REVEALED: Your local pub could be being losing thousands of pounds by the people who own their boozers because they can’t agree on how many pints there are in a keg of beer
Sir Tim Martin warns UK pubs in grave danger
Pub bosses are demanding publicans sell more beer from a barrel than they contain, in some cases costing landlord thousands of pounds a year.
Boozers up and down the country have fallen foul of a what publicans deem a scandal. It is centred on the 72-pint keg publicans buy ffrom are expected to sell every drop of liquid a barrel contains – despite them containing less after they have fermented.
Real ale, which is a living product and undergoing fermentation inside the barrel, is sold in casks claimed by pub companies to contain a certain number of pints, often 72. But the nature of the beer means there are often around four pints in each cask that are sediment, which is undrinkable and, crucially, unsellable.
A source told the Daily Star: “Rent is set on this [casks having 72 pints], so you lose doubly because the rent is set as if you sold 72 pints – it’s not possible to do that. So essentially rent is 10 to 15% of your turnover and they’re estimating your turnover as if you sold 72 points a barrel. So not only do you get less beer and less profit, your rent is higher too. It traps you from both ends.”
Chris Wright from the Pubs Advisory Service says these 72 pint kegs are, “probably the bulk of the market”. This means that when publicans buy a barrel from the company from which they are contractually obliged to buy their beer, their profits are expected to reflect close to the full 72 pints.
In some cases, the balance sheet of which has been seen by the Daily Star, sources claim wastage can be around 12.71%. Up and down the UK, some landlords say they have this issue with the huge pub owning companies. Known as the ‘big-six’ of ‘pubcos’ – they are made up of Star Pubs and Bars, Stonegate, Marston’s, Greene King, Punch Taverns and Admiral Taverns. And own a huge proportion of the nation’s boozers.
The source the Daily Star spoke to, who chose to remain anonymous for fear of retribution from the Pubco he used to work with, said: “We were bullied by pub companies for a long time. They really do throw their weight around. And then the Pub Code Adjudicator saw it all and did nothing about it and shrugged their shoulders.”
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He continued: “We never really had an idea of how much beer was in the cask but they did give us a 2.5% wastage allowance which is supposed to cover spillage, beer rotting, staff taking things, mucking things up… there’s a whole load of things that’re included in this wastage but the sediment is actually bigger than 2.5%.” This, as The Star can reveal, can in some cases tally to an extra 10% more wastage.
“So it looked like they were giving a fair allowance because everyone knows there’s some sludge in the bottom of the cask. And it looked like that was all accounted for but when they actually gave the figures it was totally misrepresenting what was coming.”
The man had hired a manager to run the pub, but when he came under pressure for the alleged wastage from the Pubco, he hired an auditor to take a look for themselves and try and work out just how much beer was actually being wasted.
“I hired this company to come out and do me a report to tell me how much I should reasonably allow for waste on casks. [The Pubco] had given me a 2.5% wastage allowance. So I sat down with the guy and said, look, I’m getting these casks in, there only 68 pints, there’s also some spillage [and a number of other things] that can lead to waste.
A BBPA spokesperson said: “For years the Leased & Tenanted pub model has seen people who want to run their own pub successfully partner with companies who support them.
“The majority find the backing of pub companies, which put £200m every year into these venues, invaluable as it means they get help running their pub business and keep pubs at the heart of the community.
“That’s thousands of pounds a year that isn’t there when you’re in the tied part of the business where you’re paying over the price of the beer anyway, it’s tipping people over the edge. People lost their business because of this sort of thing.”
He says that the pub companies refused to acknowledge the issue, so he eventually got the Government watchdog known as the Pubs Code Adjudicator (PCA) to look into it. He said: “They just said ‘oh’ and walked away. It still grates me now, it was that dismissiveness of facts and truth.”
He said “I was about £5k a year down on lost revenue and rent because of this. Many pubs, selling more real ale, will be worse off.”
The Daily Star contacted the “big six” pub cos – made up of Star Pubs and Bars, Stonegate, Marston’s, Greene King, Punch Taverns nd Admiral Taverns – and so far received no reply to the claims we report.
Meanwhile the Government watchdog of the industry – the Pubs Code Adjudicator (PCA) – is meant to oversee disagreements between landlords and pub companies. But many claim it does very little to help.
A PCA spokesman said: “Pubs Code disputes have fallen sharply and last year our arbitrators resolved 19 cases. We know times are tough for all pub operators and the PCA always works to ensure fairness.”
A BBPA spokesperson said: “For years the Leased & Tenanted pub model has seen people who want to run their own pub successfully partner with companies who support them.
“The majority find the backing of pub companies, which put £200m every year into these venues, invaluable as it means they get help running their pub business and keep pubs at the heart of the community. Most Publicans are happy with their pub company, proven by satisfaction ratings averaging 7.6 out of 10.
“We and our members are fully committed to Codes which, rightly, give Publicans protections and provide access to independent dispute resolution should issues arise.”
You can read more about the PCA and how it is failing pubs here