Tuesday, 18 December 2012

Take out food ...



A recent article in the Telegraph's food section enjoins us all to make gifts for our loved ones this Christmas and it got me to thinking that this would be a great little USP for food-led pubs that:

a) want to ensure kitchen wastage is kept to a minimum
b) want to give their customers a taste of the pub kitchen to take home
c) buy into the concepts of seasonality, provenance, sustainability and localism
d) create a buzz and help build customer retention
e) is an all year round promotion

"And how, pray, do you achieve that?" I hear you ask. Well as it happens, the Telegraph article, suggests one of the first things I was trusted to make in the first kitchen I worked in … Chicken Liver Parfait.

I've long since lost the original recipe that I must have followed but I can happily recommend the recipe in the article … although, many of you will have your own.

The fantastic thing about the idea is that you can batch cook a large amount of this perennial favourite and reserve some for "off-sale". The parfait jars (a la Kilner style) are readily available from Leparfait who're quite happy to discuss bulk-purchasing deals that will save you.

I'll leave the pricing and GP% you want to achieve to you … but the key thing to price in is the cost of the jar (and the "gussying-up" /labelling) … whilst this would ordinarily make the product too pricy you can mitigate against this by charging a deposit (equivalent to the cost of the jar), which, should the customer return it they can redeem. At this point you have the potential to offer a re-fill or maybe some other goody such as your home-made, locally sourced, chutney or caramelised red onion jam … get the drift?

The USP can be adapted throughout the year as you use your seasonal food menu to inspire your next potted offering …  

Sunday, 16 December 2012

The merits of beer ...

In Jared Brown's brief history of the cocktail in the Telegraph he reminds us thus:

William Hogarth etched “Gin Lane”, in 1751, portraying the deprivations of the inebriated poor. Though this would become an enduring propaganda piece for the temperance movement, it first appeared as one of a pair of etchings. “Gin Lane” demonstrated the destruction wrought upon society by mother's ruin. Its companion, “Beer Street”, illustrated a nation made healthy (morbid obesity was considered a sign of health) by beer.

The original caption for “Gin Lane” warned:
 
Gin, cursed Fiend, with Fury fraught,
Makes human Race a Prey.
It enters by a deadly Draught~
And steals our Life away.

Virtue and Truth, driv'n to Despair
Its Rage compells to fly,
But cherishes with hellish Care
Theft, Murder, Perjury.

Damned Cup! that on the Vitals preys
That liquid Fire contains,
Which Madness to the heart conveys,
And rolls it thro' the Veins.


 While the caption for “Beer Street” praised:
 
Beer, happy Produce of our Isle
Can sinewy Strength impart,
And wearied with Fatigue and Toil
Can cheer each manly Heart.

Labour and Art upheld by Thee
Successfully advance,
We quaff Thy balmy Juice with Glee
And Water leave to France.

Genius of Health, thy grateful Taste
Rivals the Cup of Jove,
And warms each English generous Breast
With Liberty and Love!
 Not a lot to add to that ... just about says it all

Friday, 14 December 2012

2013 The Year of the Pub

I've just about had a guts full of the procrastination of so called "industry leaders" and hereby declare ...


Friday, 7 December 2012

Why isn't the pub trade a career of choice?


Earlier this year, the pub trade press reported on research (by livebookings.com) that shows our much loved industry wouldn't be the choice of career for 43% of young people. A pretty depressing headline statistic, but as with all statistics, and journalism it's all about the spin. The headline could have run as something along the line of "Pub Trade still the career of choice for 57% of young people".

Of course this would be too simplistic, as one has no idea how many of those who didn't actively discount the idea of a career in hospitality would express a clear preference for a career in the industry. However, there must still be a fair proportion who would or might consider this career path. (I have asked them to share the full, non-commercially sensitive parts of their research, but to no avail at the time of writing). The important question for our industry is, how do we change many of the perceived attitudes to our industry - often reported as low paid, long hours, menial, boring and repetitive? These aren't just perceptions of those employed in the pub trade, but also those too readily expressed by its customers in their attitudes toward 'front-line' industry members in the form of abuse and insult that we've probably all experienced at some time in our careers.

For a long time the British Institute of Innkeeping has led the effort to present our industry as one of an exciting and professional sector, full of opportunity and personal development. The BII's much vaunted Apprenticeship Scheme is a prime example being trumpeted as a way of engaging young people in a professional career in the industry. Noble sentiments to be sure, but the reality for many in the industry, especially in "team member" roles (i.e. non-managerial) is more akin to the perceptions expressed in the research. Whilst the publicly quoted headline stats may only show part of the picture, one cannot help but think that perhaps we as an industry could do more to promote ourselves as a worthwhile career choice.

Over the years I have encountered many ill-informed and 'untrained' publicans whose idea of career development was little more than teaching a barperson how to pour a decent pint and bottle-up. Over that same period I have employed many who have only ever seen a job in a pub or kitchen as a filler in their desired career path and who have not wanted to progress.

Too often, in the relentless pursuit of profit, both companies and owner-operators neglect the need for meaningful, quality training both for the employees of the former and latterly for themselves. "Train To Gain" isn't just a mantra to increase profitability it's a sure fire formula to increase the professionalism, safety and standing of many team and management roles from the merely menial to that of professional competency.

Apart from getting the bare minimum under their belts, e,g, the training required to gain a Personal Licence, how many publicans (let alone their staff) also go on to undertake the training required under the law to run a lawful business? The BII make much of their Pre Entry Awareness Training (PEAT) for potential tenants and lessees but once this and licensing training has been completed the progression to other levels of competency are almost relegate to the status of "optional extras".

I've got a memorable new acronym for the industry, one that would benefit not only prospective tenants and lessees, but also freeholders, managers and all staff: 

P.E.R.T. Pre Entry Regulatory Training. 

