Sunday, 30 March 2008

Denver brewing centre

Make your mind up, Coors
-- do you like museums?

The giant American brewer Coors, owner of the former Bass breweries in Burton-on-Trent, plans to axe its visitor centre and brewing museum in the town on the grounds of cost (see previous blog and main website) -- but runs a highly successful brewing museum in Denver, Colorado. A report in the Rocky Mountain News reveals that Coors, based in Golden in Colorado, is updating the brewing museum to use state-of-the-art technology in order to attract even more visitors to the facility.
It seems clear that Coors is more committed to a museum in its home state than to the former Bass Museum it inherited in Burton. The Bass Museum attracted a quarter of a million visitors a year but numbers have fallen to a fraction of that figure as the visitor centre gets little support or promotion.
Coors says it costs £1 million a year to run the visitor centre in Burton. That's small change for a company the size of Coors -- but it's struggling in Britain, along with rivals Carlsberg. InBev and Scottish & Newcastle, as a result of the global brewers' "deep discount" policy with supermarkets. Discounts are so severe that the global brewers make at most 1p in profit from each bottle or can.
A report in the trade paper Morning Advertiser, 27 March, shows to what extent the supermarkets have the brewers by the throat. The paper reports that the multiple retailers will continue to offer cut-price promotions for alcohol in spite of the steep rise in duty imposed in the March Budget.
The paper adds: "One off-licence chain, Bargain Booze, has even written to brewers asking them to absorb the extra costs or face being de-listed from its 600 shops. A letter seen by The Observer said: 'We will have to review the position of any brands where the retail ticket is increased in our business...We reget to say that we cannot absorb the increases in costs that the Budget would seem to demand."
Bargain Booze ask suppliers to help by "absorbing these increases within your own company."
The global brewers should learn the lessons of recent history. In the early 1990s the large regional brewer Charles Wells in Bedford took a decision to phase out production of own-label beer for suupermarkets. Profits on own-label were so low that the company faced severe financial difficulties. Instead Wells built up its own portfolio of brands, including ales and lagers. It has merged with Young's of London to form Wells & Young's. Its Bombardier premium ale is now one of the most successful cask and packaged brands in the country and the company has overtaken Greene King in volume terms.
If the global brewers stood up to the supermarkets and got realistic prices for their beers they wouldn't face financial meltdown -- and Coors could afford to support the Burton visitor centre.

Friday, 21 March 2008

Burton museum to close

Coors to axe visitor centre

The giant American brewer Coors will close its visitor centre in Burton-on-Trent in June, leaving Britain without a major museum dedicated to the history of brewing in Britain. The site was first known as the Bass Museum but ownership passed to Coors when Bass left brewing and the American company bought the world-famous breweries.
Coors says the running of the visitor centre costs £1 million a year and, in a declining beer market, it needs to invest that cash into supporting its key brands. It says visitor numbers have declined even though it offers free admission to people who live in the town. But the centre has not been promoted outside Burton.
The museum is a magnificent collection of brewing artefacts. As well as detailing the history of brewing in Burton, famous for its India Pale Ales in the 19th century, the museum also covers the history of brewing world-wide. There is also a collection of old brewing vehicles, including a car shaped like a bottle of Worthington's White Shield, as well as dray horses.
It would be a tragedy if this collection were broken up and lost. The local MP, Janet Dean, will host a meeting in Burton on Wednesday 26 March to discuss ways to save the centre. One idea being floated is to form a trust to run the museum that, unlike Coors, could attract public funds, including Lottery money. When Whitbread left brewing all the material assembled over many years that traced the history of the company from the 18th century was thrown in a skip -- it's vital that this does not happen to the Burton collection.
In the long term, even if the Burton museum can be saved in some form, London is the obvious place to house a major museum dedicated to British brewing and the English pub. The problem is cost. When a group made up of representatives of the London brewers, CAMRA and the trade paper the Morning Advertiser looked at the possibility of opening a museum in London, high rents in the capital made the project impossible. We were offered the basement of the Hop Exchange in Southwark, which would be an ideal site, but the annual rent was £100,000.
The Mayor of London was unable to help but once the Burton issue has been solved -- if it can be solved -- then further attempts will be made to look into the possibility of a museum in London that will celebrate Britain's unique contribution to the world of beer.

