Memorandum submitted by Lisa Smith
I am talking about the prices that are charged
by Enterprise Inns for their SIBA DDS scheme. I received my letter
(dated 16 February 2009) on 24 February 2009 stating that prices
will be rising as from Monday 16 February 2009!!
The increase is in effect approx 5.18% per 9
gal cask or approximately £4.50. (Price list and letter attached).
On talking to one of the ladies at SIBA it was acknowledged that
Enterprise Inns has increased the amount they are paying to the
brewer by 3%. I would be interested to know where the other 2.2%
is going and in the current economic climate was this an acceptable
increase to the publican.
I have no problem with brewers receiving proper
payment for their products as they are time consuming to make
and done so with loving care and attention. However, as they are
receiving less than their lowest price to the free trade, I feel
that there can only be problems on the horizon.
On speaking to a couple of brewers the difference
between what I pay and they receive is approx. £30 per 9
gal. This money is not staying within the industry but going straight
to the middleman. I did 522 different ales last year (mostly from
the SIBA schemes) so this equates to £15,660 lost to both
the brewers and ourselves. Most importantly if this amount is
split equally then this equates to a 20p price decrease for the
end consumer, the customer.
These new prices have effectively priced us
out of the market where local ales are concerned. We were planning
on having a local ale as a regular but to make 45%GP on a 3.7%
we would have to charge £2.70. Our nearest real ale pubs
are selling local beer at considerably less than this (they are
not tied to any of the big Pub Companies) and obviously JDW is
selling beer at much less than £2 a pint. We do not want
to compete with JDW, however the difference is now so pronounced
that the customer is voting with their wallets and feet.
We are effectively being put out of business
in a slow and painful way because if we do not raise our prices
we will not have enough money to pay the bills (rent, gas, elec,
licences etc) and if we do raise them then people either spend
less or stop coming in therefore turnover decreases and not enough
money to pay the bills.
We are a CAMRA award winning pub and in the
Good Beer Guide for the last four years. Apart from one year in
our 10 years here, we have increased trade year on year, so we
must be doing something right!!! However, the difference now between
free trade and tied has now become unacceptable.
That someone can make approx £30 for doing
nothing is outrageous.
There are many reasons why the pub trade is
in decline, government legislation, taxation, social issues, supermarkets
and off-licences and the smoking ban. However in our opinion the
one that is overlooked the most is the pricing policies of the
pub companies. Yes we signed a legally binding contract but I
didn't sign up to massive price increases year on year. The difference
now on some products is as much as £50, where as when we
started just over ten years ago it was £10-£15. This
difference is only going to the middleman who contribute nothing
to the actual pub going experience.
27 February 2009