Protesters from the Campaign for Real Ale (Camra) brought a pub sign to Parliament yesterday to lobby for an end to annual above-inflation tax increases on beer.
Camra believes the beer duty escalator, which will raise the price of a pint by 2 per cent above inflation each year until 2014, is contributing to the closure of thousands of pubs.
It\’s the damn smoking ban.
The beer tax rise affects both on and off sales. The smoking ban obviously doesn\’t. And one of the things we are seeing is a sectoral shift away from pubs and onto off.
And, as both on- and off-trade beer pay exactly the same duty for beer of the same strength, you could argue that duty increases disproportionately affect the off-trade.
The Camra fuckwits supported the pub smoking ban. Now they whine about pubs closing.
Correlation is not causation. Provide some figures showing exactly how many people say they have cut or reduced their pub-going because of the smoking ban, or STFU. Explain why the numbers visiting pubs and restaurants is still falling, five years after the smoking ban, if it’s not the increasing costs of going out. And read this, which makes it perfectly plain that higher taxes, higher prices and the competition from cheaper supermarket booze is what is causing the fall in on-sales and the closure of pubs. http://finchannel.com/news_flash/Travel_Biz_News/120044_Average_restaurant_spend_per_head_up_to_%C2%A317.06_but_frequency_of_visits_falls/
@Martyn, why is it your or any other prodnose’s business what consenting adults do on private property?
Martyn, you should know better than to ask for supporting evidence from people who have already closed their minds! An intelligent question of an unintelligent person merely makes you One Of Them!
It’s also the rip off Pubco’s that are killing the market by forcing landlords to pay huge rents and locking them into buying beer at twice market rates.
Having supported the smoking ban, presumably to kick the lager-swilling working class out of their pubs, CAMRA are just not going to acknowledge the elephant in the room.
Alcohol duty has risen consistently through my lifetime, but consumption has not consistently fallen, as you would expect if price was the sole determinant of going to the pub.
Martyn
Correlation is not causation. Provide some figures showing exactly how many people say they have cut or reduced their pub-going because of rises in alcohol duty, or STFU.
You will also have to explain why pubs were thriving in previous decades despite consistently rising alcohol duty and above inflation price rises.
Or, as you say, STFU.
@Martyn,
Provide some figures showing exactly how many people say they have cut or reduced their pub-going because of the smoking ban, or STFU.
I don’t have that, but Tim Martin (who is writing about the effects of alcohol duties in that piece that you cite) knows the effects of smoking on pubs because Wetherspoons were planning on going smoke free unilaterally, and then did an experiment on a few pubs and found that takings dropped by (IIRC) around 10%, and so abandoned the project.
Don’t confuse Martyn with the evidence he asked for!
“Explain why the numbers visiting pubs and restaurants is still falling, five years after the smoking ban, if it’s not the increasing costs of going out.”
That’s not hard to do at all. When the smoking ban came in, it wasn’t just a matter people stopped smoking whilst drinking. They didn’t anyway. They simply went outside for a puff. What happened was it reduced the attractiveness of the pub as a social meeting point. Social habits are very ‘sticky’. It took some time for alternative social habits to develop. Now those alternative habits are not only pulling smokers out of the pubs but their pals who don’t smoke. Those who argued this wouldn’t happen ignored the factor, pubs were not simply a place to consume cigarettes & alcohol
Social habits are sticky but they are easily broken too. It only needs a few key people in a pub group to stop going and the rest will fall away too as there is nothing to attract them to the pub. If those key people are smokers, then the group might disband. It might also regroup elsewhere in a Smokey Drinkey. In any case, the pub could lose out from just one person not going to the pub anymore.
There’s also the minor issue of an ongoing financial crisis for the last 5 years. Not that that could have any impact on the amount people spend in pubs.
JamesV – it’s not noticeably affecting other leisure pursuits, is it?
why is eveyone picking on Martyn for asking a perfectly reasonable question? I see that a lot of pubs have converted to restaurants. I notice that the price of a pint in London is about £5 in a pub v £2.50 from a supermarket and wonder whether this kind of differential has had an effect. And no one has produced anything other than anecdata, including me.
//person who does this data for a job//
It’s absolutely true that the smoking ban led to an immediate decline in sales in pubs, bingo halls, pool halls, and pretty much every other smoking-focused establishment you can think of. The economy was still doing fine, restaurants and gyms showed growth, while very specifically formerly smokey establishments fell (although the single industry most screwed was dry-cleaning).
However, it’s a massive and ridiculous lie to pin the ongoing fall in pub sales on that.