Wednesday, 12 March 2008

The Budget

Alistair is no Darling

Chancellor Alistair Darling has hit beer with a swingeing increase of 4p a pint -- action that will heap misery on British pubs, lead to more closures and do nothing to tackle binge drinking and the sale of cheap alcohol by supermarkets.
With around 30 pubs a week closing in Britain, the trade needed help not hindrance. But Darling has been pressurised into this massive price increase as a result of intense media pressure and the absurd claims of bodies such as Alcohol Concern. For a start, a 4p increase will be substantially more by the time beer reaches the bar and wholesalers, retailers and publicans have added extra pennies to maintain their margins. The likely increase will be round 6-8p a pint.
The result will be that pubs will be at an even greater disadvantage to supermarkets and off-licences, which will continue to promote cheap beer and other alcoholic drinks, with beer in particular being sold cheaper than bottled water.
The best way to tackle binge drinking among a minority is to encourage them to use pubs. Pubs are licensed premises. People drink moderately and sensibly in pubs and publicans can lose their licences if they allow unruly and drunken behaviour. Young people learn to drink sensibly in a pub atmosphere by mixing with older and more experienced drinkers.
Darling's price increase will encourage rather than deter excessive drinking on the streets as people forsake the pub for supermarkets. It's black day for pubs and pubgoers while the supermarket bosses will be rubbing their hands with glee.

Monday, 10 March 2008

SIBA - the elephant in the room

If you had to tick a box to choose the most influential voice in the brewing industry today would you choose the British Beer and Pub Association, the Independent Family Brewers of Britain – or Siba, the Society of Independent Brewers?
To use a popular phrase of the moment, it's a no-brainer. To extend the cliche, Siba is the elephant in the room. It sets the pace. Powerful people in government and even the giant pubcos sit up and listen when Siba comes calling.
I came away from the organisation's annual conference in York last week reeling at the size and the effectiveness of the organisation. It has around 450 members. They are dedicated and passionate people, with a deep-seated belief in brewing quality beer, most of it in cask-conditioned form.
As well as attracting some top drawer speakers, there were companies falling over themselves to sponsor the conference, the annual brewing awards and many other aspects of Siba's activities.
Maltsters, hop merchants, bottle and cask makers, and manufacturers of brewing equipment had stands all round the conference hall. They recognise that Siba is a powerful force and, against all the odds, is recording increased sales for its beers at a time when bigger brewers are in free fall.
The organisation has come a long way from 1980 when a handful of micro-brewers, spearheaded by Carola Brown at Ballards in Hampshire, launched the Small Independent Brewers Association, as it was first known. With the exception of Camra (the Campaign for Real Ale), who recognised a kindred spirit, not many people took Siba seriously.
The regional brewers in particular were either patronising or downright rude. There were mutterings about “beer in a bucket merchants” and poor quality. The main attitude was simple: ignore Siba and it will pack its tiny tent and disappear.
But the tent has turned into large marquee. The number of regional brewers has more than halved. Many of them didn't have the bottle to take on the national brewers and gave up the ghost.
Siba doesn't lack bottle – even though most of its product comes in cask form. Today it's a large, impressive and remarkably professional body. And it has two key successes that have helped transform not just the brewing industry but have also impacted on consumers as a result of increased choice in pubs.
The first success – and it was a Siba hobby horse from its inception – was Progressive Beer Duty (PBD). The demand was simple: smaller brewers were at a disadvantage as they paid the same levels of excise duty as even the giant national producers who enjoyed “economies of scale” thanks to sophisticated and computer-controlled equipment.
After years of lobbying, PBD was introduced in 2002. At first he benefits went only to brewers who produced not more than 18,000 barrels a year. That was increased a couple of years later to 30,000 barrels.
The results have been spectacular. Many new brewers have entered the industry while existing craft brewers have been able to invest in new equipment and even buy pubs as showcases for their products.
The second success has been Siba's Direct Delivery Scheme (DDS). This was the brainchild of Nick Stafford of Hambleton Ales in North Yorkshire. The scheme was the result of craft brewers finding it impossible to get their beers into pubco outlets.
They were told that, on top of discounts, they would have to drive long distances to depots to drop beer off, then return to pick up the empties. There was no profit to be made,
DDS allows the brewers to deal direct with individual pubs. It has been such a success, with giant pubco Enterprise Inns part of the scheme, that it is now a subsidiary company within Siba, with a database of pubs throughout the country.
The winners have been not only Siba members but also publicans and drinkers. There is now greater choice in pubs. Drinkers are no longer confronted by national brands but can choose from a wide variety of beer styles.
Siba is a great British success story. It's good to know, in the age of global giants, that occasionally the small guys can win.