IT'S BEEN a busy few months for Greene King and one in which the timing of Wetherspoons' brutally-budget 99p-per-pint price promotion on its IPA brand couldn't have landed with crueller irony.
No sooner had the Suffolk brewer relaunched the brand in November 2008 with a focus on provenance, heritage and quality, than the managed giant included it in a pricing blitz. It is hard to avoid the conclusion that selling the beer at such a low price in more than 700 pubs around the country cheapened IPA's image.
It certainly made it tough for Greene King tenants and freetraders to sell IPA at a price befitting the quality beer that was being marketed when consumers could buy it for less than half that on their local high street.
Now, with Greene King making a fresh attempt to consolidate the brand as one of the top ales in the country through a new high-tech font, Greene King Brewing Company managing director Justin Adams is ready to look back on IPA's recent history. He casts a light on the natural conflict of interest that can exist between a supplier and a retailer. The former wants to foster a brand image that justifies profitable pricing, the latter is desperate to drive footfall any way it can.
Big issue for the trade
There is nothing illegal about a pubco selling drinks at a price below what it buys them for, but there's plenty illegal about a company refusing to supply it. Competition rules are clear in saying you cannot discuss price, Adams says.
The whole thing is likely to become a bigger issue across the board as big managed pubcos that are able to play the discounting game are increasingly tempted to do so in these tough economic times.
Adams is phlegmatic about a saga that only ended in February, with Wetherspoons swapping IPA for another Greene King beer - Ruddles Best - in the 99p deal. "We've spent many, many years and many millions building up IPA as a brand and therefore naturally we were sensitive about the impact of promotion on the brand's equity," he says.
Observers won't have missed some of these millions being spent recently. Greene King is currently trialling in 45 pubs in its estate a dispense system that allows consumers to choose the style in which their IPA is poured. The 'Revolution' font means they can have it with a tight, creamy head characteristic of beers in the North of England, or with the looser, fizzier consistency favoured in the South.
The aim is to roll Revolution out to 2,000 outlets or more by the end of the year, supporting it with point-of-sale (PoS) material with the strapline 'Taste the Revolution in Fresh Cask Beer'.
Of course, the conventional handpull will continue to be made available - and this, too, has benefited from a barrelful of marketing initiatives. Late last year Greene King relaunched IPA with a redesign - its first in four years - focusing on provenance. A new pumpclip, branded glassware and PoS material were distributed to IPA's 12,000 regular on-trade stockists.
Greene King followed this up in February by becoming the first brewer to have its entire range of beers accredited by farm-assured body Red Tractor, which gives marks of approval to products that can guarantee the origin of their ingredients and ethical production methods.
All this effort on strengthening the IPA brand contrasts with the move by Wetherspoons to deep discount it.
The unfortunate timing probably contributed to the fact that Greene King has taken an unusual stance on the Wetherspoons story. Out of all the brand owners involved, it stood out as being almost unique in its willingness to speak out.
IPA was far from the only big name involved. Bottles of San Miguel, a brand now in Carlsberg's stable, were also on sale for 99p across Wetherspoons' estate, Blossom Hill Rosé wine for £4.99 a bottle, and other national beer brands were regularly subbed into the 99p offer when IPA ran out.
However, it was only senior figures from Greene King who boldly stuck their heads over the parapet to talk to the press about IPA's involvement. Similarly, nobody batted an eyelid when Wetherspoons removed IPA from the 99p offer to appease Greene King, but replaced it with the same brewer's Ruddles Best on the same deal.
An engaged brewery
This highlights two things: firstly, the regard with which IPA is held both within Greene King and nationally. It is Greene King's flagship brand, placed by Nielsen at the top of its table of the highest-selling standard ales (defined as products below 4.1 per cent ABV), and one of the most high-profile names in beer among the general public.
"Ruddles Best is also a fine beer, but it's not a brand that we're quite so sensitive about. It is a substantially smaller brand and has a different image - a reputation for value," Adams explains.
Secondly, it shows how engaged the brewery and its managing director are with the crucial issue of pricing and promotion.
Greene King itself last week announced a deal for its tenants under which it will subsidise them selling IPA for £1.99 a pint. Although a million miles from the severity of the Wetherspoons deal, it confirms the company sees discounting as a valid tactic.
While many flee from the controversial hot potato of discounting, Adams is matter-of-fact about it. "There are certain pubs where pricing matters a lot, depending on the kind of consumers you are trying to attract," he says. "It's difficult to say whether I think it's a good thing or a bad thing. It's a reality."
One thing he finds it easier to comment on is that Wetherspoons "operated with great integrity throughout". He is admiring of the pubco as a retailer and sees its promotional tactics as entirely justified. In Adams' opinion, Wetherspoons is entirely blameless for the fact that the promotion was not good news for Greene King.
He explains: "There are occasions where a retailer's agenda does not necessarily align itself with a supplier's, but you have to work through that. That's what business is all about." He even goes so far as to suggest "You could argue that it's done the industry a favour, bringing people out onto the circuit. The reality of this is a retailer pursuing a strategy to get people off their sofas and into pubs," he says. "That strategy is fundamentally right."
Adams is, like all in the licensed trade, watching with interest to see whether a scenario of minimum pricing on alcohol ever becomes reality.
Until such a point, Greene King will have to maintain its admirable diplomacy in the face of brand-damaging promotions by the pubs it supplies, and its innovative work in building up IPA despite that.
Cask Ale Week
A crucial platform for IPA is Cask Ale Week (April 6 to 13), which begins today. Greene King has been heavily involved and Adams sees it as the perfect example of an often fragmented industry working together for common good.
While Cask Marque has co-ordinated the initiative, Greene King is one of many brewers to have organised activity to drive cask sales in pubs during the week of promotions.
"We have shown that where necessary we have the capability to all work together," Adams says.