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The Discount Culture in beer & elsewhere

In Uncategorized on October 18, 2016 by kmflett

The Discount Culture in beer and elsewhere

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In Victorian times it was called the slop trade. That meant undercutting good quality goods with cheaper, less well made items that however appeared pretty similar. The aim was to drive quality production down and perhaps out in favour of goods that sold more cheaply but in greater quantities.

The same business model is still around as is capitalism, as you will have noticed.

The latest blog by respected beer writer Matthew Curtis addresses the discount culture in what many call craft beer. He rightly sees it as a bad thing.

That doesn’t mean unfortunately that all the points he makes are absolutely to the point.

Firstly he seems to think that CAMRA- which I joined in 1975 and remain a member of- is the campaign for cheap beer. I must have missed that in the last 40 odd years I suppose. Agreed nowadays CAMRA offers Wetherspoons vouchers and some pubs do CAMRA discounts. I’m not a fan though more or less any membership organisation in any area offers membership benefits. I certainly use neither though it’s clear at CAMRA conferences (where democratic discussions and votes take place) that some members do like them.

Even so I’m not aware that CAMRA has any specific influence over the prices brewers charge for beer (beyond campaigning for duty reductions). It’s about keeping breweries and pubs open- something it has had some success in.

Matthew may of course have a good point that CAMRA prefers cheaper beer to more expensive beer but there may be some good reasons for this. Firstly because for decades there has been some element of over-charging for good beer by a minority. I’m sure most readers of this can think of an example or two when they’ve got into a bar and thought ‘how much?. Secondly because not everyone who likes good beer has a great deal of money. Pubs are relatively expensive compared to supermarkets, a matter that needs to be addressed but rarely is beyond just making the criticism.

Matthew then criticises with more justification Wetherspoons and its pricing policies. Clearly Tim Martin does undercut the competition and he does squeeze profit margins of small brewers. As a socialist I’m not keen on the way market capitalism works and this dog eat dog way of going on is not great. But the world is not always so black and white. Should you enter a Wetherspoons pub (I do so occasionally) you will mostly find them packed. Some people try craft beers they otherwise wouldn’t see and if they did probably wouldn’t pay the price charged. So Martin increases the market for craft beer albeit is much less than ideal ways and perhaps ultimately destructively so.

I don’t think that breweries should sell beer at cost or less in order to get market share, it drives down the whole market. It is certainly something CAMRA should campaign on (without becoming the campaign for expensive beer). For small brewers with little capital it is anyway likely to be the road to financial disaster.

For larger concerns, as elsewhere in market capitalism, different rules apply. In the world of very large private sector employers that I deal with as a trade union officer, things are often sold at cost or less. The idea is to get market share, drive the share price (and hence the value of the company) and in due course, it’s hoped, to get good profits.

Few if any craft brewers are in that league but broadly the same general rule applies. Beer may be sold at small margins to get in the market and drive market share. A good or bad thing? The question is slightly beside the point. You can either regulate the market to stop this or get rid of the market altogether. That takes organising and campaigning of course. In the meantime I’m not sure it’s great to criticise, in this case brewers, for dealing with the world as they find it.

There are always exceptions of course.

In the meantime thanks to Matt Curtis for writing a stimulating post.

 

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