ties

On my journey into brewerying I've encountered a frustrating situation many times. I've gone into a pub that proclaims to be a free house but in reality is owned and leased by a pubco. In my experience Enterprise seems to be the pubco that does that most frequently in this area. I'm not going to name specific houses because often the landlords are as frustrated with the situation as I am but next time you're in what you think is a free house ask them - you might be unpleasantly surprised.

The really painful thing is that SIBA, the Small Independent Brewers Association, seems to me to be in collusion with the likes of Enterprise in an effort to screw over the landlords. I can sell to an Enterprise pub but only if Enterprise allow it and only if I use SIBA DDS (direct delivery system). Under that system I would sell and deliver beers to the pubs but invoice Enterprise. Enterprise will then invoice the pub, often with a 100% mark-up. To me that seems utterly obscene. I'm not sure how SIBA think this arrangement is benefiting its members as Enterprise makes vastly more profit from each transaction than the brewery. Yes, I know, the landlord was not forced to sign the contract just as I'm not forced to sell to them.

Things, however, might be about to change.

I was at a mate's wedding last weekend and got talking to another guest over a pint or two of my beer (he was very complementary about it before he knew it was mine). He works for a large and well known brewer in Scotland that also owns a large estate of pubs. They're worried about declining sales and are looking for ways to boost their turnover. They've identified a desire within the real ale community to drink local beers and, even though they are more well known for other drinks, they are taking steps to encourage people back into their pubs.

One of their solutions is to send reps round to all of their tied houses to examine the quality of service and product and offer coaching where necessary. Another is to examine the range of beers available and encourage the landlord to form direct relationships with local breweries. By encouraging diversity they hope to encourage people to return to the pubs. The value of the transactions with a local microbrewery will be offset by the extra revenue generated by having busier pubs in their estate.

If this proves successful for them then it could pave the way for other pubcos to adopt the same strategy. Now wouldn't that make things interesting?