The traditional pub happy hour is under threat as criticism increases over various price promotion strategies. Michelle Perrett investigates further
The future of pub happy hours and cut-price promotions has been called into question this month following criticism on two fronts.
The European Union voted this week to progress with a directive to ban price-led promotions on alcoholic drinks following concern they are anti-competitive. This stems from fears that giant pub operators are, in many cases, able to sell beer much more cheaply than individual tenants or lessees because they buy in bulk. There have also been cases where some managed houses are selling beer to consumers at cost price or even at a loss just to get customers into their pubs.
Tony Brooks, director of the Head of Steam pub group, thinks legislation would be a good thing. He has attacked the pricing strategy of some of the larger operators and claims they are using "classic capitalist tactics to force small independent operators out of business".
On the other hand, a side effect of cut-price promotions is that customers may also be tempted to drink more and other industry critics have claimed that happy hours should be restricted on the grounds that they promote binge drinking and public disorder.
Tony Payne, chief executive of the Federation of Licensed Victuallers Associations, agrees that price promotions can lead to disorder but wants publicans to retain their freedom to offer sensible promotions if they choose.
"We think licensees should be able to set their own prices," he said.
But he added that the European proposals were aimed at the larger players who offer very low prices. "We don't think that the legislation will affect small licensees as they do not get the right wholesale prices to be able to offer special deals," he said.
This double-pronged attack on cut-price drinks promotions comes despite the fact they are a staple tool used by the industry to boost custom during quiet trading periods and raise product awareness.
The British Beer and Pub Association (BBPA) has acknowledged past criticism of happy hours and irresponsible promotions and recently released a guidebook for licensees offering advice on how to run sensible promotions (see below). Among other things, the association recommends happy hours are run over a longer period of time to discourage binge drinking and disorder at a time when the trade is under scrutiny by ministers considering plans for the relaxation of licensing laws.
But the BBPA said it was concerned by the European proposals, since it felt promotions encouraged competition between outlets rather than killing it off.
Spokesman Mark Hastings said: "The European directive is driven by concerns over promotions and price, which is the essence of competition. It seems bizarre that someone would want to control price to increase competition."
The European proposal was put forward by a Scandinavian Green MEP, Heidi Anneli Hautala. It is believed to have received support from some British Labour MEPs although, even if it is eventually passed, it will be some years before it comes into force.
Crime prevention charity the National Association for the Care and Rehabilitation of Offenders (NACRO) broadly supports the directive, although its arguments stem from concern over disorder rather than competition.
Dr Marcus Roberts, spokesperson for NACRO, said: "Cut-price drinks promotions where people have only a short space of time to drink at a reduced price can encourage binge drinking."
But the charity says it is not against price promotions in general but rather the drinking culture that is promoted by happy hours.
Dr Roberts added: "Time-limited promotions that tend to be early in the evenings where people drink more than they would at times when they would not normally drink, can encourage disorder."
The Campaign for Real Ale (CAMRA), the champion of real ale enthusiasts, is against the European directive. It claims consumers benefit from promotions, provided they are organised sensibly.
Iain Loe, spokesperson for CAMRA, said: "We believe in competitive pricing but any promotions need to be sensibly organised, perhaps to reward regulars at a pub."
Pub operator JD Wetherspoon is one of the companies that has faced criticism in the past over its policy of selling selected beers very cheaply. Some licensees have complained that their own businesses have been hit by the pricing and claim they are unable to buy their beer cheaply enough to compete with these discounts.
But Wetherspoon spokesman Eddie Gershon said the company was not currently concerned about the possible new European legislation and felt price promotions worked well if run properly.
He said: "Pricing is an issue but we feel that it is down to how a pub is run. Lots of things come out of Europe that are pie in the sky."
The pub industry has been heavily criticised in the past for being at the root of binge drinking and public disorder in this country.
Only this week, police in Sunderland condemned a cut-price drinking war between local bars as "irresponsible", indicating that it could lead to an increase in crime and disorder.
The Association of Chief Police Officers (ACPO), said that it does not have any national policy with regards to happy hours and cut-price drinking promotions but would object at a local level if it felt promotions were adding to violence.
A spokesman for ACPO said: "We expect licensees to use common sense but of course we will be interested if there is a particular pub which attracts binge drinking and unruliness."
So the general feeling seems to be that the threat from Europe, although remote at the current time, has acted as something of a wake-up call for the trade. The police are not afraid to step in if they feel a promotion is adding to disorder problems and the government remains ever vigilant as it slowly pieces together its ideas on licensing reform.
At a time when the image of the pub trade is of paramount importance, the question is can licensees afford for promotions and price discounts to get out of hand?
The BBPA guidebook
BBPA advice for pub owners and licensees:
- provide food and snacks during early evening happy hours as people are likely to be drinking on an empty stomach
- stretch happy hours over a longer period eg two hours. This may discourage people from binge drinking
- avoid discounts linked to unpredictable events, such as goals during football matches
- avoid drinking games that may have a speed incentive
- entry fees entitling customers to free or reduced price drinks should be avoided
- include soft drinks during happy hours
- promotional activity for alcoholic drinks should comply with British codes of advertising and sales promotions and with relevant parts of The Portman Group code of practice.
Related articles:
Police condemn Sunderland's cut-price drink war (19 June 2002) EU to call time on pub happy hours? (18 June 2002)