(It's a bit sexier than compliance training eh?)

PERT would take both team members and managers through the four main areas required by legislation and regulations to run a safe and hygienic business. The four elements of PERT are: Emergency First Aid At Work, Manual Handling, Fire Marshall and at least Level 2 Food Safety.

I would venture to say that relatively few members of the industry have all four of these under their belt, yet they are all the basics required to run a hospitality business. Things have come a long way in another quasi-hospitality industry, that of commercial aviation, from where the cabin crew were perceived as mere "trolly dollies" to being a professional and rigorously trained team of air-borne servers, first aiders and safety officers. Perhaps it's time for the pub trade to 'reach for the skies' and elevate our bar-maids, cellar-boys and Al Murray stereotypes into professionally recognised and more importantly publicly recognised career professionals. Maybe then we can become more attractive to the next set of managers and entrepreneurs.

Customer service ... important now more than ever ...

See the latest market research into Customer Service shortfalls and their consequences on the Market Intelligence Report page ...

Finally an excuse for "binge drinking" ...

http://www.howtorunapub.co.ukAccording to Agence France ... 

"Consuming large quantities of a key ingredient in beer can protect against winter sniffles and even some serious illnesses in small children, a Japanese brewery said citing a scientific study.
A chemical compound in hops, the plant brewers use to give beer its bitter taste, provides an effective guard against a virus that can cause severe forms of pneumonia and bronchitis in youngsters, Sapporo Breweries said Wednesday.
In research with scientists at Sapporo Medical University, the compound — humulone — was found to be effective in curbing the respiratory syncytial (RS) virus, said the company, which funded the study.
"The RS virus can cause serious pneumonia and breathing difficulties for infants and toddlers, but no vaccination is available at the moment to contain it," said Jun Fuchimoto, a researcher from the company.
The virus tends to spread in winter and can also cause cold-like symptoms in adults.
Fuchimoto said such small quantities of humulone were present in beer that someone would have to drink around 30 cans, each of 350 millilitres (12 oz), for it to have any virus-fighting effect.
"We are now studying the feasibility of applying humulone to food or non-alcoholic products," he said. "The challenge really is that the bitter taste is going to be difficult for children."
The research also found that humulone alleviated inflammation caused by infection from the virus, the brewery said."
 Somehow I don't this will wash with the anti-alcohol brigade ...

Thursday, 6 December 2012

Smoke and Mirrors ... Solihull Style ...

http://www.howtorunapub.co.uk/bootcamps
Rob Wilcock, esteemed editor of the Publican's Morning Advertiser challenged Ted Tuppen to back up his comments that the average Enterprise tenant earns £45,000 a year ... you can see TT's analysis,  the PMA headline, summary and link below:

Enterprise Inns caused much derision and some cynical comments on the PMA’s online forum when it announced last month that the average Enterprise licensee achieves a profit of £45,000 a year (including a £10,000 estimate of the value of accommodation), while Enterprise gains an income of £67,000 and the Treasury takes a whopping £145,000"

As you say, Rob, the figures come from Enterprise. No doubt the methodology of extrapolating figures from their own shadow profit and loss model for prospective tenants and then claiming these as "average" across the estate may well come up with tenant profit at £45,000. As I have posted before using average is not generally very helpful, median or mode values are more meaningful in the real world.

You are also right to point out the trends ... but I have to seriously question whether increases in turnover can be attributed to pub disposals ... maybe on the capital investment front, although I should imagine a significant proportion of this would have been on remedial works to keep Enterprise's oft crumbling pubs open. More likely increased turnover is directly attributable to tenants having to increase prices to keep match with increased supply prices due to the increases in duty and VAT.

A more rigorous approach to comparative figures is to use the earlier figures as a base and to calculate the later figures net of inflationary pressures and then see if there have been changes to the tenant/landlord equation. Perhaps the £9,000 benefit to tenants in the last year is not quite as generous as it would seem.

One cannot dispute rent rolls as published in company accounts so I am gratified to see Enterprise adapting a more reasonable approach to rental values over the four years nor can one dispute the essential tenet of Tuppen's analysis that the Treasury is the biggest beneficiary from the average pub. However I think it is somewhat disingenuous of Tuppen to claim that his (and his company's) critics are either "ill-informed" who have neither the wit nor ability to apply "genuine analytical rigour" to the "self-interested nonsene spouted by a handful of campaigners". Would these "unprofessional" campaigners include highly respected and successful figures in the industry and the entire BISC? Probably.

But my most serious opprobrium has to be for Tuppen's bare-faced cheek in claiming to be the model of virtue by jumping on the "responsible UK-based tax paying company" bandwagon... like his tenants aren't!

If the evidence to BISC that 67% of tied tenants earn less than £15,000 is taken as true and by using Ted's reckonings, then none of them can be Enterprise tenants and must all be tenants of the other pubcos and brewers.

My verdict in this "trial by hearsay and innuendo" ? That Tuppen made some inadvisable comments and his management team, knowing perhaps a little more about life in the real world of the Enterprise estate, advised him to do some back-tracking and the best way is to wrap it all up in estimates and more importantly distract our attention from the inequality of divisible profit by some crafty legerdemain and putting all the blame on the Treasury.

Nice try Ted ...

Monday, 3 December 2012

Taste of the Nation ...

Deloitte's excellent Taste of the Nation six-monthly snapshot of 3,000 UK consumers is out ... to save you wading through it all, I've done 3 precis for you on the Market Intelligence Report page ...

Friday, 30 November 2012

Machine Game Duty

Don't forget you only have until 11/1/13 to register for Machine Game Duty ... "what the hell is that?" certainly seems to be the most commons response as it is reported in the Publicans' Morning Advertiser that 99% of premises with games machines have yet to register.



