Taking back control of beer
Thursday, 18 July 2024 23:59

Taking back control of beer

Published in Eating & Drinking

Keith Flett proposes some ways of taking back control of brewing and pubs, beyond the reach of ‘Big Beer’ in brewing and pubs. Image above: the former Bevendean Hotel, now The Bevy

Wild Beer the Somerset craft beer went into administration several weeks before Christmas. It now appears that the potential buyer has withdrawn, so the Administrators have shut the brewery and laid off 20 workers including the head brewer. Wild Beer brewed great beer and it’s a real loss if the brewery and beers can’t ultimately be rescued. There are however wider lessons and issues here.

Global big brewers are increasingly controlling the brewing, distribution and sale of beer and that means they are also looking at ways of monetising independent craft beer. The trend towards monopoly means global big beer brands dominate the market and even when it comes to craft you are likely to encounter Camden Pale (owned by ABInBev) and Beavertown Neck Oil (owned by Heineken).

In the last few months among a string of closures of small breweries due to the cost-of-living crisis Marstons-Carlsberg has shut Jennings brewery in Cockermouth and sold its Bedford brewery to Estrella. Meanwhile Ashai have announced the closure of Dark Star at its Sussex site with brewing moved to Meantime in Greenwich.

Are there ways round this?

Wild Beer pursued one of the better-known ones – that is crowdfunding. It raised £1.8m from small investors in 2017 on a plan to build a new brewery on the Bath and West Showground and increase brewing capacity. It didn’t happen. Wild harnessed the enthusiasm of beer drinkers to fund and promote good beer that was independent of the clutches of Big Beer. Most of those who invested will have done so on a goodwill basis without a great expectation of seeing anything in return. As it turned out none of the investors will get anything. Wild Beer subsequently claimed that the crowdfunding was used to buy additional brewing equipment and the sum raised fell far short of the £9million a new brewery would have cost.

The Scottish brewer Brewdog has run a number of crowdfunding exercises under its Equity for Punks scheme. Those who buy shares get cheaper Brewdog beer and might find the value of their shares delivering some profit if and when Brewdog finally launches as a public company. That is far from certain since a private equity investor already owns a chunk of the company and would get first call. As the Financial Times occasionally warns, while such schemes appear radical in reality, if you want to invest money it’s much better done on the highly regulated Stock Exchange. You still might not make money but at least there are rules which can explain why.

It should also be said that a number of other breweries such as Redemption in Tottenham have successfully run well-organised crowdfunding schemes. As a way round or out of the clutches of Big Beer however such schemes can clearly have their problems, and still rest firmly on some notion of market economics.

Drinking rather than brewing

It’s possible to start from the other end of the equation – the drinking rather than the brewing end. In England legislation exists to allow pubs to be declared Assets of Community Value. This will protect pubs under threat of closure or change of use for a period while efforts are made to find a buyer – often a community-led scheme. In some cases this can mean a few wealthy individuals but in others it can be a genuine widely based community scheme where people subscribe, rather like crowdfunding but with far more direct control.

In a market economy, while this may remove the pub from the direct clutches of big beer and big pub companies, matters are rarely quite so simple. Keeping the beer and lager and serving it at the right temperature requires equipment which needs to be regularly maintained. Perhaps needless to say global brewers like Heineken will do this providing that a pub sells their drinks and only their drinks. This applies particularly to keg beer served under pressure. Cask or real ale is a little less restricted not least because under the Beer Orders pubs have a legal right to sell a guest ale, often from a small local brewery.

The dilemma about how to run a successful brewery or pub but keep out of the clutches of Big Beer comes down to two very different solutions – either a big national one or a small and very local one. There are examples of both around the world. For example, Budvar Budweiser brewed in the Czech Republic (related to but not to be confused with the US version) is a State-owned brewery that has time and funding to invest in producing quality beer.

During the First World War the Government ran a limited exercise in Carlisle where all pubs were nationalised and served by one State brewery. The primary aim was to control drinking amongst armaments workers, but it also meant that beer quality and pricing as well standards in pubs was both regulated and improved.

The Carlisle scheme lasted until the early 1970s when it was privatised by a Tory Government. However, after 1945 Labour planned a similar scheme to address the requirements for pubs and beer in the New Towns then being built. Clearly there were no existing breweries or pubs serving them. The scheme did become law but was reversed by a Tory Government in the early 1950s. Brewers and publicans had vociferously opposed the idea of state control.

In practice while the beer and pubs would no doubt have been of a good, well-regulated standard, it’s likely that in practice it would have emulated the monopolies that some brewers developed – for example Watneys in East Anglia, in the 1960s.

The alternative is to start from the bottom up. To develop a network of independent community-owned pubs rooted in their local areas but welcoming to all. Particularly in the current moment, this goes against market trends. However, there are successful examples – The Bevy in Brighton is the only community pub in the country based in a housing estate, for example. To be successful pubs like this really do need to be the hub of the local community. They need to be serving drink and food of course, but also offering meeting spaces, regular events, warmth and just somewhere to hang out away from work or home.

There may be a further way forward based on legislation focused on pubs being the hub of the local community. There is an historical example, the 1830 Beer Houses Act. Coming after a period of high beer prices and political turmoil, the Act relaxed licensing regulations allowing thousands of small new pubs – what we would call micro-pubs – to open. Under the Act a ratepayer could apply for a licence to brew and sell beer. By 1841 over 40,000 beer houses had opened, each run independently on a small scale.

Of course such a move would require a statutory framework – both a requirement that pubs serve a community beyond just selling alcohol, and safeguards to protect existing pub businesses that might or might not already be following a similar model.