SPRING BUDGET
The Chancellor of the Exchequer presented his spring budget on 6 March. In the run-up to it, CAMRA had, as it usually does, asked its members to lobby their MPs. The main aim this time was a further reduction of 20% in the duty charged on draught beer and cider. This was the ‘Make It 20’ campaign, which was also supported by SIBA (the Society of Independent Brewers) and the IFBB (Independent Family Brewers of Britain). CAMRA also supported the hospitality trade’s call for a cut in VAT to 12.5%. There were also hopes to see the long promised reform of business rates and the reversal of the HMRC restriction on takeaway sales of beer on which the reduced duty on draught beer has been paid.
So what did we get? Frankly, not a lot. Alcohol duty was scheduled to increase by 3% in August but it was frozen again until next February. According to the Treasury on their ‘X’ (formerly Twitter) account, this has the effect of ‘cutting costs for breweries, distilleries, restaurants, nightclubs, pubs & bars’. It’s hard to see how a freeze actually cuts costs and, given that duty is paid by brewers, any help for pubs would be dependent on the breweries passing it on through lower prices but there is nothing to pass on. The take-away anomaly was not mentioned but CAMRA will keep lobbying.
As regards VAT, the only change was an increase in the registration threshold for small businesses, which might help a few pubs that are separate businesses of a certain size. No help was offered as regards energy costs, that remains a serious threat to pub viability. As regards business rates, despite the Chancellor conceding in his November statement that temporary fixes cannot go on forever, the can continues its journey down the road. The previously announced 75% relief for hospitality businesses in England continues, but with the prospect of a return to full rates from April 2025.
Although he said he was ‘backing the Great British Pub’, the best that can be said is that the Chancellor didn’t make things any worse than they were already going to get. He did nothing to promote drinking in the regulated setting of a community local. As part of their pub closure figures for 2023, CAMRA calculated that the loss to local economies from pub closures was around £100 million. Pubs and clubs, in all their forms, matter.
FRESH ALE
Innovation is, generally, to be encouraged. We need to be wary however of new ideas that are not quite what they seem. The well respected Otter Brewery from Luppitt in Devon came up with the idea of what they call ‘fresh ale’ (Amber Fresh 4% ABV) in May last year. It is, they say, intended to bridge the gap between craft beer, cask ale and lager and it is initially brewed as a cask ale but, instead of being put into casks, it is ‘gently’ carbonated and then put into kegs. I may be missing something but it sounds like old style keg beer to me and the main purpose, to extend its shelf life, is the same. It will stay ‘fresh’ for 14 days as against the three or four days for traditional cask ale.
Now, the Carlsberg Marston’s Brewing Company (CMBC) has adopted the idea but with one significant difference. They are going to serve their version through handpumps which, CAMRA believes, is misleading. The handpump is generally recognised as a symbol of cask conditioned beer which this will not be. You will find CAMRA’s definition of real ale elsewhere in this edition. The beer does not retain any viable yeast when it leaves the brewery and will not therefore undergo further conditioning in the pub cellar. Following representations from CAMRA, CMBC say that they will label the handpumps in question as ‘brewery conditioned beer’ but will customers appreciate the difference? It will also reduce the number of true cask ales available by replacing one of them on the bar.
CAMRA national director Gillian Hough, chair of the Real Ale, Cider and Perry Campaigns Committee, commented, “It’s baffling why CMBC feels the need to serve a keg beer through cask ale handpumps in the first place, when it would seem to be simpler and more honest to simply serve it through keg taps, as with all other keg products. It would be even better if this company, despite claiming to be incredibly proud to be a leading brewer of cask ale, actually invested in producing new cask ales and supporting its existing beers. It’s particularly ironic that instead it has spent time closing the historic breweries in their portfolio and now wants to cash in on that cask heritage with a keg product which hijacks the handpump. Even with additional labelling, our fear is customers, especially those who perhaps don’t understand a term like ‘brewery conditioned’ or don’t notice the small print, will be confused. It also seems likely that over time this potentially misleading approach will erode the image of the iconic beer handpump as a clear symbol of cask conditioned beer. We believe that beer drinkers should be fully informed at the point of dispense and we will continue to condemn dispense practices that seek to mislead the consumer, particularly by selling non-live, non-cask beers through cask beer handpumps. CAMRA calls on CMBC to either provide a genuinely live and fresh beer to be served through handpumps, to give the drinker what they expect and want, or to be honest and serve this so-called ‘fresh beer’ through keg taps. If consumers are interested in learning more about live beer, CAMRA’s award winning Learn and Discover platform features content on this and the whole brewing process.”
Otter Brewery’s managing director, Patrick McCaig, welcomed CMBC’s entry into the market saying, “We created Fresh Ale to reinvigorate cask ale and we believe that CMBC coming into the category can only be a good thing for cask ale as a whole.” The British Beer and Pub Association (BBPA), the trade body for the big brewers, has given the idea its backing.
PUBS CODE ADJUDICATOR REAPPOINTED
I haven’t mentioned the Pubs Code Adjudicator (PCA) for a while. Readers will recall that this is the official responsible for enforcing the Government’s statutory Pubs Code for England and Wales, which governs relations between large pub owning businesses (POBs) and their tied tenants. At the end of February, the Government reappointed Fiona Dickie for a further three year term. Ms Dickie commented, “I am delighted to be reappointed as the Pubs Code Adjudicator, which affords the unique opportunity to continue to contribute to the code’s positive impact. Much progress has been made in restoring balance in the relationship between tied pub tenants and pub-owning businesses through embedding cultural change in the tied sector so that tenants’ businesses can thrive. I am proud of the PCA’s success in reducing arbitration cases and successfully completing the first investigation under the code.” A barrister and member of the Chartered Institute of Arbitrators, Ms Dickie was previously the deputy PCA and succeeded Paul Newby, the first holder of the post, in May 2020.
The activity of the PCA is subject to a review every three years. This also includes consideration of whether the PCA’s powers are adequate. The second review, for the period 1 April 2019 to 31 March 2022, which, of course includes the pandemic, was positive and found that no changes in the law were necessary. The various trade bodies were satisfied but CAMRA saw it as a missed opportunity and called for changes that would give the tenants of tied pubs more choice over which beers they offer, including the right to a guest draught beer or cider from local and independent producers instead of having to buy from a restricted range at prices set by their POB. The prices charged by the POBs contribute to the financial problems that are currently affecting pubs in this category. This would also improve choice for the consumer. It is possible, under the Market Rent Only system allowed for in the code, for a tenant to escape the tie by instead paying a higher rent but this has often proved difficult to arrange and is probably the most common dispute that the PCA has had to deal with.
Fundamentally though, and with all due respect to Ms Dickie, her post should not be necessary. The tie, as operated by the big POBs, should not exist. The original purpose of the tied house system was for brewers to sell their own beer in their own pubs. The big POBs do not brew. They purchase the beer that they supply in bulk, hence so many pubs selling what we have come to know as ‘the usual suspects’. This is anti-competitive and the Government has it in their power to put a stop to it any time. CAMRA is campaigning for them to do so.