Click on me to find out more ...

Thursday, 29 November 2012

Nostradamus ... or ... Cassandra ?



Around this time of year the media is full of various predictions of what will be "big" in the hospitality industry. To save you time I have trawled through over 30 different reports and noted what seems to be the most agreed upon trends we in the pub trade should be paying attention to … so check the latest Market Intelligence Reports page ...

Wednesday, 28 November 2012

Advice to customers ...

Just for a little bit of fun, in these times of austerity, minimum pricing, beer duty escalators etc ... hopefully it will remind us of why we are in the pub trade ... banter and a sense of humour ... if you want to read a fantastically evocative eligy to the great British pub then head over to Tandleman's blog (who by the way has just celebrated his 1,000th post ... congratulations) ... Tandleman captures, perfectly, the quiet joy of pub life.

Cobbled together from various sources ...

Friday, 23 November 2012

Wednesday, 21 November 2012

Lies, damned lies ... and well, just lies ...

As all you men out there will know it's a statistically proven fact that ManFlu is 20 times worse than WomanFlu (there are statistics to prove it here at Nursing Voices a global nursing forum) ... a fact to which I can currently attest as I shiver and shake on the verge of death ... so you'll excuse me if I'm brief about my disdain and disbelief about the raft of "statistical information" currently being bandied about by the neo-prohibitionists at Alcohol Concern and their myriad ranks of supporters in the 'health industry'.

For a long time now I and others have been high-lighting the inconsistencies in the arguments of the anti-drink lobby but this years Alcohol Awareness Week brings a truly unbelievable slew of 'facts' and figures to support their hysteria.

So if you want to see some of the counter-arguments then I suggest you head over to Pete Brown's Beer Blog and Phil Mellow's Politics of Drinking for some considered analysis of Alcohol Concern's outrageous calumnies.

If you search this blog for my musings on this subject you will see that Alcohol Concern is not alone in its distortion of the truth ...use the search button and look for alcohol concern ...

As for me? Well it may be relatively early in the day to imbibe, but I am going to supplement my Carlsberg Beecham's Cold  & Flu powder with a hefty shot of whisky and retire to my death-bed. If by some miracle I survive my bout of ManFlu I shall resume normal service shortly ... if not, send lilies.

For more factual information about ManFlu check out this highly respected health information site.

Saturday, 17 November 2012

How To Be A Tax Avoider...or how I learned to love Amazon, Starbucks, et al ...



Recently I ran a call to action to answer the Treasury's rejection of any review of the beer duty escalator under the image of a ballot box with the tagline "If you can't join them …"

Today, I think I will revert to the more traditional "If you can't beat them, join them…"

Accordingly, I am pleased to announce the formation of The Perfect Pint Company ™. As you will see from the articles of incorporation (to follow shortly) The Perfect Pint Company ™ is based in Luxembourg, where it's highly dedicated staff (of one … me) will provide every independent pub operator in the country with a unique franchise offering.

The franchise will consist of a single piece of intellectual property, to wit, the way to pour and serve the perfect pint (pictured right). In return for the modest fee of 100% of all your takings The Perfect Pint Company ™ will provide you with a handy, easy to use portable diagram and instructions on how to serve and pour the perfect pint and more importantly will undertake to "fulfil" all your customer orders. You will only "deliver the product" to your customers.

Having received your total income, we will provide the invaluable service and management advice contained in The Perfect Pint Company ™ instruction card at the very reasonable cost to The Perfect Pint Company ™ of 99% of your turnover to cover the "cost of product sales and other ongoing costs related to the operations of the company".

The Perfect Pint Company ™ will then pay tax on the 1% of your turnover to the Luxembourg government. By means of a reciprocal licensing fee The Perfect Pint Company ™ will remit to you all monies required to operate your business and fulfil your VAT and PAYE liabilities. The Perfect Pint Company ™ will pay the shareholders of The Perfect Pint Company ™ a dividend on which 10% income tax can be levied in the UK. (You should note that dividends under £35,000 are eligible for a 10% tax credit … so you'll in effect not pay any tax on this income).

The shareholders of The Perfect Pint Company ™ will, of course, be you the franchisees. As your UK based "economic activity" units (your pubs) will be making an operating loss, your UK based pub business will not be subject to corporation tax so you can quite legitimately trouser the difference.

Application forms for potential franchisees can be obtained from The Perfect Pint Company ™ SARL, 13 Rue de la Boucherie, 1066, Luxembourg. Alternatively if you are visiting Luxembourg, call in and collect your franchise pack in person … just knock on the door and say "The one-breasted coffee vendor sent me …" 

(p.s. Brewers will be able to buy their hops from our Swiss domiciled subsidiary at a very reasonable 200% mark-up ...)

Tuesday, 13 November 2012

Market Intelligence Reports

Some of you will know that I have recently discovered "infographics" and used them in the spirit of " a picture paints a thousand words" ... I've now added a new page to store those (and other reports) that I think may be of interest to those running pubs ... hope you find them useful.

You say tomatoes, I say tomatoes ...

OK ... so I said I wouldn't be doing too many picture posts ... but in light of the Public Accounts Committee grilling of tax-avoiding companies Starbucks, Amazon and Google yesterday ...

Please feel free to use it as you will ...

In the interest of fairness, however, I would point out that Margaret Hodge (Chair of the Committee) must have some major "cojones" if this Telegraph story is to be believed

All you publicans and brewers out there must be wondering WTF is going on in this country when HMRC and HMG are intent on going after the little guy (and gal) when the big boys are getting away with such blatant and immoral tax evasion avoidance ... the "come the revolution" line is growing by the day and must now include not only bankers, but also their 'partners in crime' in the big accountancy firms. Don't you just love the new HMRC adverts?

