Friday 18 November 2011

Unfree Enterprise

Ted Tuppen:
Plenty to look miserable about
Few things are less edifying than an industry conspiring with the government to screw over its competition. The Coca-Cola company's support for Prohibition was driven by a transparent pursuit of profit. The makers of Nicorette and Champix not only support the EU's snus ban but are lobbying for the prohibition to be extended to all smokeless tobacco products. It's cynical and it's opportunistic. It's rent-seeking.

Britain's pub industry is going down the same dismal road. Yes, the pubs have been victims of punitive legislation themselves. Yes, they could have done more to oppose the smoking ban. And yes, we have some of the highest alcohol taxes in the world, but that it is no excuse for this...

Tuppen: Supermarkets may need to be "bullied"

Supermarkets may need to be “bullied” into adopting a responsible pricing strategy on alcohol according to Enterprise Inns chief executive Ted Tuppen.

First the Scottish Licensed Trade Association, then Greene King, and now Enterprise Inns. All lining up to demand a new bad law to make up for another bad law. They all share the delusion that minimum pricing will drag back the customers that the smoking ban drove away. Ted Tuppen is the guy who, in 2007, predicted that "the ban will lead to a number of pub closures across the industry, particularly amongst lower quality wet-led outlets." But, he said, Enterprise Inns would be just dandy:

"However, we are confident of a positive outcome as the smoking ban becomes an accepted part of pub-going and licensees and customers alike enjoy the benefits of the more pleasant, healthier, smoke free regime."

Since then, Enterprise has sold hundreds of its pubs and its share price has collapsed from £7.00 in July 2007 to 29p today. Winning!

The Enterprise boss also launched an attack on the government’s “punitive” beer duty escalator, saying it is time to “level the duty playing field so cynically distorted” by George Osborne and “put right the duty wrong perpetrated by Gordon Brown”.

Ah, the fabled "level playing field", destroyer of jobs, killer of businesses. Funny how the playing field is always levelled down but never up, isn't it? I recall Enterprise Inns pleading for a level playing field back in 2006...

Hubert Reid, Enterprise chairman, said: "If a total ban is inevitable, then it should be imposed across the board, including 20,000 private members clubs, in order to create a level playing field for all those employed or operating within the hospitality and leisure industry."

To be clear, the exemption for private members' clubs would have distorted the market and been unfair to public houses. It would have been better for the consumer, but it was still a rotten law.

Back in 2006, it may have seemed good business to demand the government shaft all licensed premise with equal vigour. With hindsight, a united front against the whole illiberal law would have been better. The pubco's must now regret getting into bed with the anti-smoking lobby in 2006, just as they will live to regret getting into bed with the temperance lobby on the minimum pricing issue.

“Pubs don’t want to be treated as a special case but we do need to see an end to the discrimination which will lead to more pub closures and more job losses,” said Tuppen.

No, Mr Tuppen. Being treated as a special case is exactly what you want. The on-license and off-license trade are completely different industries selling completely different services. Off-licenses sell alcohol. Pubs sell an experience. There can be no level playing field. The pub experience is necessarily more expensive. It involves washing glasses, larger premises and—above all—extortionate rents to greedy pubcos so that their CEOs can pocket £1.2 million a year.

“I am uncomfortable with the imposition of minimum pricing, no matter how attractive it might seem. I believe that we need a society which suffers from less regulation and not more.

Well, that's more like it, sir. So, no more silly talk of minimum pricing then?

“However, a minimum pricing level may well be necessary if we are to have a ban on below-cost selling." 


It is plainly nonsense to say that minimum pricing is needed to ban below-cost selling. However, if Mr Tuppen thinks that selling alcohol below is such a great way to get ahead in the licensed trade, why doesn't he try doing it for a few weeks and see how it goes? He will soon find out why—as even the temperance lobby now admits—below-cost selling is as rare as hen's-teeth.

"Can we ask the supermarkets to be responsible? This is really where the industry, the Association of Licensed Multiple Retailers, the British Beer & Pub Association are all in loud agreement."

The pub industry are united in wanting the state to shaft their competitors? Well, stone me.

"Like cigarettes, why shouldn’t alcohol be sold behind the counter rather than picked up by anyone from the shelves?"

Because cigarettes are small, high value items which makes them a perfect target for shop-lifters. Are you seriously suggesting that people would go to pubs more if they had to buy alcohol from a supermarket counter? And do you really think it is wise, as the head of a pub company, to equate alcohol with cigarettes? There are enough temperance nuts doing that already without you helping them out.

"There should be a clear restriction on irresponsible advertising and multipack sizes could be reduced to say a pack size of four, rather than 20."

What on earth is this fellow babbling about? Is this meant to be "nudging"? Give me gospel temperance over the doctrine of piddling inconvenience.

"There should be a ban on external advertising of price, something I think which would equally apply to pubs."

Does the phrase "cutting off your nose to spite your face" mean anything to you, Ted?

"These are simple solutions which the supermarkets should be encouraged, or perhaps bullied to follow, perhaps through a voluntary code of practice."

There's nothing like bullying people to make them do things voluntarily, is there? And that's what this is all about: bullying. Ted Tuppen is the mouthy little oik standing behind the big kid, goading him on. Too stupid and cowardly to do anything himself, he relies on the bully to beat up his enemies. Utterly pathetic. Boycott Enterprise Inns while you still can. There aren't many left.


Anonymous said...

The REPEALS are now inevitable!

Curmudgeon said...

Of course none of this would ever happen to his business, would it?

MAAH said...

In Ireland the pub lobby pressed for, and got, a law passed that forced off-licences to close at 10 pm while pubs stay open much later. That's what you call rent-seeking. Between the cigs ban and the recession, pubs are going down like skittles.
Pub near me gets the kids in on a saturday night and the landlord feels he has to make his whole week's profit in one night, with the result that he keeps serving the kids till they are falling down drunk. Most pubs don't even bother opening in the day any more.
But it beats me how tryin to close off-licences helps anything, just makes for bad feeling.

smokervoter said...

This kind of market distortion happens whenever the government intervenes between willing sellers and buyers. Make one exception and the other guy screams bloody murder. It is all as predictable as cold weather in Antarctica. The trick is NO EXCEPTIONS WHATSOEVER. A completely unhindered marketplace is the only answer.

This is yet another casualty of the Healthist Revolution. Assigning market values based on perceived public health benefits is a cockamamie idea doomed to failure.

Hong Kong Government Statement on Competition Policy 1998

"The Government considers competition is best nurtured and sustained by allowing the free play of market forces and keeping intervention to the minimum."

Angry Exile said...

The pub trade had its chance and it chose supine compliance over resistance and looking after its real customers. Screw 'em.

Fredrik Eich said...

I some times wonder if people such as Ted Tuppen even like pubs because they sure as mustard don't like or understand the people that use their pubs.

Starship Fighter said...

Since the ban I have hardly visited a pub socially, and thanks to tits like the subject of this post my income as a semi-pro musician has been battered by the fact that the clubs are closing at a similar rate to pubs. Now he wants to make it more difficult to get a deal at the off license. Can you imagine another industry punishing it's customers as much as the UK pub industry? I'm not surprised people are taking their money elsewhere.