On-trade may shrink up to 20%, predicts Camden Town MD

By Emily Hawkins contact

- Last updated on GMT

Optimistic approach: Camden Town Brewery's managing director Adam Keary says the beer maker is preparing for pubs to reopen in early July
Optimistic approach: Camden Town Brewery's managing director Adam Keary says the beer maker is preparing for pubs to reopen in early July

Related tags: Coronavirus

Camden Town Brewery's managing director Adam Keary has said the beer maker has been “having to have a stab in the dark” as its pub customers remain confused about how they will be allowed to reopen.

The north-London based brewery decided to brew under the assumption pubs would be able to open on 4 July, the earliest day the Government said reopening would be possible, several weeks ago - but it has not confirmed a date yet despite industry calls.

Keary said: “I think we all understand that [4 July] is a moving date and if the virus changes, we understand that that might move.

“What I think is frustrating from our side is that actually what's going to happen on that date is still really unclear.”

He said the brewery would like the Government to clarify the conditions under which pubs will open and shed light on issues such as whether only pubs of a certain size will be allowed to open, if a 2m distancing rule will be in place, and whether staff will be required to wear PPE.

Keary said: “All of those things are going to come together to make a pub decide whether it is viable or not for them to open and so whether they will buy beer from us."

Lack of clarity

“We are sort of having to have a stab in the dark, which is pretty challenging,” Keary continued, adding that he is also wary of the stand-off situation between many pubs and their landlords, highlighting the lease forfeiture moratorium ending at the end of the month.

“Even if a business can come up with an idea of making whatever the new conditions of opening are work, they may well be facing so much debt as we hit the 1 July that no business model is going to make it worthwhile."

Cash flow 

Keary added: “All these calls for a national time out really need to be addressed, very quickly, otherwise there is a financial issue that pubs won't be able to open because of cash flow.”

The director predicted that the on-trade could shrink by between 10% and 20% given the difficulties many operators are bracing themselves for.

He said: “As a business, prior to coming to this, we were 85% pubs or the on-trade and 15% off-trade. Clearly that has changed right now but I think going forward I would imagine next year we would be much closer to 30/70, or maybe even higher, towards the supermarkets.”

Keary added that many consumers will have got used to paying cheap prices for beer to drink at home and may be reluctant to visit pubs. “From a financial perspective, from a personal safety perspective and then also from a routine of not drinking in pubs,” he said.

Optimistic view

However, the brewery is hoping to support its pub customers in the months ahead.

Beer will go into kegs towards the end of this week in preparation for a July reopening. The brewery has un-furloughed its delivery team and all of its dispense technicians so they can support venues with line cleaning and other technical issues that may have arisen during the closure. 

Keary said: “We're taking an optimistic view and thinking if we don't get ourselves ready and have everything in place then it's definitely not going to happen. So if we take the approach of 'let's have it all in place' then it should happen.”

Related topics: Beer

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