But closing in on whom?



With reports that the Treasury is facing a £48 billion "black hole" in its books that will require another £22 billion of tax increases or spending cuts in the next spending round, surely it's time HMG sorted this mess out and we had an equitable tax regime where all individuals and businesses paid a "just amount" of tax and contribute proportionally to the societies where their economic activity occurs (pubs and brewers paid a combined £11 billions in duty, tax, VAT, national insurance last year alone) and more importantly inculcate a moral climate where it is seen as the right thing to do to pay one's way and not a jolly wheeze to think of ever more intricate ways to cheat the public purse of one's fair share. Perhaps, and only then, will we feel "we're all in this together".

Monday, 12 November 2012

Quis custodiet ipsos custodes?

You decide ...
Well this is probably a first, me using my almost long-forgotten schoolboy Latin. So, far from being of no use as I would continually harangue Mr Moore (my Latin master), it has come in handy this week. In essence, and at the risk of being corrected by pedants and Latin scholars, "who will watch the watchmen?".

Essentially the current administration of Eton educated Latin scholars has asked this question and come to the conclusion that we, the plebian proletariat, should decide who should watch the watchmen, which is why we are all expected to troop off to the polling station this Thursday (November 15th) to cast our ballots to elect our own Police and Crime Commissioners (PCC)... 37 of them across England and 4 in Wales.

Some may say that this will make the police more accountable and will further democratise one of our public services, namely the police, as unelected Police Authorities will be replaced by a PCC, Others will argue that we run the risk of further politicising the police and their activities and replace a committee of well informed, well intentioned Police Authority members with great experience and breadth of knowledge of crime and how it affects our respective areas with a PCC who doesn't have to have any experience of policing as a prerequisite of candidacy. Whichever view you subscribe to, these elections are upon us and it behoves us in the pub trade to find out who our local candidates are, what they are promising in their election manifestos and consider what will happen to local policing under their authority. 

The government assures us PCCs will have no operational control of our police forces especially in terms of where the diminishing resource of front-line officers will be deployed and what the priorities of those officers will be in the execution of their duties. My fear, and this is a fear shared by many discussing this issue in the media, is that they will; if not by the very dint of being able to hire and fire Chief Constables and oversee police budgets. One can easily imagine a PCC suggesting a Chief Constable immediately puts resources to a perceived problem that the PCC has become exercised about and the Chief Constable resisting this instruction. Result? The PCC sacks the Chief Constable and replaces that officer with one that will do their bidding. Far-fetched? Not really, the Mayor of London has for many years been London's PCC and the current incumbent has already sacked one Metropolitan Police Commissioner... Sir Ian Blair

If you recall Sir Ian's three and a half years in post were plagued by questions about his judgement, leadership credentials and 'politically correct' style of policing. His last months in office were bogged down in unprecedented controversy and in-fighting after he was accused of racism by a series of ethnic minority officers, including the country's top Asian policeman Tarique Ghaffur. It resulted in the upper ranks of the Met being plunged into a virtual state of paralysis, with officers regarding Sir Ian as a lame duck chief no longer in charge of his force. He was forced to eventually resign after a bitter (and very public) showdown with the Tory Mayor of London, Boris Johnson, who said he had no confidence in him, the first time in modern history a Met Commissioner has been as good as sacked.

Is this a scenario we want played out across the country? Well, in some respects, it's too late, the change is upon us, but there is still just a little time to influence the choice of whom we are all going to get. So find out what your local candidate is proposing, think about how it's going to affect your business and your customers and above all make sure you vote. Despite the old anarchist graffito of "It doesn't matter who you vote for, they always get in" ... it does matter and if you get an anti-pub commissioner elected in your area you'll soon know about it. You think late night levies will remain the province of city and town centre pubs only? You think that pub closure orders by the police won't be used by hysterical PCCs in response to health lobbyists and neoprohibitionists? You think that scarce resources won't be deployed only in areas where the most votes for the PCC were cast (or come re-election time might be cast)?

We get precious few opportunities to exercise our democratic right in this country and it would be a shame to squander this one ... if nothing else it'll get you out of the pub for half an hour and who knows you might get a PCC that understands the invaluable role that pubs play in the social cohesion of the communities that both they and the police serve.

Monday, 5 November 2012

Damn and Blast 'em ...

999 WHAT'S YOUR EVIDENCE?
Another of my guilty pleasures is the documentary series on Channel 4 ...  "999 what’s your emergency ?" and having just watched episode 7 I was quite shocked at some assertions the makers of the film Blast Film Productions make regarding alcohol. I have written to them to ask which studies / statistics they base the following statements on at the end of the programme:
  1. Drink is a major factor in 50% of all crime
  2. It (drink) costs the NHS £2.7 billion a year
  3. 1 in 8 of the adults who die before the age of 64 do so because they have abused alcohol
Their response should make interesting reading ...

(If you'd like to ask them to: blast@blastfilms.co.uk)

Update ... 26/11/12 ... quelle surprise! No answer ...

Sunday, 4 November 2012

"... you get monkeys"



Today marks the beginning of Living Wage Week 2012, which, will encourage employers throughout the country to bring the poorest paid workers to a pay level above that of the national minimum wage.

For hundreds of thousands of employees currently 'enjoying' the minimum wage of £6.19 this would mean an extra £1.26 (outside London)… not a huge amount, but for those subsisting on what the Labour party call "poverty wages" it will make an enormous difference.

The catering and hospitality industries have been notorious for too long as a low paid sector and in these difficult times of escalating rents and beer duties, increasing commodity and energy prices and the added burden of auto-enrolled pension schemes (which will add 3% to payroll) for some small businesses it may prove to be impossible to implement, but I would urge those that can to do so. Here's a sobering (and shaming) figure for you ... 85% of pub staff in the UK are paid less than the Living Wage.

