Examination of Witnesses (Question Numbers
340-359)
DR PETRA
MEIER AND
MS LILA
RABINOVICH
14 MAY 2009
Q340 Sandra Gidley: Surely the industry
must have done some research on whether people drink more if they
are standing up and there are no chairs. I cannot believe that
such a sophisticated industry would not have done that research.
If not, you are missing a trick.
Mr Blood: Thank you for the advice.
I have been in the business for 20 years and I have never done
that research. What I would recognise, and I am not trying to
be clever or blase« about it, is the industry does design
some town centre venues to suit younger people—not under-age
people, younger people—for more active evenings out, and
they do want to mix and mingle with a wide number of people, so
they do not want lots of banquette seating and small tables, they
want a different style of social interaction. Yes, it is a successful
and proper way to run town centre venues, but we do not do it
to increase the rate of drinking.
Q341 Sandra Gidley: You mean to tell
me you are a business and you do not do things to increase the
sale of the alcohol. Come on!
Mr Blood: I did not say that.
I said we do not do it to increase the rate of drinking. Those
pubs are designed in that style to attract those people on Friday
and Saturday nights. The vertical nature of it or the open spaces
are not done, in my opinion, to increase the rate of alcohol consumption.
Q342 Sandra Gidley: Let me put the
question to you in a different way, because I am finding it very
hard to believe that nobody in your trade has done any research
on this. When a pub has a refurb and chucks out all the chairs
and changes to the more modern vertical drinking style, what effect
does that have on beer sales? What is the average percentage increase
or decrease? Surely somebody has noted those figures in their
takings every week.
Mr Blood: Yes, absolutely. If
you do a refurb of a pub you would expect a rate of return on
your capital, otherwise they would not be refurbished, absolutely,
and it will lead to consumption, but your question was, "Are
you doing it to increase the rate of consumption?", and that
is not the purpose. The purpose is to increase the number of customers
that you have and make the place more popular. It is not about
the rate of consumption, it is about making a place that is attractive
to people on Friday and Saturday nights.
Q343 Sandra Gidley: Surely you do
not really care as long as you sell more beer. I will be honest:
if I had a pub and was selling beer, I would be thinking of ways
to increase the takings; it is business. When pubs have had that
refurb from one style to another, what is the average change in
sales?
Mr Blood: There is no average
change, because sometimes refurbishments are successful and sometimes
they are not successful; sometimes they can double sales, sometimes
they can increase sales by 20%. There is no formula or mechanic
for saying if you take out chairs you will increase sales, or
if you turn the volume up of the music you will increase sales.
Many pubs are more successful for the demographic, the market
opportunity in that town centre. There is no formula for doing
it.
Q344 Sandra Gidley: So your organisation
has absolutely no data on this.
Mr Blood: No data on what happens
to the rate of consumption, no.
Q345 Sandra Gidley: Let us move away
from rate of consumption. Do you have any data on sales?
Mr Blood: Obviously; yes.
Q346 Sandra Gidley: So what is the
effect?
Mr Blood: There is a huge variation.
Q347 Sandra Gidley: Are you able
to release some of that data to us so that we can see that variation?
Mr Blood: Yes, on some of our
capital investments for a variety of styles, but capital investment
in community pubs does prove that the provision there will increase
sales and volumes, and if you refurbish a pub it will increase
the sales of that pub because it makes it more appealing to more
customers.
Q348 Sandra Gidley: I think you are
avoiding the point, with respect. Let us try a slightly different
tack to see if you have a little bit more idea about this. A lot
of pubs offer spirits alongside a pint of lager. Does that increase
the rate of consumption?
Mr Blood: No pubs that we have
do those styles of promotions, so I do not have the data specifically.
Presumably they would not do the promotions if they did not the
feel it affected the rate of consumption. Where people do it they
believe that there is a commercial benefit, and that will be related
to how much alcohol they sell.
Q349 Dr Taylor: Going on still with
you two, I am afraid, to chains of pubs. We are told that Enterprise
Inns and Punch Taverns control about a third of all pubs in the
UK and that these chains usually require the tenant landlords
to source their beers from a particular supplier. Is this a beneficial
development?
Mr Benner: Certainly from CAMRA's
point of view, we are supportive of the principles of the beer
tie. It has worked well for many companies for 100 years or so,
and I think if the beer tie was scrapped it would lead to a lot
of unintended consequences, not least a struggling environment
for the various family brewers in the country that rely on that
tied estate system. As you are aware, the Business and Enterprise
Committee has recommended to the Government that this issue is
referred to the Competition Commission. CAMRA's position on that
is that the Office of Fair Trading should carry out a market study
to establish whether the relationship between lessees, tenants
and the pubcos is fair before we go to what could turn into a
two or three-year investigation and all the upheaval that that
would cause for the industry and for consumers.
Q350 Dr Taylor: We have all got pictures,
probably in country areas, of our own ideal country pubs with
the avuncular bearded landlord behind the bar. How effective can
landlords be at stopping serving to people who are obviously having
too much? I am looking at you really, because I think you are
a pub owner yourself.
Mr Blood: I think there are two
or three things that they can do: (1) The style of pub they run
very clearly determines how successful they are in controlling
the environment, (2) it is about good training and good intervention,
and I know that many of the pub companies (and I think this is
one of the benefits of the pub companies) can develop good training
for bar staff and licensees on how to deal with that tricky moment.
