Parliamentary voice for an embattled industry

14 April 2008 by
Parliamentary voice for an embattled industry

John Grogan MP, chairman of the All-Party Parliamentary Beer Group, is trying to build a consensus behind the notion of reference pricing as a way of tackling irresponsible alcohol retailing. Christopher Walton reports.

As pubs and bars reel from the chancellor's beer tax blow, Caterer caught up with John Grogan, chairman of the All-Party Parliamentary Beer Group (APPBG) and the pub trade's voice in Parliament, to ask what the industry needs to do next.

Grogan is Labour MP for Selby, North Yorkshire, a constituency that includes the brewing town of Tadcaster, which is still home to the Tower Brewery (owned by Coors), John Smith's and Samuel Smith's Old Brewery. As a result, he has a special interest in beer, which led him to take up the chairmanship of the APPBG in 2004.

Despite this, Grogan claims that he is not cheerleader for the pub and beer industry, nor is he paid for his role, but is a conduit for the Government to speak to the trade and vice-versa.

Proof of age

During his time with the group Grogan has campaigned for the introduction of the Proof of Age Standards Scheme (Pass), which was set up in 2003 as a national guarantee for proof-of-age cards. He was also instrumental in lobbying for a full smoking ban in public premises, claiming that a partial ban would have been "a nonsense", dividing the industry and creating policing difficulties.

Since the introduction of smoking ban legislation across the UK the focus of the APPBG has been on promoting the responsible retailing of alcohol throughout the on-trade.

Grogan has been at the forefront of responsible retailing arguments - namely, that pubs are, by design, responsible retailers and the solution to problem drinking, not the cause - and famously labelled Tesco boss Sir Terry Leahy "the godfather of binge-drinking" in response to the supermarket's stack 'em high, sell 'em cheap approach to retailing beer, wines and spirits.

He says Leahy was aware that the argument would get personal and claims the accusation was made due to the on-trade's frustration with the off-trade.

Now Grogan faces an argument with fellow Labour MPs Chancellor Alistair Darling and Prime Minister Gordon Brown over beer duties. "It was a big shock to the industry and to MPs, the scale of the duty rise, and even more of a scare was the locking in of the rise for four years hence," said Grogan.

"I would say it is a very ineffective way of improving public health. Rising duties will change prices in the on-trade, but not the off-trade, and that difference between the on- and the off-trade is bound to have an impact."

Grogan is now attempting to form a coalition around reference pricing - a minimum pricing level for alcohol that follows in the footsteps of a similar scheme in Canada.

"In Canada, the reference price for a small bottle of beer is around 50p, and that is in the off-trade and the on-trade. There is potential for an alliance between the pub industry, the health bodies and the supermarkets on this. For the Government, there is an attraction, too. Revenue is not just excise duties, but employment taxes and corporation taxes as well. It will recognise that duties are offset by other taxes."

The argument is that a consensus would have the backing of the Government when it comes to the retailing of alcohol, much more so than the presently squabbling off- and on-trades.

Last week the British Beer & Pub Association, the Association of Licensed Multiple Retailers and the Campaign for Real Ale (Camra) all defended criticism of their lobbying efforts in the wake of the chancellor's rate rise, saying they had argued on "more or less the same thing" but agreeing that such criticism was "not unfair".

Changing environment

Grogan is sanguine about whether the pub industry lobby could have done a better job. "I do not think it would have made much of a difference, and it does not do any good to say ‘Woe is me.' The key now is, where do we go from here? How do we adapt to this changing environment? We need to try and build a coalition beyond the industry. The likes of the British Beer & Pub Association and Camra are not enough to win the argument."

The Home Office will unveil its review of the impact of alcohol pricing in May, following February's review of the Licensing Act (2003), giving all bodies the impetus to get behind Grogan in his mission to get reference pricing introduced.

His challenge now will be to build a consensus before the next election, as the boundaries of Selby have been redrawn, and he has declared he will not contest the new seat - marking last orders for the pub industry's facilitator.

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Signs of suffering in the pub trade

The case for Government support for the pub trade has been growing since the New Year.

  • According to a survey by Camra, 1,567 pubs closed permanently in 2007, which is equivalent to 57 a month.

  • According to the British Beer & Pub Association, 1,409 pubs closed during 2007.

  • The Massive Pub Company and its estate of 33 pubs went into administration in February.

  • The volume of beer sold in pubs has fallen by 11% in the past decade, while beer duty had climbed 27% before this month's Budget.

  • The Laurel Pub Company is believed to be poised to enter administration after failing to find a buyer for 94 of its loss-making pubs.

  • JD Wetherspoon recently saw its average sales per pub per week fall for the first time in a decade, from £30,700 to £29,000.

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