The Living Wage Foundation cites these reasons for paying a Living Wage:

Good for Business
An independent study of the business benefits of implementing a Living Wage policy in London found that more than 80% of employers believe that the Living Wage had enhanced the quality of the work of their staff, while absenteeism had fallen by approximately 25%.
Two thirds of employers reported a significant impact on recruitment and retention within their organisation. 70% of employers felt that the Living Wage had increased consumer awareness of their organisation’s commitment to be an ethical employer.
Good for the Individual  
The Living Wage affords people the opportunity to provide for themselves and their families. 75% of employees reported increases in work quality as a result of receiving the Living Wage. 50% of employees felt that the Living Wage had made them more willing to implement changes in their working practices; enabled them to require fewer concessions to effect change; and made them more likely to adopt changes more quickly.
Good for Society 
The Living Wage campaign was launched in 2001 by parents in East London, who were frustrated that working two minimum wage jobs left no time for family life. Over 15,000 families have been lifted out of working poverty as a direct result of the Living Wage.

As I have said this may be impossible for many small businesses, none more so than the hard-pressed tenants of brewers and pubcos, so here's a suggestion for the likes of Punch and Enterprise, the pub trade's corporate Rackmen … for any tenant that signs up for the Living Wage, how about rebating the differential between that and minimum wage by means of reduced rent?

For a pub employing ten staff, say, this would be about £466 a week, or £24,000 or so … too much? How about going halvsies? £12,000 per pub to repair your reputation? Can't afford the cash? How about a free 11 gallon keg of lager per week? The tenant sells the lager at 100% profit and that goes to fund the Living Wage, surely you can afford that out of your massive supplier discounts? How about that for a bit of preredistribution?

And as for government, isn't it about time that the Living Wage became the national minimum wage? I, for one, can't understand the rationale of a prime minister supporting the aims of the Living Wage Foundation presiding over an administration that enforces a minimum wage that is 17% below what is actually needed to survive on or values the work one does based on age. But then again, nothing that Whitehall and Westminster does surprises me anymore. (By the way I bet that scrapping the beer duty escalator would go a long way to funding the Living Wage in pubs anyway).

A final word for publicans, if you are already paying the Living Wage or above, then bravo, if you aren't then seriously consider it after all as grandma said … "If you pay peanuts …"

(This piece amended with new Living Wage set at £8.55 for London and £7.45 outside the capital 5/11/12)

Friday, 2 November 2012

Enough with the pictures already ...

Those who read this little corner of the blogosphere will have noticed that recently I have been using a lot of what data journalists call infographics ... don't know which is worst the former or the latter ... but hey ho it has been useful as a way of spreading the message in another forum, namely, Twitter.

With a limit of 140 characters (or if you follow 'best practice' 100 characters) the constraint on meaningful and articulate messages can make communication for a wordy old bugger like me a bit of a challenge ... hence the need to create attachments to tweets that fully convey the point I am trying to make.

This has been incredibly useful over the last week or so in the lead up to yesterday's back bench business debate in the House of Commons on the beer duty escalator (scrapping thereof). I like to think that in some small way that the combined 'reach' that some of these images achieved has helped inform the wider debate and acted as a call to action for those in the trade (and their customers) who might not ordinarily participate in 'politics'.

There are many who say that religion and politics are things that any publican should steer clear of, in their own pub at least, and there are those that say simply getting out of bed is a 'political act' ... but with so much at stake for our industry and that of our suppliers, most notably brewers, I think it behoves all of us in the trade to engage with our customers on the issues facing us and (by dint of association/custom) them.

With unprecedented pub closures in recent years, brought on by many factors already discussed here and elsewhere, yesterday's debate in Parliament was, thankfully, not just about getting a tax break for pubs and brewers, it was an impassioned and evocative plea to save what is, for many people, the quintessential social institution in this country.

So when you, your colleagues and your customers can't be bothered with the issues facing our industry, stop, take a moment, and participate in the debate ... without 'grass roots' support no matter what is spent by industry lobbyists or said by the trade press or pundits such as myself, any efforts to effect changes to the way this administration act toward our industry will ultimately fail or be a waste of money.

So occasionally, if I drop a picture or two into the blog, to illustrate a point, I trust you will forgive me ... hey, you can always pass it on to your customers without having to spend endless hours proselytising and maybe the next time we get our say, in the next General Election, our views might be heard and taken note of by those whose political base relies so heavily upon our customer base.

Now vicar about that ecumenical discussion about those angels dancing on the head of that pin ...

Enjoy the weekend ... and look no pictures!

Monday, 29 October 2012

A picture paints a thousand words ...

Another in my series of a picture paints a thousand words ...


*Living Wage currently £8.55 an hour in London, and £7.45 outside the capital

Wednesday, 24 October 2012

More tales from the crypt ...

Roger Whiteside - CEO Punch Taverns plc ?
As Hallowe'en approaches I thought I'd bring you some spine-chilling tales from zombie pubco Punch Taverns, but first let me remind you of the dictionary definition of a zombie: 
  
“the body of a dead person given the semblance of life, but mute and will-less, by a supernatural force, usually for some evil purpose”



I use the word zombie because this behemoth of the pub trade is currently in debt to the tune of £3,665,800,000 or to use the far less visually impressive common parlance £3.665 billons. ( Source Punch Prelimiary Results for the 52 weeks to August 18th 2012 ) Which is 76 times their annual profit ... which is an impressive profit to debt ratio by any reckoning! Scared yet? As an investor I would be, especially with today's share price. If you bought shares in January 2008 at about £1.25 a share they would be worth 6.55p each today, where as if you'd invested elsewhere in the "Travel & Leisure" sector your initial share value would have stayed just about the same. Surely you must be a little frit by now?

