'Family brewers need to pass on discounts'

Family brewers are not passing on sufficient discounts to tenants, according to pub trade expert Phil Dixon.

Speaking at the Publican's Morning Advertiser's Tenanted Pub Company Summit, Dixon said tenants of family brewers cannot afford to sell their own company's beer because costs have hit "record-breaking levels" at 40% of turnover.

"There's a word you don't use in the family brewers and that word is discount," he said.

"If our costs are at 40%, or 38%, you can't actually make a profit if your margins are below that. Look at the prices you are charging.

"I'm telling you that the traditional full-pricing tied model has met the fate of Monty Python's Norwegian Blue — it is deceased, it is dead, it is no more.

"The potential is there for you to actually put reasonably attractive prices in and still make margins yourself. But you are going to have to take a hit. You are going to have to take a hit in your profits if you're going to share the cake."

Consistent support​

However, Fuller's chief executive Simon Emeny hit back. "I'm fascinated to hear it, I don't think it's true.

"I think regional brewers give an enormous amount of consistent support to their tenants in terms of investment in their pubs, the rent that they charge and we have some fantastic beer. It seems to be an offer that tenants enjoy having."

Get rid of the divers​

Lincolnshire-based brewer Stuart Bateman was equally dismissive. He stressed that his company looks at the total fair rent for a pub as a whole — combining the dry rent with the wet rent — and when that level is reached beer discounts increase.

"Our payable rents are moderate and so are our discounts, for example £50 on Batemans XB up to £90 on some popular packaged products. Once the rent reaches the fair total rent level, an additional £100 per barrel discount is paid on all products.

"If the level of purchases is not reached there is no penalty — it is one of the great things about the model for tenants.

"It seems fair to me; it's just a case of how you operate the model and how transparent you are.

"I don't like footballers who dive in the penalty area, but that doesn't mean the sport should be banned — just get rid of the divers."