It's a decade since a group of small pub operators decided to form the ALMR. Kerry Rogan went along to the 10th birthday celebrations
Ten years ago the pub industry was very different from how it is now. The big brewers were recovering from the effects of the Beer Orders and from the rubble of their former pub estates a number of smaller pub companies were being formed.
A group of these new pub operators, realising there was no trade organisation to put their views across, got together over lunch and formed the Association of Licensed Multiple Retailers (ALMR).
Now the ALMR has more than 90 pubcos among its members, representing 26,000 pubs. It lobbies government on various important trade issues, such as smoking and licensing reform, and is widely respected.
A decade after its humble beginnings, the great and the good from the pub industry gathered to celebrate the ALMR's 10th anniversary.
Culture secretary Tessa Jowell gave the keynote speech at the event. She joined industry experts who together gave a thorough appraisal of the last 10 years in the pub industry - covering managed houses, pubcos, the City, licensees and customers - and looked forward to what they thought could happen in the future.
John McKeown, who chaired the discussion, said: "Ten years ago the big five owned most things. That has changed dramatically with only one still a brewer and retailer." He said that given the way things are going, in another 10 years the industry could be owned by the "triumvirate of Ted Tuppen, Hugh Osmond and Tim Martin" with beer being supplied by "InterAfricanScotCoors".
But on a more serious note, the speakers all provided an extremely valuable - and entertaining - analysis of the licensed trade.
A selection of their views appears on this page.
Peter Hansen
It is a well-documented fact that individual pubs have changed hands many times over the past years as pub companies are bought and sold with startling regularity.Consultant Peter Hansen described one such pub - Bierrex in Putney - which he often passes.
The pub was owned by Pubmaster and was then bought by Century Inns in May 1997. In March 1999 it was sold to Enterprise which sold it to Bass in August 1999.
It was then sold to Nomura in March 2001 and from Nomura to Cinven in March this year. Now it belongs, once more, to Enterprise Inns and - as Mr Hansen said - who knows which company will own it next.
Based on hindsight, what he has seen happen over the years and his opinions of the pub industry over the last decade, Mr Hansen came up with what he sees as destruction strategies for the trade - and successful creation strategies.
Destruction strategies:
- Expand a brewhouse
- Invest aggressively in food pubs
- Become a "me too" brand on the high street
- Expand your portfolio of brands from 12 to 18 (or more)
- Spend big money on refurbishments.
Creation strategies:
- Acquire tenanted and leased pubs and stamp out overheads
- Buy a large managed estate and take the chequebook away
- Convert managed pubs to leased
- Close the brewery and action the pub estate
- Buy a regional brewer and close the brewery but keep the beer brands.
Mr Hansen's predictions for the future were equally controversial. . .
- The next five years should be great for the licensed trade
- We will see the final exit of a lot of big players with big cheque books
- Interest rates will go lower still
- We will see a squeeze in licences - which means the value of licences will go up
- Enterprise will go back into managed houses. It will buy a business that's got both managed and tenanted pubs, convert most of the managed outlets and quietly experiment with the rest.
Phil Dixon
Phil Dixon is well known for his work with the British Institute of Innkeeping, fighting the licensee's corner and improving the standard of training and recruitment.
He said the attitude of many pub companies in the 1990s towards their staff, was "just what can we get away with?".
That attitude had its consequences and the pub companies acquired "the ethics of the estate agent".
The pub trade had eight times the national average for business failure. In 1989, Marstons had a waiting list of people who wanted to take over one of its pubs. In 1996, he said, according to figures in The Publican Newspaper, Marstons had 42 per cent staff turnover in a year.
He said recruitment problems stemmed from attitudes to staff. There was an uncertainty - managers did not know who they'd be working for next year - and although professionalism was demanded, there was a feeling of exploitation.
He used the example of one live-in manager who, despite working 72 hours a week, was paid just £9,000 a year.
"And you wonder why you can't get good staff," he said.He said standards were also poor - with as many as a fifth of pubs being unappealing to the majority of drinkers. He said that was an issue that needed addressing.
He said although companies such as Unique, Punch and Enterprise were addressing the training issue, there were still people being put through no more than a one-day National Certificate for Licensees course before taking over a pub.
He said lessees and tenants were worried that "if I'm too successful the company will take it back off me" and that pub companies had to address that issue and help tenants become a success.
Phil Dixon's predictions:
- Service levels will improve
- Real ale needs to be improved - premium-packaged spirits have taken a whole generation away from beer and have weaned them away from traditional products
- There will be a more mobile work force
- JD Wetherspoon will continue to survive and all its outlets will take the euro by 2005
- Companies will leave tenants and lessees enough money to invest in the business
- There will be licensing reform.
Chris Hutt
Chris Hutt, managing director of Wizard Inns, is clear about where he stands on licensing reform.
"You could write a new licensing bill on the back of a postcard," he said. "We want dual licences, permanent hours changed so they move to 1am on Friday and Saturday and suitable protection for people living next to pubs so they don't get unduly disturbed.
"That gives us 95 per cent of what we need and if that were to be put on the table, 95 per cent of us would take it."
Mr Hutt has grown the unbranded Wizard managed estate to 48 outlets and is critical about branded pubs.
"I have come to dislike them," he said. "There's space for no more than five brands in the long term. The roll out of branded chains represents a lemming-rush to oblivion.
"Over the next few years the merits of unbranded, managed houses will be seen again. In my view about one in ten pubs are best operated as managed houses."
Along with the rise in pub brands and the return to tenancies, Mr Hutt said there were four differences between the pub trade now and 10 years ago:
- cheaper money and a stable economy
- beer is cheaper
- there is more property available
- new licences are more readily available than was the case then.
He said: "I predict a bright future for operators - and the ALMR."
John Grogan
In recent months licensees, trade organisations and pubcos have won several battles.
John Grogan MP, a member of the All-Party Parliamentary Beer Group, congratulated the trade on its success in lobbying for the drink-drive limit to remain the same and for a 95 per cent liquid pint law to be introduced - instead of a 100 per cent law.
But h