Punch Share Performance (Source www.punchtaverns.com)

OK then let's look at in terms of the tenants of this debt-whale ... Punch is proud to say that it is going to divest itself of 1,595 pubs in the staggeringly misnamed "Turnaround Division" ... the strategy for which is quite blatant in its remit ...
    "Maximising short-term returns: While these non-core pubs remain in our portfolio, we remain committed to driving operating performance and maximising the profits from these outlets."
Anybody else think the only thing missing is the corollary of "... by all means possible and at whatever cost to the tenant"?

The time scale for disposing of these "non-core" assets? For the "sell now/sell later" category (1,029 pubs) it's 1 to 3 years until it's 'goodnight Vienna' and for the "protect and grow" segment if you're in one of these 566, congratulations you're not scheduled for the garbage chute for 3 to 5 years. Either way don't make any long-term plans ...

Ready for some really shocking reading? Then if you're sitting comfortably ...

Number of pubs in turnaround: 1,595, gross margin on drinks revenue totals £34,639,072 or £51,598 per pub, which on drinks sales to you tenants of £82,300,000 equates to 42% gross margin. Not bad for just placing a few telephone calls and taking your orders, no deliveries to be seen in or pipes to be cleaned either!

Which leads neatly on to the total gross margin (drinks, rent and machines) they make on turnaround pubs which is £67,058,686 or £42,043 per pub ...


Now how about you 2,934 tenants in the core estate ... how's it looking for you? Well Punch sold you a whopping £269,100,000 worth of drinks from which it derived it's customary 42% profit of £113,260,928 ... which on average is £91,717 per pub. The total gross margin they achieved was £220,141,313 or £75,031 per pub.
  
The really scary language though is saved for the creditors ... 

"Both securitisations are over levered and unsustainable in their current form; Significant amendments to each of the Punch A and Punch B securitisation structures are necessary, including one or more of a material reduction in debt, an increase in the maturities of the debt and changes to the financial covenants; "
Or put in lay terms "We can't pay what we owe you, it's impossible, can you let me off some of the debt or change my credit terms?" ... something many of you may have asked Punch for ... no need to take a poll on what their probable response was.

Tuesday, 23 October 2012

Time for all good (wo)men to come to the aid of the party ...

So Parliament is to debate scrapping the Beer Duty Escalator on November 1st...



So if you ...

a) drink in a pub
b) drink at home
c) brew beer or work for a brewery
d) manage a pub, work in a pub
e) are the tenant at a pub
f) own a freehold pub
g) own a pubco, work for a pubco
h) work in the logistics chain that supplies pubs and breweries
i) work in any ancillary industry servicing the pub trade




... contact your MP and tell them you expect them to support any motion to scrap the duty escalator.

If you don't know how to contact your MP go to They Work For You where you'll find an easy postcode search facility.

And more is less ...

Just an adjunct to yesterday's post, as the British Beer and Pub Association announced that UK beer sales fell by 4.8% in the last quarter compared to the same quarter last year. This drop on top of falling beer sales in the previous quarter of 5.3%.

In six months that means a total 166,000,000 less pints sold,



... the message sinks in?
which, using CAMRA's estimate of £1 per pint (on average) means
  
£166,000,000 less tax paid,

so my question to this economically illiterate Chancellor is

 which bit don't you understand?

Monday, 22 October 2012

Less is more ...

No chance of that with the current administration ... minimum pricing, late night levies, duty escalator, business rates revaluation freeze ... and a Chancellor that does not appear to understand the basic economic principles of 'inelastic demand' and the law of diminishing returns as demonstrated in The Laffer Curve.

Apart from fascinating research by those interested in the societal impact of alcohol consumption, such as the University of Sheffield, little seems to have influenced the political debate, however, a new report by the Institute of Economic Affairs, Drinking in the Shadow Economy, may change that. 



Perhaps a helpful civil servant will slip it into Georgie Porgie's red box ... and maybe he will then take notice of what many of us in the hospitality and brewing industries have been saying for sometime. That the third highest rate of duty (let alone other direct, indirect, and pseudo-taxation) is counter-productive:
"How do we explain the apparent lack of association between affordability and consumption? Demand for alcohol is relatively inelastic and drinkers have a series of options in front of them when real prices increase. They can do as the government hopes and drink less, but they can also do any of the following: (1) make savings elsewhere in the household budget, (2) switch from the on-trade to the off-trade, (3) downshift to cheaper drinks, (4) shop abroad, (5) brew or distil their own alcohol, (6) buy counterfeit or smuggled alcohol, and finally (7) buy surrogate alcohol (e.g. methanol, antifreeze, aftershave). The extent to which consumption patterns change depends on personal income and the price of drink. There is little doubt that financial considerations have helped shift drinking from the pub to the home in countries such as Britain,"
(above from the IAE's report)

 ... in short we Brits like a tipple and 'nudge economics' or crippling taxation won't curb that desire.

