Sean Farrell 

How craft beer has set struggling pubs free from the nachos

Independent British brewers are buying up premises to release them from pubco ties – and give them new life, writes Sean Farrell
  
  

Dave Herbert, manager of Whitelock's in Leeds
Dave Herbert, manager of Whitelock’s in Leeds: ‘the previous owner had given up a bit’. Photograph by Gary Calton for the Observer Photograph: Gary Calton/Observer

On a Tuesday lunchtime, Whitelock’s is doing healthy business. At Leeds’s oldest pub, a mixed clientele samples the 10 real ales and tucks in to hearty pub food. The pub that John Betjeman described as “the heart of Leeds” celebrates its third centenary this year, but a few years ago its place in the city’s firmament was less secure. Whitelock’s, like many other pubs, had fallen on hard times and had lacked investment from its owner, the pub company Spirit Group.

The giant pubco had imposed a limited range of drinks and a generic menu of nachos and other dishes at odds with Whitelock’s character. Loyal customers drifted away. Dave Herbert, the pub’s manager, says: “The previous owner had given up a bit and that was reflected in sales, which were incredibly low.”

Whitelock’s was rescued by Ed Mason, owner of London brewer Five Points, who took over the lease in 2012. Gross turnover was £8,000 a week but now it takes three times that sum and is profitable. The pub is still owned by Spirit.

Whitelock’s is 200 miles from Mason’s brewery in Hackney, east London, but he knew it had potential for revival from his time at Leeds University in the 1980s.

Mason’s formula for Whitelock’s involved more than scrapping the nachos. He widened the range of real ales to reflect the boom in independent Yorkshire brewers, came up with a new menu and, where permissible, upgraded the Grade II-listed building. He uses social media to engage with customers.

While Whitelock’s was revived, pubs are still closing their doors at an alarming rate. According to the Campaign for Real Ale (Camra), 1,661 closed in the first six months of last year – 31 each week. Many have become supermarket convenience stores, some have been turned into homes or restaurants and others stand empty.

Total beer sales fell from 35.5m barrels in the first quarter of 2000 to 27m barrels in the same period last year. On-trade sales slumped by more than 10m barrels in that time, while off-trade sales rose by more than 2m barrels as supermarkets sold beer at rock-bottom prices. The smoking ban, falling real incomes and the rise of the internet also kept people away from their local. Yet many pubs are thriving under new management, and new ones – more than 800 in the first half of 2014 – continue to open.

A short walk up Briggate – the thoroughfare that runs through Leeds from north to south – and down one of its alleys is the White Swan. The pub, attached to a theatre, dates back to the early 1700s, but lost its way after a string of revamps that saw it renamed Barney’s and Bar Pacific among other things. Previously owned by another pubco, Mitchells & Butlers, it closed for two years before it was bought by Leeds Brewery, a brewer launched in 2007 by two graduates from York University that now pumps out 60,000 pints a week.

The White Swan’s pale green woodwork is typical for a gentrified urban pub and Leeds Brewery’s co-founder, Sam Moss, 30, sits drinking a pint of Leeds Pale. From the beginning, he and his partner Michael Brothwell wanted to combine brewing and pubs, he says. “We raised money to run a brewery and to have our own pubs. The brewery and the pubs are absolutely inseparable as we market our brand and build the company.”

Moss says the revival of pubs like the White Swan is linked to the renewed popularity of beers made by brewers independent of the big companies.

Britain now has more than 1,200 breweries. The total has increased 10% in each of the last two years – a number not seen since the 1940s – and more per head than any other country. Independent brewers are helping keep pubs alive by providing interesting products, and, increasingly, by buying the premises.

In Ilkley, a spa town 17 miles outside Leeds, Wharfedale Brewery bought the Albert, sited on Ilkley’s oldest pub premises, from pubco Enterprise Inns in 2012 as the base for its fledgling brewing business. After spending £200,000 transforming it into a modern version of a traditional Dales pub, Wharfedale opened the Flying Duck in November 2013, selling nine real ales, including three of Wharfedale’s own.

Nick McNeice, the Flying Duck’s manager, ran the Albert in its last days as an Enterprise pub and says the business takes four times as much revenue as before.

“It’s incomparable. Enterprise made it so difficult for you to make money or to try anything different. It came down to what they charged me for beer. You’re forced to buy from them and there’s no way you can compete with other pubs.”

What McNeice is describing is the “beer tie”, the arrangement that lets the pubcos charge their tenants rent and require them to buy their beer at more than the market rate.

Camra’s Neil Walker says: “There is a massive imbalance between the licensee and the large pub companies. If the company is squeezing the tenant by charging higher rent or too much for their beer there isn’t much they can do. The large pub companies are really property-owning companies. They are happy to sell off their pubs if they can get better prices by selling them to Tesco or for flats.”

At the heart of Camra’s campaign to protect pubs is a belief that they are a special kind of business. They are, the argument goes, a peculiarly British focal point for community activity and classless interaction. A Camra survey found that three-quarters of adults thought pubs were a valuable part of British life.

Politicians are coming around to the same point of view. In November, MPs unexpectedly voted to end the beer tie for big pubcos, allowing licensees to pay “market rent” and to buy their drink in the open market. The vote followed the government’s introduction of a code of conduct and an adjudicator to resolve disputes over rents and beer ties.

Despite the thousands of closures in recent years, there are still almost 55,000 pubs in the UK. Camra wants planning laws changed to make it harder for pubs to be converted to supermarkets and other uses.

In London, Antic specialises in opening or reviving pubs in unglamorous areas where professionals unable to afford city centre houses have settled. One such pub is the Red Lion in Leytonstone, in the east of the City. When Antic bought it from Punch Taverns in 2011 it was called Zulus and was falling apart. After a revamp, including removing three false ceilings, the pub is one of Antic’s most successful and serves real ale and food to Leytonstone’s cohort of middle-class residents.

Of 22 potential buyers, only Antic and one other wanted to keep the site as a pub, meaning a now thriving facility was nearly lost to the community, Antic’s founder, Anthony Thomas, says.

Leeds and London are not representative of the UK. They are cities with universities, large professional populations, and relatively high disposable income.

But Moss from Leeds Brewery says there are many more pubs crying out for transformation. “We’ve seen great pubs close that shouldn’t have closed – but a lot of pubs have closed because people weren’t using them; because the offer wasn’t particularly special and people’s drinking habits are changing.

“Gone are the days when a village can support four pubs. But there will be one pub: and if it’s well run it will be the most popular pub that everybody visits.”

 

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