Access strictly forbidden…

It's down to the licensee and the barstaff to sell the products - so surely it's common sense that they have access to a responsible brand owner?...

It's down to the licensee and the barstaff to sell the products - so surely it's common sense that they have access to a responsible brand owner? Well, you'd think so, writes Adam Withrington, but that's not always the case.

The changes in the industry over the last 15 years have been well documented. The 1989 Beer Orders, for better or worse, have changed the pub market beyond all recognition.

However, while issues concerning rents, pricing and drinks ties are of massive importance, something else has been ignored.

Since the restructuring of the industry many people at the top of the business - be they retailers or brand owners - have forgotten the importance of proper brand communication with the licensee.

In the "old" days, when the big brewers owned the lion's share of Britain's pubs, brand owners and licensees had a good relationship, with sales staff or brand teams regularly visiting pubs and trying to improve the service they offered.

However, the restructuring has meant there is no need for these middle men. Brewers and drinks companies sell direct to the pubcos and they onto the licensees, meaning there is hardly any contact between brand and licensee. Pete Harrison, licensee of the Unicorn in Leek, Staffordshire, and previously an Enterprise tenant, explains: "When I started off my Enterprise lease seven years ago I used to buy my beer directly from Bass, who would then invoice Enterprise and they in turn would invoice me.

"But this all altered over time, meaning Enterprise bought everything from Bass and we had to go to the pub company for our beer. So we just had no more contact with the brewer."

Now, while this may make for a more efficient system, it has removed a vital cog in the sales network. In a pub, no form of marketing works better than a recommendation from a member of staff - they are the people whom consumers trust.

And yet barstaff are not being given access to the people who can improve their brand knowledge.

Communicating through advertising

This has meant that licensees have lost their affinity with many brands. The only contact between the two now, in many cases, is through television advertising - hardly the most personal of mediums.

The lack of the personal touch does not seem to motivate licensees to sell the brand, as Tracy Bird, licensee of the Newman Arms in London, points out.

"I miss the days when we would get a brewery rep come visit us and just ask 'how are sales going? Is there anything we could do to help you?' That kind of personal touch is missing now. Visits like that from brand owners would generate interest more in their products and in selling them," she says.

Many brand owners have been quite clear in telling me that responsibility lies squarely with the pubcos. They believe not only has consolidation of the pub market created this problem, but in fact pubcos actually encourage it.

Well-placed sources at two of Britain's big five brewers told me that some companies actively discourage brand sales teams from going into pubs and talking to licensees.

Other brand owners have also told me that there are major pub groups who forbid them going into pubs to talk about their products and that threats are even made. No one feels comfortable enough to say this on the record. No doubt they are aware that such a remark would upset the applecart and will threaten any future listings for them.

However, Pete, who was an Enterprise licensee for five years, says that he was told by drinks reps that this kind of thing did go on. "There were a couple of times I met reps from spirits companies, like Bacardi," says Pete.

"I told them who my pub was owned by they said that they had to leave as they had been warned off. And the joke is I wasn't even tied for spirits, so they had no right to do that."

Brand owners blinded by the big boys

So why would pubcos do this? Well, the answer for tenanted pubcos would appear to be simple: buying out. Giving brand owners free rein in this very competitive marketplace could encourage their licensees to buy out of any tie agreement.

And yet this really isn't the main reason. A major frustration for all companies with pub estates is that they feel brand owners see the drinks market as a numbers game. It is all about selling as much product and getting as much visibility on the bar as possible - regardless of the effect that might have on the overall business of the pub.

Guinness is a brand that is well known for its tenaciousness in getting prime spots on bar tops. One of the top drinks buyers at one of the big pubcos told me: "They have their own technicians who are all trained in merchandising. They go in and ensure their fonts are put in the best place. Even if it has to go on a T-Bar they find ways of putting fonts on it that make it stand out above everything else.

"This does nothing to help retailers. It's all about selling more Guinness. It's not about getting more people into pubs, it's about getting people who are already in the pub to switch brands."

Added to this is the sense that the growth and consolidation of pubcos has led to a belief that selling to them is the be-all and end-all of your brand. Pete says he receives even less attention from reps as a freehold licensee than he did as a tenant for Enterprise. "These guys are just too busy seeing the pubcos to come and visit us," he comments. "I actually phoned up a Guinness rep last year to ask for some St Patrick's Day point-of-sale material and they said they only send stuff out to the pubcos now. He actually said to me: 'you're too small to bother about'. We don't seem to matter - we have seen two spirits reps in the last two years here."

Andy Slee, licensed trading director for Coca-Cola Enterprises (CCE), says ignoring the freetrade is just plain stupid.

"I think brand owners can have a tendency to get blinded on this matter," he says. "If you look at the way the licensed retail market is split up in soft drinks, while 28 per cent of sales are in tenanted pubs, 20 per cent are in independent pubs. You ignore this market at your peril. It can really pay dividends."

Brand owners' keenness to focus on the head offices of the big pubcos has inevitably meant that brands have trimmed down on their sales teams. The reason why licensees see fewer sales reps is that there are less of them.

A spokesman for Scottish Courage, brewer of Foster's and John Smith's, confirmed that in the last five years the company's sales force had dropped from around 600 people to just over 400.

"In terms of big pubcos our focus is much more on the relationship with the customer at head office," he admits. "This is different in the independent freetrade, where we have a much more visible sales force."

How licensees can benefit

There are some companies out there who are switched on to this way of thinking. Greene King brewing company has been one of the big successes in the industry in the last three years. It has managed to grow sales of its core beer brands in some of the biggest national pub groups.

And it has done it by visiting individual outlets in, for example, the Spirit Group and Mitchells & Butlers (M&B) estates, and targeting barstaff and managers with brand information. It has got together with selected M&B venues and designed bespoke dispense equipment for its IPA and Old Speckled Hen brands. Plus it was involved in a number of visits to Spirit outlets to talk about promotional activity surrounding St George's Day.

CCE's Andy believes that face to face marketing with licensees is absolutely crucial and sees one of the company's most recent launches as a case in point.

He believes that the early success of its new juice brand Deuce was down to more than just a motivated sales team. "It was literally a matter of getting people over the threshold of pubs and talkin