MY BIOGRAPHY. |
CHAPTER 41. The Slippery Slope. |
1. When the term 'The Slippery Slope' is used it is usually associated with either a decline or very rapidly heading in a direction over which one has little or no control. Both were true in my case as things very rapidly began to fall apart and even now with hindsight, I still feel there was very little I could have done to prevent the ultimate outcome. Things seemed to just creep up on us and although each item or incident, in itself and in isolation, was fairly insignificant, collectively they were devastating. Some things we should have seen but even if we had there was nothing we could have done about them. Looking as far back as possible, I am sure that my wife came closest to identifying the onset of the initial rot when she said that the pub trade started to decline from the first day that Supermarkets started selling canned beers. Although canned beers were nothing new. They were initially manufactured by the Krueger Brewery of Richmond, Virginia, USA and first went on sale in January 1935, four months before I was born and I am 68 (2003). What we are talking about here is when canned beer became readily available in UK Supermarkets. Up to that point the trade had worked well alongside the Off-licenses but once Supermarkets started offering cans and bottles at less than we could buy them for, then the inevitable was bound to happen. The bottom end of our retail market turned to four cans and a video and also to the strong premium beers and ciders at knock down prices. 2. The Pub Trade itself did themselves no favours when they started pushing for longer opening hours, without thinking how they were going to handle them and they played right into the brewers hands and left themselves wide open and available to be kicked in the teeth later. They forced the issue and with the help of others, 'Camera,' an organisation of 'Piss Heads' who know nothing about anything and a load of other idiots, parliamentarians and the likes, created a monster for which the pub trade has since paid a very high price. The brewers, as usual don't give a damn because as one brewer put it, when beer is in a can and it leaves our brewery we have little or no responsibility for it. When we sell it to a pub we have all the problems associated with licensees and our property that they live in and all of which constantly needs repairing and upgrading. They may have made less profit out of Cans but they had grealty reduced overheads associated with them and so they went along with the Supermarkets and to hell with their traditional outlets. 3. So the attitude of the breweries changed and along with that the way they operated. To get round the newly introduced legislation, that was introduced to break down the monopoly situation, and one of the last remaining Feudal Systems whereby the job went with the home and vice versa and to loose the job was to loose your home, they 'sold off' all the properties that were in excess of the few they were allowed to keep under the new law. That was a laugh in itself because all they did was form Senior Management breakaways, from their own companies, who borrowed vast amounts of money, and purchased all the properties. Then the fun started, as now there were two very large management structures, with their prestigious office blocks, to keep and maintain out of the profits of the beers sold through the pubs. I don't know if this was correct but I suspect that in the past they had made such vast profits from beer, which cost next to nothing to produce, that they really had little idea how much the property side had always cost to run and maintain. But the new property companies soon found out and when beer sales dropped and Supermarket sales increased they really got their knickers in a twist. The breweries saw pure profit on each barrel of beer they sold to the property company and they liked what they saw and hiked up the price to make themselves and their share holders very happy indeed, not to mention offsetting some of the profit losses on cans sold to Supermarkets. The property companies, not making as much as they wanted out of increased beer prices, put up property rents by a ridiculous amount and of course this naturally meant that the beer, at the pump head in the pub, went up in big jumps until the inevitable happened. The sale of beer went down because none of this put anymore money in the pocket of the 'drinker' who only had so much disposable income so he/she either drank less or bought more value for money beer, in cans, from the Supermarkets. At this time the industrial concept of having Accountants run industry was at its height and so the inevitable happened again, accountant's logic kicked in and they applied the 'accountants adage' of, 'if we are selling less and so making less profit then we must put up the price to offset it.' Great, and so up it all goes again and what happens; less is sold. 'No problem,' say the accountants. 'We will put up the price yet again only this time we will add three amounts on. A percentage to pull back what we have lost, a percentage to make the profit we should be making and an additional percentage to offset any reduced sales this causes.' What happens now? Well it does not take much common sense to work that one out. Beer went up by an astronomical amount and even less, than they anticipated, was sold. Profits went down from beer sales so rents were increased. Fortunately for some, which did not include the traditional pubs, but which did include a few managers and staff and a lot of punters, with such as Yates and Wetherspoons, companies who saw the light and came into the centre of the towns and opened large, and therefore high volume outlets. These were luxurious establishments to boot that appealed to the younger end, where most of the disposable income has always been, sold beer at sensible prices and did very well. That helped to put the writing on the wall for the average pub and along with them their property owners, their landlords, who by this time were still drawing vast salaries but were not even making enough money, in their business, to pay off the interest on their original capital loans. At this time I think even their accountants were stumped and panic set in. They started to bring groups of people round, in luxury coaches, many of them German, who all admitted they were bankers and financiers and so it reached a stage where each morning, when the mail arrived, you looked for the letter which would inform you who your new landlord was, for the next few weeks at least, and how much he wanted for his rent and beer, which still came from the same place and was ordered and paid for through the same channels. Contact between you and your landlord or supplier became very strained and almost nonexistent, unless, of course, you owed them money. So-called Area Managers (never renowned for being truly street wise and more often than not, uttering stupid remarks and making irrelevant statements) were reduced to just lackeys and mouthpieces for these faceless people who had only one thing in mind, putting up prices. These same Area Managers, who previously had been God in so much as they had the power of life and death over both sides and what they said or did was the law within the trade and was thereafter carved in stone, were reduced to wimps with no power and with nothing left but a mass of excuses for doing nothing. They would not listen, why should they as they could do nothing and so they hid behind the shambles we all found ourselves in and used it as an excuse to sit on the fence and be ineffective unless it was to hand out formal notice of price and rent increases of course. 