Crain’s Steve Brauner hits out at pub companies

While Steve Brauner’s editorship of the North West Evening Mail had its unfortunate moments, it’s hard to fault his stewardship of Crain’s Manchester Business and in particular today’s editorial on the pub companies that treat their houses as mere commercial properties.

This trend took hold in the early 1990s, when I found myself up in Ulverston on behalf of Robinson’s. This was a strange experience as I was used to speaking for the small local brewer everyone loved, but in Cumbria things were different. Robinson’s had bought and closed Hartleys, an even smaller brewer, and all of a sudden I was the enemy.

Anyway. The Hartleys pub I visited was next door to a pub owned by Grand Metropolitan, which having sold off or closed its breweries was then the country’s largest pub company and a trailblazer for the businesses Steve Brauner now blames for the destruction of the pub. Today it earns only the slightest mention in its successor corporation’s official history. The Grand Met pub was about a third of the size of the Hartleys, but the rent was three times greater. Grand Met’s business model was a reaction to the 1989 Beer Orders, which limited the number of pubs a brewer could own and so led brewers to sell off their estates or stop brewing.

For a traditional brewer like Robinson’s, the pub is a brewery tap. They take the large part of their profit from the sale of beer to their own estate and leave the tenants to run their pubs as they see fit, so long as they stick to Robinson’s products. It’s a nice business model: should sales fall you go out and buy more pubs, when sales rise you expand the brewery.

Yet for businesses on the model Grand Met pioneered, the pub has to be the profit centre and life is much harder for licensees. The Campaign for Real Ale (CAMRA) found that 20 pubs closed each month in 2005; a figure that had risen to 56 in 2007; the beer orders where repealed in 2003, but the industry remains too damaged to reverse the trend.

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