Pub Companies - Business and Enterprise Committee Contents

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

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