4. That was the start of the final demise of the 'Great British Pub.' Some would survive, or appear to do so until their money ran out or they got fed up of eating into their capital reserves just to prove they were successful, to the trade and outside world. Things got so bad that Area Managers were suggesting that one member of the team, either the husband or the wife, went out and got another job so that they could live in the Pub and perhaps make a little extra selling beer at night and do you know, some silly buggers did. But even they did not last long. 5. Now of course it is all very different. Many Pubs have more Landlords than they have beer deliveries, their rein, where they have the answer to everything, being down to as little as six weeks. Twelve weeks to a year is about average and recently I personally saw something that was very hard to believe. A local pub put up a large plastic banner, on the outer wall, declaring that the business was under new management. It was still up there six weeks later and saved the next guy from putting it up when he moved in. This of course will now be the norm and will last as long as the current unrest and instability of UK industry in general, makes people redundant and sends them, with a wad of money, straight into the arms of the Pub Companies who promise them the earth, have just the place for them and have been waiting for them, as they are a natural and the interviewer can see them, in his minds eye, behind the bar, laughing and joking with mates and enjoying that odd pint that costs him next to nothing. What a way to make a living and they fall for it and join the 'six week queue.' Weeks later when the redundancy money, that was spent on 'ingoing' and refurbishment plans, that will sell more beer, and where there was tremendous scope for all that, as the last guy was not really suitable and didn't try and so had to be let go and the rent and cost of beer is not in the cash till, its all over. Suddenly they are the last guy who didn't try and are left wondering why, when they first applied, all the company was interested in was how much cash they had, which pub, from a long list, did they want and when could they move in? Also, if they were very enthusiastic and considered a soft touch and didn't quite have enough to cover all the ingoing then a Brewery Loan could be arranged and paid back weekly, with nominal interest, way above Bank Rate, along with the rent and all out of the anticipated takings. Not the actual takings, they were never discussed and if brought up easily brushed aside with natuarally, 'The last guy didn't try, wasn't suitable and so we don't know the true current potential but we know it is out there because we have past records.' Bollocks. These records aren't worth a light, are irrelevant and refer to a long gone past, and all they are interested in is getting someone in a pub and extracting as much money, with dubious promises, as they can before they have to start the whole process over again. How long you lasted was determined by how much you threw at it in the first place. Also, much to the disgust of long standing licensees, the few that were left, it no longer mattered if you had a criminal conviction. Originally it was one of the first things a Brewery looked very closely into but now is not even considred by some courts, when an application goes before them, and of course it is acceptable to the Police because it cuts down their work load looking into these applications and releases funds from their budgets to go into such things as their own retirement pensions and sick pay. There are people holding Licenses and standing behind bars that years ago would have had great difficulty getting into decent pubs, if not for their doubtful character but for the way they dress now, in shorts below the knees and baseball caps with the peak hanging down their backs and I will ignor the language that is regularly used and the type and calibre of customer they attract, thus helping to drive the decent people, the majority, into buying the wines and cans from the Supermarket. 6. There are also now many Pub couples where one of them has another full time job, just like the Area Managers originally suggested. But that is recently. For the moment we are still considering my demise and the many factors that brought it about. 7. The business was ailing, for many of the reasons already discussed, and we had also slowly been reduced from opening all day, every day, including Xmas Day, to not opening before 7 pm and closing whenever we felt like it and those occasions became more frequent as the number of hours increased where you stood there, open for business, and no one came in. There are just so many times that you can go round and wash all the optics and clean, yet again, under the bar before you start talking to yourself and then cursing when someone actually does come in and complains about the beer as it was 'the first pulled off.' It might help here if I explain and forgive me if you already know all about it, but beer deteriorates once it is opened and air gets into it. Necessary you understand, that this should happen, to be able to activate it and dispense it. Also that which lies in the feed lines, for any length of time, goes off. So at the beginning of each session and in anticipation of selling it, quite a large amount, depending on the length of 'run' from the cellar to the bar, has to be pulled off. Now if this beer is held in sterile, stainless steel buckets it can be carefully filtered back into the barrel and recycled and sold. That was all well and good when we were selling beer in barrels that held 36 gallons, the pollution potential was very low and if there was only one feed back per barrel then that was fine. But later when we were obliged to cut down and only buy 18 gallon barrels, the reason being that the 36's reached the stage where the air in them caused them to go sour before we managed to sell them, then there was feed back problems. The amount drawn off was the same but the total volume involved was almost too much for an 18 