It is not the easiest thing in the world to say no to someone
to serve a drink, and I think all the pub companies have got very
good training and are learning from the repeated experience of
that training as to how to train people and give people the confidence
to say no to somebody.
Q351 Dr Taylor: Would it be another
advantage of these companies that, if there is a pub that is turning
out drunks left right and centre, they can actually get rid of
that landlord?
Mr Blood: I do not think they
can get rid of that landlord under the terms of most leases. It
would require action from the enforcement authorities. If one
of our landlords, under the lease arrangements we have, falls
foul of the licensing regime and that is picked up upon, then
we can act on it, but we cannot act on it on our own opinion because
that would give us carte blanche as pub owners to say, "We
do not like you. We do not think you are doing it properly",
and take away their business and pass it to somebody else. So
it is important for the individual lessee that the judgment of
whether he is a fit and proper person to run a pub falls with
the licensing authorities rather than with us. Again, it is one
area where I would argue that stronger and better enforcement
would help the industry.
Q352 Dr Taylor: But they could at
least take note of the problem.
Mr Blood: Absolutely. All the
time we will talk to people about neighbourly complaints and how
they can change the style of the way they run their business,
but we cannot kick them out, because that would be wrong.
Q353 Dr Taylor: Is it fair to blame
pubs for the increasing violence in town centres?
Mr Blood: No, it is not right
to blame pubs. You should blame the individuals who are drunk
and violent.
Q354 Dr Taylor: Is there evidence
to say that more of those come from nightclubs, illicit drinking
in parks, than actually in pubs?
Mr Blood: Again, if you do research
about how people spend their evenings, people will probably drink
at home, they maybe go to a pub, they maybe go to a nightclub
and then at the end of the evening have an accident, have a fight,
or something like that. As I say, it is quite hard to determine
which behaviour led to the anti-social behaviour.
Mr Benner: There is evidence from
Liverpool, John Moores University, on preloading, that groups
of young people, as much as 50% of those groups, are likely to
drink at friends' houses or their own houses to save money, because
of the huge price differential between on and off-trade, before
they go out on the town.
Q355 Dr Taylor: Do you think the
licensing law liberalisation has made any difference to the safety
of town centres?
Mr Benner: No, from my position,
I think that it is a bit of a myth, the 24-hour licensing idea.
My understanding is that the average time that a licensed outlet
has stayed open following the new Licensing Act is 21 minutes.
I think it is not responsible for the problems that you read about
in some newspapers.
Q356 Chairman: Can I ask you a bit
further on that, Mike? Do you think that, probably over the last
two decades now, when you have wanted to build something that
you would call entertainment (and they may not have alcohol in
them) that they have been directed to town and city centres in
part because they could not disturb, even in urban seats like
mine, the rural nature of villages? I have had them turned down,
where they wanted to put nightclubs in big pubs that were running
out of customers, because of the changing culture in my constituency,
and that has been refused on the basis that they can only go into
town, and town centres and city centres are where these bigger
drinking establishments are being put now, not by licensing law
but by planning law. Would you agree with that? Have you ever
looked at this?
Mr Blood: I think in many cities
and towns the "night-time economy" is a well-used phrase
and planners do want to focus that style of entertainment in certain
parts of towns. There is also a network effect where, if you are
running that style of outlet, it is helpful to be near other outlets
that have that style as well because people like to go to more
than one of those venues in an evening. So there is a network
effect, there is a planning effect and a view from many cities
that they want to encourage the night time economy. Several of
those features I would recognise in the way that the on-trade
has developed in the last 15 years.
Mr Benner: In the mid 1990s there
was an obsession that we could create a cafe society in Britain,
and that led, I think, to too many new establishments opening
up in town centres, but, of course, you cannot really have that
cafe society if it is too cold and it is always raining, so it
did not quite work, and I think that was to the detriment of other
licensed premises, possibly around those town centres, which are
more community based.
Q357 Dr Naysmith: Mr Beadles, why
do you think the size of wine glass servings in pubs and restaurants
has increased significantly in recent years?
Mr Beadles: There is data that
shows that the standard measure in the pub trade is a 175 ml glass
rather than a 125 ml. I think that varies greatly from region
to region. There are lots of more rural parts of the country,
certainly in the north of England, where a 125 glass is still
prevalent. In city centre establishments we see more 250 ml glasses
prevalent, and I think that that has been a move in a lot of city
centre establishments because that is what consumers have wanted
in terms of not wanting to return to the bar. I think we are seeing
a trend more recently in terms of people buying a bottle of wine
to share and, therefore, the size of the glass is not relevant
at that point: you buy a bottle and four glasses. Our perspective
is very much that consumers should have a choice of a 125, a 175
or a 250 ml glass. They should not have a choice of glass; they
should have a choice of measures. I do not advocate that we should
all have to buy new glasses but, I think, a different measure
of wine.
Q358 Dr Naysmith: You think it is
in response to consumer demand.
Mr Beadles: Yes, I do.
Q359 Dr Naysmith: Although there
is lots of evidence that some people say they would rather have
a small glass, the 125 glass, why is it that in some establishments
they do not provide 125 ml glasses?
Mr Beadles: As I say, I think
they should. I think that the establishments should provide 125,
175 and 250 measures and give consumers a choice.
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