Steve Hay, former landlord of the Royal Blenheim, challenges pricing norms
When I left the Royal Blenheim, I had agreed to write some articles for the Oxford Drinker magazine after commenting on a Facebook post. The editor of the online version you are reading, Dave Richardson, reached out and asked whether or not I would still be interested, and commented that it would be great to expand upon the comment I had made. The subject is beer pricing and the disparities between product groups, so here goes.
I have always wondered and have had the conversation with many people, including a lot of CAMRA guys – why are people prepared to pay more for a pint of lager than a pint of real ale? Most lager is produced in ridiculously large quantities and with not much skill – I am talking about your Carlings, Fosters and Amstels here. But you will frequently see these being sold at a higher price than real ale. There is such a disparity in pricing between the two styles of beer that it is laughable, but you try to change it and there are a lot of punters who would argue. Whilst I was at the Blenheim we stocked many beers on cask that were far superior to Staropramen, which was our premium lager and cost £4.50, but back then, if I had tried to charge that price for my cask, there would have been a lot of raised eyebrows!
So it really beggars a question, why won’t people pay the price that cask beer deserves? For the sake of this article I researched what the average price was that Joe Publican could buy a barrel of standard lager for, and also how much for a standard barrel of real ale bitter (unfortunately these prices are way below what a tied tenant would have to pay). From here I calculated how much the cost price was for a pint (I calculated the bitter at 68 pints rather than 72 to allow for any ullage). Unbelievably a mass produced lager costs about 4% more to purchase than cask ale. I then carried out an online price survey to find the average price paid for lager and bitter, and it averages out that we pay 12.5% more for a pint of lager than we do for a pint of real ale.
Why should this be the case? All of the brewers that I know within the real ale industry are highly skilled and so knowledgeable, that they can and often will talk to you for hours about hops malt and barley. You talk to a brewer from multi-national Molson Coors (actually I think the majority of their staff in the brewery are just called operatives), and they will be able to tell you we just put two of sack A and one of sack B into that big metal container and push that button. Surely economies of scale should make lagers far cheaper to purchase, so just how much money are Molson Coors making? Coors produces about 1.8 million pints of Carling every day, which is more than double what most small breweries produce in a year! With that in mind, how much less must they be paying for raw materials? So basically, at the moment, we are paying the major breweries significantly more per barrel than we are paying small breweries. How can this be right?
|Stoke on Trent||£3.33|
So where did this disparity in pricing start? It is widely believed by many parties that it stems from the perceived North/South divide. Historically the North of England had a higher percentage of people drinking cask ale then in the South, where lager was the drink of choice. And research shows that it is far more expensive to drink in the South than it is in the North. The table above shows the average price per pint in 10 cities in the UK. Those in the South are above the national average, those further north below, and Manchester is spot on the average. Unbelievably there is a 41% price difference between the highest and lowest price. Could it really be that simple?
Wherever the difference comes from, it is about time that the gap got smaller. Everything about real ale is a skill, from the initial brewing process to placing a pint on the bar. It has to be looked after every step of the way, and everyone involved has to do it consistently. Within the pub it takes 30 seconds to change a barrel of lager but to bring on a new real ale takes significantly longer, from making sure it is stillaged properly, vented and tapped at the optimum times, to having the cleanest lines so you are ensuring the best quality. This takes time and training, all of which costs money, so should real ale really be cheaper than lager? Isn’t it about time we re-educated ourselves on what the right price is for a superior product?
Oxfordshire is very lucky as there are so many great breweries in the surrounding area; we all know who they are and we would be lost without them. Think how much better it would be if they were being paid a similar price for their product, compared to what is being paid to major breweries. Also how much help would it be to pubs and breweries alike if beer duty was to be reduced. The industry has been through the toughest of times in the last 18 months and it needs all the help it can get. We can all do our bit by supporting local!