Saturday, February 19, 2011

Old Mudge’s Almanack

Following Pete Robinson’s gloomy but all-too-realistic prognostications I thought I would peer into my own crystal ball and see what it revealed for the British pub and beer scene in twenty years’ time…
  • In 2010 there were 14.2 million on-trade barrels sold in the UK, and 12.7 million off-trade barrels. By 2030 that has declined to 5 million on-trade barrels, whereas the off-trade has increased to 15 million barrels, an overall decline in beer volume of about 25%.
  • The pub stock has not quite halved, from 50,000 to 26,000, but many of those that remain concentrate overwhelmingly on food and in practice sell little beer. (Pete Robinson underestimates the ability of pubs to metamorphose into things that aren’t really pubs)
  • Most traditional “all-purpose” pubs in suburbs, small towns, villages and the countryside have disappeared. The “pubs” that remain are mostly town centre canteens of the Wetherspoon type, urban style bars and suburban and rural dining pubs that are restaurants in all but name.
  • Specialist beer pubs continue to do well in some locations, but there aren’t really many more than there are today, and attempts to jump on that particular bandwagon by chain operators usually end in failure.
  • Pubs continue to do quite well in central London and middle-class urban enclaves, which means that the catastrophic decline across the country at large remains largely unheeded by journalists.
  • Wetherspoons have 2,000 pubs in the UK, and account for almost 20% of total on-trade drink sales. They are hailed as one of the great continuing success stories of British business.
  • The smoking ban is never rescinded, and indeed further restrictions are imposed which prevent smoking within 20 feet of external doors, and ban roofs on smoking areas. This effectively makes pubs complete no-go areas for smokers except when they need to eat a meal when out of the house.
  • A few years into the future, although not immediately, a 50mg drink-driving limit is introduced. Although widely predicted to only have a marginal effect, this results in a one-off 10% fall in the wet sales of pubs outside central London.
  • At some stage, something approximating to a 50p/unit minimum alcohol price is introduced. This causes a short-term 2% downward blip in off-trade sales, but no discernible increase in sales in pubs. In the following years, there is a marked increase in the involvement of organised crime in the alcohol trade. High-profile government “crackdowns” have no effect.
  • A “progressive beer tax” is brought in that increases duty per alcohol unit for every 1% strength increment above 3.5% ABV. This means there is very little beer sold above 4.5% ABV. All of the recognised “premium brands” from Abbot to Stella have been reformulated at 4.5%.
  • Half of the current regional and family brewers have left the business, and those that remain concentrate on premium packaged ales (usually, for environmental reasons, now sold in cans) with small pub estates as a sideline and showcase.
  • The international brewers still have no significant stake in cask or premium packaged ales.
  • The sheer scale of the decline of pub beer sales reverses the growth of micro breweries, but some of the stronger new/micro breweries become successful, enduring businesses and account for a third of remaining cask sales.
  • CAMRA has recently recruited its 200,000th member. Within the total of 5 million on-trade barrels, cask ale has exceeded a 20% market share for the first time in a generation. This is hailed as a great success.
A gloomy forecast? Undoubtedly, and I sincerely hope I’m wrong. But if you think I’m being far too pessimistic, then tell me what you think will happen, and let’s see who’s proved right. You could start by having a go at the current poll on what will happen to on-trade beer sales in 2011.

Of course, it should also be noted that forecasts based on an extrapolation of current trends invariably fall foul of a flock of black swans.