Is it last orders – or time to roll out the barrel? (From The Northern Echo)

Is it last orders – or time to roll out the barrel?

11:06am Tuesday 30th November 2010 in North-East Business Features

From Gastropub of the Year the Bay Horse, at Hurworth, to town centre bars, the pub remains central to the region’s life – but for how much longer? With premises closing at an alarming rate, Business Correspondent Andy Richardson looks at an industry that is battling for survival.

BY CLOSING time this evening another four UK pubs will have gone out of business. Could your local be the next one to call time for good?

The recession has hastened the demise of those pubs that were already struggling to break even. This region is littered with casualties, such as the Tap and Spile in Darlington and the Jubilee, in Shildon, recently condemned to meet its demise under a bulldozer after standing empty for years.

Even the industry giants are struggling.

Punch Taverns is considering handing back 6,000 of its pubs currently run by independent landlords to help wipe out £3.1bn of , and rival operator Enterprise Inns sold 579 of its under-performing pubs during the financial year as it reported a £31m loss.

Property expert Christie+Co predicts that by 2012 the number of tenanted and leased pubs will drop to 22,000 from 30,800 in 2008.

After all of that dismal news, you would be forgiven for needing a pint. Lee Le Clercq, northern regional secretary of the British Beer and Pub Association (BBPA), clings to the fact that the rate of 29 closures per week nationally is at least down on last year’s high when more than 200 pubs were going to the wall every month.

He said: “The situation is still a concern and is due in the main to high duty rates on alcohol, loss leading by supermarkets making pubs less competitive, and the overall recession forcing the consumer to watch every penny.”

Mr Le Clercq has called on the Government to give the licensed trade a fighting chance by introducing a two-tier tax rate that places a higher levy on packaged drinks to force up supermarket prices. The BBPA runs campaigns such as Axe the Tax and I’m Backing the Pub to push its cause.

Colin Griffiths is steeped in the licensing trade. The office where he has run Licensed Trade services for the past 14 years overlooks the Camerons Brewery in Hartlepool, where he worked for more than two decades.

His business offers bookkeeping and financial advice to pubs and clubs across the North. He is in no doubt where the root of the malaise lies.

“There are a number of factors, but the supermarkets are killing the pubs,” he says.

“People are buying a few cheap cans rather than going to their local, and the VAT rise in January will make things even worse.

“Price increases when we have seen beers and lagers go up 10p a pint makes it very, very hard for the community pub to survive. Town centre pubs are competing with licensed restaurants.

“The impact of new trading hours means that you are paying out wages for times when there are not enough people in the pub to make it pay. It is a really tough business.

“The trade has changed so much in my time: from tenancy agreements onto l e a s e h o l d agreements into the new m u l t i - p u r - pose contracts that offer so many opportunities.

I do believe that the way forward is to use spare rooms as a convenience store or post office.”

That view echoes the former Conservative Defence Minister Michael Portillo’s comments at the British Beer and Pub Association’s annual dinner that collaboration between three struggling local institutions the post office, the pub and the library, could drive footfall and revenue.

Michael Ibbotson, who runs Provenance Inns with business partner Chris Blundell, tells a more heartwarming story.

In the new year they will add the Carpenters Arms, Felixkirk, to their clutch of North Yorkshire pubs that are unashamedly food-driven but also loved by local regulars.

“We are swimming against the tide – buying village pubs and refurbishing them,” said Mr Ibbotson who took over the The Durham Ox at Crayke, near Easingwold, ten years ago. Described by Mr Ibbotson as a “proper pub in a chocolate box village” it has been named Freehouse of the Year, the Good Pub Guide’s Yorkshire pub of the year 2009, AA pub of the year 2007-8 and Yorkshire Life magazine traditional pub of the year 2008.

Mr Ibbotson accepts that external factors such as the foot and mouth crisis and the smoking ban has made the situation “horrendous”, but he has limited sympathy for licensees who fail to help themselves.

“If you don’t clean your windows, the beer is bad, the food is bad and no one says hello when you walk in then you can’t complain when people stop coming.

“The pub trade is like any other business; you have to be profitable, efficient, with well-trained staff and market yourself.

“I don’t claim to have the secret, but I’m learning what not to do. I try to make a buck in lots of different ways out of the same building.”

His initiatives includes converting farm buildings into letting suites, providing outside catering to shooting parties and holding regular village events.

He adds: “The days of retiring into a pub, because you like gin and tonics and someone told you that your wife is a great cook, have gone. You have to be good at what you do. People are a lot fussier where they spend their money, as there is less and less of it around to spend in pubs.”

Clearly not every community can sustain a place like the Durham Ox or Michelin-starred The Star at Harome, near Helmsley.

But the region is peppered with well run-locals, such as The Ship Inn, at Middlestone Village, or The Surtees at Ferryhill Station, that prove quality and value can co-exist.

The George and Dragon, in Hudswell, reopened in July by MP William Hague, was bought by a co-operative of villagers and supporters after they raised more than £220,000 to buy and refurbish the building.

Its position as a hub of the community is underlined by the range of services it offers that includes a library, allotments and internet access.

Others that have battled back from the brink include the Horseshoe Inn, West Rounton, and The Duke of Wellington Inn (formerly the Monks Table), Welbury.

Prime Minister David Cameron, who is determined to head “a pub-friendly Government”, responded to calls from the Campaign for Real Ale (Camra) by reinstating the position of Pubs Minister. MP Bob Neill took up the role which was scrapped after the last election.

Camra research found that 84 per cent of people believe a pub is essential to village life. Mr Neill agreed when he said: “The local pub is a great British institution and the social heartbeat of life in our towns and villages, bringing people together and strengthening community relationships.

“As minister with responsibility for pubs, I am determined to protect the valuable role pubs play and help them to thrive.

“I know many pubs are finding it hard in these difficult times, but I also know it is an industry that’s always been full of creativity and initiative, such as the gastropub. I saw this ability to adapt first-hand when I recently visited The Shoulder of Mutton in Kirkby Overblow, North Yorkshire. The landlords, Kate and David, have merged the local shop into the pub, creating a new business.

“As a Government, we are committed to removing red tape to allow pubs to operate in more entrepreneurial ways. We are introducing a new Right to Buy so that residents will be able to save pubs by taking them over. Pubs are just as important to the economy as they are to the local social scene.”