How much will the cost be of this country's punitive alcohol taxation regime?
"Contrary to temperance rhetoric, high alcohol taxes are not necessarily good for public health
because, although excessive alcohol consumption undoubtedly carries risks to health, so too
does moonshine. Counterfeit spirits and surrogate alcohol frequently contain dangerous levels of
methanol, isopropanol and other chemicals which cause toxic hepatitis, blindness and death. These are the unintended consequences one associates with prohibition, albeit at a less intense level than was seen in America in the 1920s.
It scarcely matters to the politician whether unrecorded alcohol comes from legal or illegal sources.In either case, the treasury loses out on revenue. In Britain, HMRC estimates that the alcohol tax gapcould be as much as £1.2 billion per annum, plus the costs of enforcement, and that this is largely because ‘duty rates on alcohol are far higher in the UK than in mainland Europe’ (National Audit Office, 2012: 2, 10). This is the price the state must pay for excessive taxation, but the politician is also aware that these high alcohol taxes raise £9 billion a year (Collis, 2010: 3). Being in possession of these facts he may conclude that reducing the illicit alcohol supply through tax cuts will probably reduce net alcohol tax revenues.
We argue that such a focus on maximising tax revenues is short-sighted and carries significant risks. Failing to deal with alcohol’s shadow economy threatens not only the public finances, but also public health and public order. Unrecorded alcohol has, as( Nordlund and Österberg note, ‘the potential to lead to political, social and economic problems’ (Nordlund, 2000: S562). In addition to the health hazards presented by unregulated spirits, alcohol fraud in the UK is, according to the HMRC, ‘perpetrated by organised criminal gangs smuggling alcohol into the UK in large commercial quantities’ (HMRC, 2012: 8). Alcohol smuggling and counterfeiting is linked to other illegal activities, including drug smuggling, prostitution, violence, money-laundering and - in a few instances -terrorism."
(ibid - my highlights)

How about that then? Is this litany of criminality a "price worth paying"? The IEA certainly don't think so ...
 "It is too early to say whether the recent well-publicised cases of large-scale illegal alcohol production in the UK represent a lasting shift towards a Moonshine Britain, but it may not be a coincidence that they have come to light at a time when regulated alcohol has become less affordable as a result of successive tax rises and a major recession. Policy-makers should take the threat of illicit production seriously when considering alcohol pricing in the future."
 (ibid - my highlights)

But then again when has reason & research ever been so outweighed by rhetoric and dogma than with the current government?  Perhaps a little less demonisation of the ordinary drinker might lead to more positive results than a temporarily bulging Treasury ... it would appear (from this, albeit somewhat subjective discussion document) that more taxation will lead to more unintended consequences both in terms of public health and public order. I know which I would prefer ...

Thursday, 18 October 2012

WTF? Is Jo Swinson Out Of Her Mind?

I was totally gobsmacked to read in the Publicans' Morning advertiser that Jo Swinson MP the minister responsible for monitoring the self-regulation deal for the pub industry has decided that all the commitments "have now been achieved".

I have taken the time to prepare an email template for those interested to know how she came to this conclusion and might wish to ask the minister WTF?

You can access the document here ... http://twitdoc.com/1IQX

I urge you to send her this enquiry ... or one of your own wording

Wednesday, 17 October 2012

One rule for them ...

The ever informative Propel.Info Newsletter contains a fascinating little snippet this morning, that bears sharing to a wider audience and certainly got me thinking ...

Mike Tye and Spirit Pub Company
" Spirit aims to raise £2.1m by selling three freeholds let to Tesco Express at auction today: Three Spirit Pub Company freeholds let to Tesco convenience stores will be auctioned by CBRE today. The three sites are: Tesco Express in Orton Wistow, Peterborough, with a guide price of £750,000 to £760,000 (rent is £56,000 per annum); a Tesco Express in Burley Road, Leeds, with a guide price of £600,000 to £610,000 (rent is £45,000 per annum); and a Tesco Express in Gracemount Drive, Edinburgh, with a guide price of £720,000 to £730,000 (rent is £50,000 per annum). "


The first thing that stuck me was how little the rent being charged on these buildings is. One can assume that the other income streams that pubcos usually derive from their tenants (principally discount income from tied product purchases by the tenant and gaming machine income) are not flowing in from Tesco, so the total income stream is limited to the rent paid by Tesco. 

Which beggars the question of what is a fair market rent in the eyes of pubcos such as Spirit or its step-sister company Punch Taverns? If there are no ties for wet products or gaming machines in these supermarket leases aren't they, in effect,  the equivalent to a free of tie lease, and therefore a free of tie rent? (I know, somewhat simplistic but many tied tenants of these rapacious companies might easily come to the same conclusion). 

Using historic multipliers (such as those used on the How To Run A Pub freehold calculator) to determine an approximate level of trade, would mean that the Peterborough site would trade at 200 barrels; the Leeds site 150 barrels, and the Edinburgh site 210 barrels (all with a nominal £2,000 gaming machine income p.a.) So Spirit have been forgoing £52,000, £41,000 and £54,000 respectively in terms of discount and other income from Tesco and still managed to satisfy their internal profit requirements every year on all these sites.

Which brings me on to the second thought that sizzled through my noggin ... and all this to one of the most irresponsible retailers of alcohol in the UK marketplace ... Tesco ... a supermarket, that along with its competitors, is widely accepted as having had a hugely deleterious effect on the UK pub trade. 

What a signal message this is to its tied tenants ... "we'll not only screw you with unsustainable levels of rent and eye-watering levels of tied product pricing, but we'll also subsidise your most voracious competitors until we can sell your pub to them at auction" ... bloody nice business model! No wonder Spirit is so desperate to bring in new 'business models' such as the three tiered franchise system they are peddling presently.

I wonder how many Spirit (and other pubco tenants) are thinking ... "fool me once, shame on you ... fool me twice, shame on me..." ? 

Well to them I say ... "SHAME ON SPIRIT , NOT YOU ! " ... and all this before breakfast and my morning meds ...

Sunday, 14 October 2012

Alcohol To Be Means Tested



Yet again the 'dead-hand' of unintended consequences may be at the helm of Britain's ship of state. In a piece in the Telegraph this week, a worrying example of upperclasshole thinking has surfaced.

