

Unfortunately for the majority of consumers price is the over-riding consideration in these days of austerity, which goes a long way to explaining why the likes of HMV and other high street retailers are disappearing. Perhaps pubs will prove to be the exception to the rule as it's impossible to buy the "pub experience" online and have it delivered to your door-step.


J Mark Dodds said...

Like what you've done with Publican Sam personal advice, tips and guides...

Would be good to have a chat, find out more. Fancy that?

Best, Mark

Publican Sam said...

Always happy to chat have emailed you with my number ...