Pubs face grim future

John Shepherd
Sunday 23 August 1992 23:02

BRITAIN'S pub market is set to lose so much business over the next 10 years that thousands of pubs could close, writes John Shepherd.

National beer consumption is forecast by industry analysts to fall by nearly 8 per cent in the next nine years, and it is estimated that the take-home market will rise from 22 per cent this year to 33 per cent by the year 2001. In 1980 just 10 per cent of sales were taken home for consumption.

Analysts at SG Warburg, the securities house, say that longer- term factors - changing social behaviour, demographic changes, and healthier lifestyles - all apply a negative influence on demand.

The squeeze on pub trade will also put pressure on numerous small breweries, many of which may find it impossible to compete against the strong top tier of brewers like Bass and Whitbread.

The beer market, measured by production plus imports minus exports, was 37.2 million barrels in 1991. That figure looks set to shrink to 36.1 million this year, 35.7 million next year, and to 34.3 million by 2001.

Within those figures, take- home sales were 7.8 million in 1991. They are projected to rise to 8.2 million this year and to 11.3 million by 2001.

Warburg's projections lend weight to previous estimates from some quarters in the industry, like Wolverhampton & Dudley Breweries, that one in 10 pubs may have to close.

Those most at risk are individual operators. They have been subjected to more competition by the big brewers, which are selling pubs to multiple operators to meet the November deadline for complying with the Government's Beer Orders.

The market's structure is becoming one that will favour big, efficient brewers and those that have a large exposure to the free- trade, like Scottish & Newcastle.

The growing take-home market will also benefit Bass, which has the ability to reduce production costs quickly and a strong presence in the free-trade - roughly 65 per cent of its business.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments