How high can real ale prices go?

£5 a pint is now not unusual in Oxford, with the price sometimes bumped up by service charges

Price rises for nearly everything you buy are a fact of life, and it doesn’t seem that long ago that I was bemoaning the price of a pint of real ale hitting £4 in and around Oxford. The growth of craft keg doesn’t help, as it seems that people who drink it are only too happy to pay at least £1 a pint more than for real ale because, well, it’s craft, isn’t it?

I suppose it was inevitable, but the £5 pint of real ale has now reared its ugly head in Oxford and some froth is being talked to justify this. We all appreciate how much pubs have suffered because of the pandemic, and most are still trading well below normal levels as we go into the autumn when some people remain wary of drinking inside, despite the cooler weather. So £5 a pint is justified – isn’t it? Or is it? Many people have also suffered financial hardship due to the pandemic, and anecdotal evidence suggests that many are flocking to pubs that stick with lower prices, and not just Wetherspoon.

The increasing cost of raw ingredients may certainly justify an increase, and that could only get worse if labour shortages affect not just distribution, but the hop harvest taking place this month in England and on the Continent. Oxford CAMRA visited a hop farm in Worcestershire a couple of years ago, and I wonder whether its regular seasonal workers from Bulgaria have turned up this year. Higher beer prices might well be the “Brexit dividend”, a remainer might say, and it’s ironic to see arch-Brexiteer Tim Martin, founder of Wetherspoon, crying into his £2 pint because of labour shortages. We haven’t seen the worst of this yet.

Service charges of 12.5% have now been dropped at the Plough

Even £5 a pint might seem like wishful thinking as 2022 unfolds, and I have already heard one report of a pub in Chipping Norton charging £6.50 for a pint of Timothy Taylor Landlord, its admittedly expensive guest ale. Many drinkers have their own tipping point, and mine is well below that. The only answer might be the cut in beer duty that the pubs industry so desperately needs, but what are the chances of that in these times of a cash-strapped Exchequer? Meanwhile, the supermarkets carry on selling quality and naff beer at a third of the price you pay in pubs – a continuing threat to pubs’ viability. Add in the reluctance of some people to go back to pubs, and the fact that most local breweries now deliver, and the outlook for pubs looks at best uncertain.

So we might have to get used to price hikes, but we certainly don’t want to get used to service charges which a small number of pubs have been levying even on drinks served without any food. I have heard several CAMRA members complain about the Plough on Cornmarket Street, Oxford adding a 12.5% service charge, although that was always optional and has now been dropped, along with obligatory table service. A few other pubs that are continuing with table service only, including the Gardeners Arms and Rose & Crown in North Oxford, do not add service charges. Roger Jenking wrote about the Plough, saying: “You can cancel the service charge but to do so would be embarrassing and may affect the earnings of staff. Does this mean that hourly rates for staff have been reduced as a quid pro quo?  In which case, the punter will end up subsidising the owners.  And is this the proverbial ‘thin end’? It is not clear whether the charge was added to fair wages or a substitute for part of them. This last, of course, makes it difficult not to pay the charge.”

Some beers at the King’s Arms, Oxford have been sold at over £5

The owner of the Plough and also the 1855 wine bar at Oxford Castle, Chris Mulhall, mounted a spirited defence of the service charge while stressing it was always optional, adding that the till system was being altered not to add it to drinks. “I hope the community understand that we were and still are to some extent in survival mode,” he said. “We had to do it or sink, because it allowed us to pay our staff a little more, and this was for good reason because we had no choice. With mandatory table service we had to make sure a member of staff was permanently at the door to accept customers, take their details, do the track and trace, then seat them. Then another member of staff had to take orders, even if it was for a glass of water. The simple fact was where we had one person on the floor we now had to have three, a crazy forced situation. I would ask that people please, please understand our reasoning. I didn’t resurrect a pub after 100 years of closure to see it close again and Covid pushed us to the edge, and I don’t need to remind anybody of the famous Oxford establishments whose doors are no longer open. This was a needs-must in order to keep our staff afloat in the worst of times.”

A great choice and great prices at the Royal Blenheim

Chris’s explanation has certainly made me want to continue supporting the Plough, which was an excellent addition to the Oxford pub scene when opening just a few weeks before this cruel pandemic hit. But at the end of the day many drinkers will go where they feel most welcome and get the best value, and it’s no coincidence that Oxford CAMRA’s City Pub of the Year 2020 (there was no competition for 2021) not only has the widest choice of real ale but also hard-to-beat prices – from a low of £3.50 for a pint of White Horse Bitter to a high of only £4.40 for the luscious Titanic Plum Porter. So well done to Steven Lyne and his team at the Royal Blenheim for what the pub is doing, but wherever you drink, be understanding of pubs’ problems and be kind. They will need our backing in the months and years to come.