Iain Duncan Smith (IDS)has asked his officials to see if so-called ‘problem’ families should receive their welfare payments on smart cards, rather than in cash.
The cards would only be able to pay for “priority” items such as food, housing, clothing, education and health care.
The Work and Pensions secretary wants to stop parents who are alcoholics or who are on drugs from using welfare payments to fuel their addictions.
The team of civil servants in his department have been asked to come up with proposals by the end of this month.
However the Government cannot currently stipulate how people spend their benefits money and the law would need to be changed to do so for certain groups.
He (IDS)said: “I am looking at the moment at ways in which we could ensure that money we give them to support their lives is not used to support a certain lifestyle."
It's not for me to say whether the '(un)deserving poor' deserve a drink or not, one may see this as a totally benign measure to protect the children of disadvantaged "problem families" … but what it is for me to say is that this is just the latest salvo in the "war on alcohol" that is being waged in this country through alcohol's continued demonisation by the 'worthy few'.

At which point does the policy stop? Will the next step be for anyone receiving any state benefit be subject to this form of creeping prohibition? Those in receipt of tax credits? After that, students, perhaps? After all they will be receiving the largesse of the state in the form of their student loan, that until they reach a certain level of salary remains unpaid. Will graduates only be able to consume alcohol when they have paid their loans off? How about pensioners?

What about all those pesky public servants … such as the nuMPties themselves? Will they be forced to give up alcohol as they are paid from the public purse? (I feel sure it would stop just short of them somehow …)

Idsthehawkturneddove
If ever there was a better example of the disjointed thinking of this administration then I am temporarily at a loss to find one … as if those affected by this measure couldn't find a way to get round the system … or perhaps IDS (Irritating Dickhead Syndrome) thinks that they are as stupid as him?

I suspect that even "Conservative Home" didn't bank on this gem of a "bold step"...





Ho hum off for a pint, whilst it's still legal …

Updated, 19/12/12 ... is the idea gaining traction with Alec Shelbrooke, who has drafted a Bill that would change the law to allow welfare payments to be made on a new “welfare cash card” whose use could be restricted by the Government:
"Introducing a welfare cash card on which benefits will be paid, claimants will only be able to make priority payments such as food, clothing, energy, travel and housing. The purchase of luxury goods such as cigarettes, alcohol, Sky television and gambling will be prohibited”
 Just one more arrow in the quiver of those who continue to demonise alcohol ... just call me Cassandra ...

Friday, 12 October 2012

Shock Horror - Students Talk Sense!


Hope pub
Hope for us all?  (this one in Smithfield)
Hat's off and a resounding three cheers to the group of Kingston University architecture students who have submitted a proposal to UNESCO to grant World Heritage status for the London Public House as a "type".








"When you talk about a special pub and what's unique about it, it suddenly seems a bit futile to only protect the physical elements of the building, without thinking of who uses it and for what," says tutor David Knight, who oversaw an army of 435 students compiling a survey of 87 distinctive or typical London pubs, including one-minute Lumière-style films.

 "Hopefully our survey can start to describe more than just the physical things, or rather understand how they relate to occupation and the needs of the pub's community," he says.
"For example, it could be that the loss of an upstairs function room has a catastrophic effect on a pub which is used by community groups for meetings, wedding receptions, and so on. Accordingly, our research captures extraordinary examples but it also aims to try and describe the typical, or generic qualities of 'London pub-ness' which might influence policy."

The London pub, and I would venture a good many in the rest of the country are deeply embedded in this country's cultural identity and of immense social and economic value. What a shame that so many are still closing on a permanent basis to be replaced with convenience stores and residential developments.

To make it on to such an august list, the heritage subject must meet a range or criteria in the assessment of Outstanding Universal Value, which include "representing a masterpiece of human creative genius", "containing superlative natural phenomena", "exhibiting an important interchange of human values", and "bearing a unique or at least exceptional testimony to a cultural tradition".

There is no doubt that the great British pub, whether in the capital or not, is a work of genius, exhibits an invaluable medium for the "interchange of human values" and undoubtedly provides "exceptional testimony" to our rich "cultural tradition". The 350 page submission has been sent to the Department for Culture Media and Science and I sincerely hope it is taken up … maybe one government department at least will formally recognise what the rest of the country do, that pubs in all their guises and locations are an integral part of UK life, UK culture, UK plc … and then, just maybe, other departments such as the Treasury will take note and start giving our much benighted industry a break.

With thanks to Oliver Wainwright in the Guardian for bringing this to my attention, as he says " If Viennese coffee house culture has made the list, surely our humble London pub can too."

Monday, 1 October 2012

Beer, beer, lovely beer ... well some of it ...

It's that time of year again when The Cask Report (now in its 6th year) is published and our collective thanks should go to the redoubtable Pete Brown, for his sterling work in authoring this 'state of the nation' address.

Required reading for any publican its comprehensive view of cask ale, how it's perceived and how it's developing can be downloaded here.

There's a wealth of statistics based upon market research and if you are selling (or considering selling) cask ale the section on perfect mix of ales is invaluable.

On a slightly dissident note, however, I would once again reiterate that the brewing industry in all its myriad forms from domestic brewers, to micro-brewers, to town brewers, through to the regional and national brewers is continuing a great tradition of brewing in this country and that no matter the medium of delivery, all beer should be celebrated ... be that cask, keg or bottled.

So perhaps next year the report will simply be re-titled to be The UK Ale Report, or some-such, and Mr Brown will further amaze us with insights into all forms of beer brewed in the UK ... as the report in its current form doesn't really encompass or inform us of the total picture of the British beer market ... just a thought ... as if the manufacturers of the recyclable 'Pertainer Keg' gain purchase as reported by Tandleman then maybe artisan or craft beer or real ale or whatever we call them will evolve in a way that makes the word 'cask' somewhat redundant.