Are guest beers key to boosting pubs' fortunes?

posted on 04/07/2013 09:05:04 by Dan O'Sullivan

Would being allowed to have one guest beer make a difference to the fortunes of pubs that are obliged to sell drinks prescribed by powerful suppliers?

Pint of the unusual?: For some pubs guest beers are off limits - but could decreasing suppliers' powers give landlords a much-needed boost?

There are plenty of challenges facing Britain's pubs in the current climate, with the economic downturn and cut-price supermarket deals being just two examples of a wide variety of factors threatening many publicans' livelihoods.

As the press paints a bleak picture of closures throughout the country and wooden boards go up over the windows of a growing number of locals, it's fair to say that finding a way to buck this downward trend is a tough task.

This isn't the sort of problem you can find a solution to overnight - unfortunately, no magic wand exists to send Brits back to the pubs in their droves. What's more, smaller pubs may find themselves increasingly isolated as long-established chains prove more resistant to the ongoing financial strain.

No guests allowed

Enter a survey recently conducted by the Federation of Small Businesses (FSB), which revealed there is overwhelming support for the idea that publicans who are tied to major pubcos - that is, the country's biggest pub companies - should be free to stock a guest beer of their choosing.

Currently, publicans who rent from these pubcos are obliged to buy and sell specific types of beer. Almost 90% of respondents to the FSB poll claimed that they are paying an inflated price for their barrels as a result of their ties to big firms.

Significantly, 100% of the FSB publican members who took part in the survey said they feel they should have the right to offer just one guest beer. It seems that everyone is prepared to put their faith in the notion that such a step could have a positive impact on business.

Happier customers

100% of the FSB publican members who took part in the survey said they feel they should have the right to offer just one guest beer - it seems everyone believes such a step could have a positive impact on business

And it's not hard to understand why there is strong support for this kind of agreement - the study also found 87% believe the move would enable them to respond to customer demand more effectively, while 98% said they'd be better placed to compete with non-tied pubs in the local area.

While it's hard to tell just how effective the guest beer measure would be in boosting publicans' fortunes, the overwhelming backing for the idea indicates a belief that it could only have a positive impact.

The notion is clearly being given some serious thought. The government recently held a consultation on the proposal, with one eye on introducing tougher regulations for the UK's largest pubcos.

Yet as publicans await the consultation's findings and continue to call for greater freedom from powerful suppliers, they should be encouraged to explore other avenues that might help boost profits and drive business growth.

Multiple strategies

Getting people through the doors and making sure they're likely to come back is no easy task - but business growth can be as much about reducing costs as it is increasing revenue.

On this blog we recently looked at the value of switching card payment providers to reduce transaction fees and save money. With many publicans opting to offer customers the chance to pay by card in a bid to increase spending in their establishment, ensuring they are using the cheapest facility available is an easy way to make a significant saving.

It's clear that Britain's landlords need many strategies to improve their potential for profit and safeguard the future of their pubs - introducing guest beers and reducing their card transaction fees could be two effective weapons in their arsenals - as well as seeking better deals on their energy contracts and business insurance cover.

Image credit: Bernt Rostad

Dan O'Sullivan

Dan O’Sullivan is Make It Cheaper's Web Content Manager, which means much of his time is dedicated to ensuring we have plenty of online material to help business owners understand the energy, insurance and telecoms industries. With years of experience working alongside SMEs, Dan is committed to making life as easy as possible for smaller firms. You can email Dan at dan.osullivan@makeitcheaper.com

Read more articles by Dan O'Sullivan
Dan O'Sullivan on Google +