Pubs have been in decline since the 1980s in their share of UK drinking (Christ alone knows why Rob’s pretending otherwise), and UK drinking has been falling since the mid-2000s. So while the smoking ban was an unwelcome one-off hit, it is not responsible for last year’s decline, or for the decline in 1995.
All spending on leisure in the UK has indeed fallen in the recession (Christ alone knows why Julia’s pretending otherwise), and that’s impacted the on-trade more than the off-trade, because the off-trade is vastly cheaper (Diogenes: a pint is gbp1 from a supermarket, you’re being shafted.)
Overall, Tim’s point is right: in a pub, you’re paying about 80p a pint for beer+beer tax+VAT, and about gbp3.20 for the pub markup (and tax on it). In Tesco, you’re paying about 80p a pint for beer+beer tax+VAT, and about 20p for Tesco’s markup (and tax on it).
If you raise excise taxes so that the price of beer (including VAT on the beer component) goes up by a quid, then a pub is now gbp5 instead of gbp4, and Tesco is now gbp2 instead of gbp1. You’d have to be the most economically illiterate maniac to believe this will hurt pubs more than it’ll hurt Tesco.
@PaulB,
I wonder if it could hurt pubs more than Tesco. If the margin – the drinkers prepared to pay £4 but not £5 in the pub is large enough, they will shift from pub to Tesco, despite that going up to £2.
Speculation from our economics guru host is explicitly invited.
“guru”
Really?
One of the major reasons that pubs are closing, that doesn’t get much attention, is that during the property boom a lot of the pub chains bought too many pubs- under the belief that even if they couldn’t make a profit running them the values of the bricks and mortar would rise and they would make money overall.
Ross – indeed – I think the breweries and pub chains bought into the belief that property was a safe bet and hence all the mergers etc.
john b,
However, it’s a massive and ridiculous lie to pin the ongoing fall in pub sales on that.
Pubs have been in decline since the 1980s in their share of UK drinking (Christ alone knows why Rob’s pretending otherwise), and UK drinking has been falling since the mid-2000s. So while the smoking ban was an unwelcome one-off hit, it is not responsible for last year’s decline, or for the decline in 1995.
True, there has been a long-term decline in pub sales.
But, I don’t think it’s impossible that we may still see more pub closures because of a secondary effect of the smoking ban – many pubs in order to survive have switched their emphasis from food to drink, but this then creates a problem of oversupply in the dining market.
@ john b
You’re making the assumption;
a) people go to pubs to buy alcohol
b)that is price sensitive
There’s never been the slightest evidence to support that. For a start, the restricted opening hours for years meant either the punter drank at the pubs’ convenience or paid a lot more to drink out of hours. The scrabbling around that used to go on to get after hours drinking at any price would indicate not. There’s never been any relationship between the popularity of venues & price. There wouldn’t be any wine bars/disco pubs if there were.
I think the growing drinking of wine has something to do with it.
BiS: doesn’t that support the point that Tim was making and that I was backing up – which is that taxes are unlikely to affect pub consumption, because price sensitive drinkers are already paying a quid at Tescos?
@john b
Yes & no. The shift away from pubs is, as Tim says, the result of the smoking ban. The theory of the smoking ban was that pub goers would forgo smoking. What has happened is a lot of those who want to smoke & drink have left pubs altogether. As any pubgoer could have told the anti-smoking perverts, given a choice between no social life or tobacco smoke most non-smokers opt for the former.
I know if I was still living in a village out in the country, it’d be open night round my place most weekends. Used to be after the pubs shut anyway. I’d probably consider extending into the week. Making a fortune. There’s other ways of getting money than a payg bar. I presume other people would do the same thing. Are doing the same thing.
The error in thinking was, as I said above, people never regarded pubs as places to buy alcohol. It’s a sideline, pays for the premises. If this wasn’t true, why wouldn’t pubgoers simply go to the pub nearest home rather go to considerable expense & risk being nicked for DD travelling miles to favoured venues?
And I should have added a c) to my list above:
c) far from being price sensitive in the sense that customers are reluctant to pay higher prices, they prefer to pay higher prices. Or to be more exact, will substitute a higher priced product for a lower. Anyone who’s worked behind a bar or in the booze business will know this. Most people can’t tell the difference between ordinary & premium products. You could double the price on a bottle of beer simply by changing the label. Few people can tell the difference between own label plonk & fine wine. They judge quality by price, not assess price by quality.
Anyone know if there has been a decent study on the effect of the smoking ban on pubs? Something that looks at what happened to the customers. I’m not at all sure that the effect of the ban was a one off. The rise of the smokey drinky may well have a continued effect of removing potential new customers from the pubs. Clearly there is a lot going on as others have noted but pissing off a significant section of the customer base never seemed like a good move.