Is this a Pub Co mistake or how many genuinely know, the Beer Barrel shortage with real ale? (Barrel-Dregs)
The Old Chestnut, how much Real Ale can you sell in a barrel?
In pre history, before the advent of the Pub Co’s. the old Family Brewers were in business to sell beer.
They were considered to be honest pillars of the community, their sons and daughters went to the top Public Schools, on the surface and in the main squeaky clean.
Then the Pub Co’s arrived on the scene, you could say a bit like modern day pirates in an industry largely unregulated, except for duty and revenue influence, backed by the money manipulators and top lawyers.
Very little idea how to run pubs, but had a nasty grasp of rents and inflating company assets.
Right down at the bottom of this industry is ullage, the waste in the bottom of the real ale cask, in fact the barrel-dregs.
The Family brewers in the main, didn’t have a problem with this, you put all your ullage in a barrel and sent it back to be given a credit for, they claimed the duty back or allowed a certain amount as ullage, not a problem.
The Pub Co’s, the majority of them, don’t brew beer, therefore if it says 72 pints on a cask, their tenant/lessees have to sell 72 pints or pay for 72 pints.
Anybody that has set up a cask of real ale knows that your first pint or two can be thrown away and at least the bottom two pints or more are undrinkable.
Whether you have vertical stillage or a tap at the bottom, both are designed to avoid the ullage at the bottom, unless of courseÂ you want to lose your dedicated real ale drinkers.
The major brewers are laughing all the way to the bank, the ullage problem is no longer a problem, you might get the odd squeak from an experienced licensee about throwing four pints away, on average, they are happily claiming the duty back, since they are now run by accountants.
The big loser is the Pub Co licensee, he is being ripped off for at least three and a half pints on every 72 pint cask.
With the Pub Co’s he gets minimal or no discount and in many cases is paying way over the top for his real ale compared with Managed Houses and Genuine Free Houses.
If we didn’t have Pub Co’s controlling so many pubs, these issues could be aired successfully, as they used to be, direct with the brewers, the only slight saving is if you don’t sell it you can’t pay VAT on it.
But you’re wasting your breath with the majority of Pub Co’s, Potboy South tells me that even Pub Co Trainers are reputed to be telling their new intakes that there are 72 pints in a cask of real ale and no mention of ullage.
They naively assuming like canned beer (lager etc.), that every drop is saleable, sadly it is not.
The Schrodinger Report points out that only 68/69 pints in a 72 pint cask are normally useable, which all experienced licensees and brewers know, but the Pub Co’s influence has removed the direct complaint availability with the brewers.
Legally, it could be assumed that the Pub Co’s would appear to be guilty of miss selling, certainly they should be responsible, as the suppliers, though I doubt whether any of their licensees have managed to beard the Dragon in his Den, under the Trade Descriptions Act.
Knowing the Pub Co’s well, the price will not go down from the Pub Co’s or the Brewers, but a court case could or may produce an interesting result for those that have been sold 72 pints of useable real ale per keg for many years as tied licensees.
The Court of Public Opinion would be the cheapest starting point for hard pressed tenants and lessees.
There are a number of situations that can cause the waste to exceed 68/69 pints per 72 pint keg.
Firstly under filling the barrel, some brewers claim to put a handful of hops in each barrel to improve the flavour, which is more waste. At what level the barrels are filled from the brewers vats, near the top or the bottom can produce added waste, they are going to run it to the line to get the most out of each brew. Warm weather on a standing delivery dray, can cause activation and the real chestnut, how many licensees weigh the barrels on delivery, also knowing the exact weight of individual barrels, sadly very few, it also means moving a barrel once delivered.
Most licensees want the barrels set up as soon as they are delivered to ensure maximum settling time, the licensee with a Pub Co is in a “No Win” situation.
The only solution is to deal direct with the brewers, a winning court case against the Pub Co’s for miss selling and the adoption of the MRO (Market Rent Option) by all pub owning companies, would resolve this problem.
Interestingly the HMRC have a definition of what a Pub Co is under the AWR Scheme.
Businesses who act as an agent between a supplier and another business to arrange, or offer for sale alcohol to other businesses – these agents often don’t take physical possession of the goods and are known in the industry as dry brokers.”
They have to be registered to reclaim the duty paid on unsold beer (ullage/dregs), the larger brewers would appear to do this with cask ale, if the Pub Co’s acting as Dry Brokers claim the duty back, it could massively backfire on them, if they don’t they could be assumed by all fair minded people to be knowingly miss selling.
If a good “No Win, No Fee” lawyer got hold of it, the figures could be enormous, it would certainly remove the smug smile on some Pub Co’s managements faces.
Reactions:-It would appear from our latest sources, Heineken deny changing policy but continue the slightly less half-hearted policy that they had before, brewers are well aware of it, are Pub Co’s? And will they take any action to remedy this “Old Chestnut”, which would appear to have been quietly buried from the time the Pub Co’s started.
Every Tenant/Lessee/Manager whose Pub Co does not have a specific policy on this shortfall, should start asking questions and not be fobbed off with delaying answers, there could be some embarrassing times ahead.
The old argument, it’s only a few pints is not valid, when you look at the overall quantities over a year or more, certain Pub Co’s have gone for many lessees for a lot less using Brulines stats or similar.
The other argument is that using a Stocktaker would remove this problem, in which case why has the Stocktaker not raised this point with the Pub Co when they have no specific policy, when a 72 pint barrel is clearly 68/69 pints or less.
Another reason to avoid a Pub Co Tied Commercial Lease, it may not seem much a few pints, but at the end of the day, it can cost you your Net Profit or increase your losses without you knowing, just for trying to serve good pints of Real Ale.
Please click on the link below to view the report, it is an eye opener.
Observations on this nasty business, please click on Link below.
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