gallon and so if it had less than 11 gallons in it the pull off had to be wasted. It would not keep long enough for the next barrel and of course it would mount up with each 'pull off.' So it had to go down the drain and naturally with it went a large proportion of the profit from that barrel. A far cry from the days when I could boast that the fastest, eight staff, and myself had sold a 36 gallon barrel of beer was in 45 minutes. The breweries did little to help this situation for us but very quickly turned their Managed Houses, those establishments run by a 'Paid' manager, employed directly by the brewery and not covered by the new Landlord and Tennant Acts, over to selling only 'Bright Beers.' Chemical compounds as opposed to brewed beers and supplied in sealed containers and artificially activated by injecting compressed gas into them when dispensed. It was, legally, not possible to feed back into these containers and therefore, theoretically, pollution, from feedback, was not a problem. Loss of profit being made up by the fact that the, so-called, beer was cheap and nasty to produce and therefore was supposed to keep everyone happy. It might have done for some but it did little or nothing for the pub trade that for generations prided itself on its 'Real Brewed Ales.' One more nail in the coffin for the Pubs but marvellous for the breweries as it was the same junk, made by the same process, as that put in cans for the Supermarkets. 8. How long would I have lasted if things had been 'normal' and if I had just suffered from everything that the trade was throwing at me? I don't know. Perhaps a short while. Perhaps a little longer. I really don't know, as there were so many other things that seemed to come along from literally nowhere and grind us down until in the end we could take it no more and folded. 9. When we went into the Pub Trade and for many years before that, there were three types of licensee, the Manager, the Tennant and the Leaseholder. The Manager was employed by the Brewery, was totally controlled and supplied by them, and his wage, which was fixed, came out of the till, with a bonus, usually annually, that reflected his efforts. The Tennant was self-employed, paid rent for his Pub, was supplied by the brewery for everything and usually had sharing plans with the brewery for a percentage of the takings from Juke Boxes, Fruit Machines, Cigarette Machines etc and was on a one to a three year renewable lease. The Leaseholder, which we were, bought his lease from the previous owner, with the approval of the Brewery and this provided security of tenure. It also meant there were no sharing plans. The brewery only supplied bulk beers leaving the leaseholder free to purchase everything else wherever it suited. Rent was reviewed every three years and was considerably less than that paid by a Tennant, because the Brewery made no contributions towards repairs or general maintenance and refurbishment of the property. The long lease agreements had been introduced some years before, by the Brewery, as a means of getting outside capital invested on modernisation and refurbishment and then sitting back and reaping the rewards from that and perhaps a less rent but also for no costs for maintenance and repairs. Also from the initial outside investment which was meant to sell vast volumes of beer and which it did when helped by the lessee, who had his money invested and naturally wanted a return on it. This all worked well, as it did for us, when Pubs were full and the trade was doing well and we all had the opportunity to work hard. But once the sell off of Pubs to the property companies started, prices for beers went sky high and cans appeared more and more on Supermarket sheves, things began to change. They tried to break the lease agreement on rent, previously agreed to only be increased by the cost of living index, claiming they were a different company and where the lease stated only that the cost of living index would be used as a 'fair guide' to both sides. I tried to challenge this through the LVA, my trade organisation, who happily took £165 subscription per year from me and promised to look after me in exchange. They said to pay the rent, as to withhold it was another breach of contract that they, the brewery, could get me on, and that they, the LVA, would challenge it for me. I paid the increase in rent and nothing happened for weeks. The brewery, through their Area Manager, expressed their disappointment at my lack of understanding and cooperation and from then relationships became very strained. I no longer saw anyone for weeks at a time and my phone calls were never answered, despite assurances from their switchboard that they would, and if I wrote, which I felt obliged to do on several occasions, I would get a reply stating that my letter had been passed on for attention only to be answered much later by someone who did not know why the enquiry had been passed to them and as it was not their area of responsibility, so they were sorry, but could not help. It was also suggested that I had accepted their terms as being reasonable and had demonstrated that by paying the increased rent. The LVA eventually came back and said they had agreed, on my behalf, a compromise whereby I would in future, pay half the difference between what it should have gone up to and the amount the brewery had put it up. As far as I was concerned that was far from satisfactory as it was still way up on the 'index linked' figure and created a president for the future. There was no offer of back pay and the advice was, pay the new figure and keep quiet. A big difference between how good and powerful the LVA claimed to be and how big and powerful, in actual fact, they were. I often wonder how these compromises were arrived at, as it would cost the breweries very little to show their appreciation when push came to shove and a sweetener was the order of the day. After that things went from bad to worse with an almost continuous barrage of harassment where they continuously tried to change the rules. Typical of these was the attempt to state that while they had no sharing plans for the income from my gaming machines these machines and my Pool Table never the less occupied floor space that could be occupied by drinkers thus reducing their potential profit from drink sales. Therefore they felt that because of that they were justified in introducing 'a loss of profit ground rent' and this they calculated would amount to £X and would be added to my next payable rent, but they preferred a one off annual paymnt of £X x 52 which they proposed to add to my next Direct Debit unless they heard from me beforehand and of course getting hold of anyone prepared to do anything was 'Nye on' impossible. Everything introduced was always explained away as being a 'fair revue' of the lease in the current financial climate and changing circumstances and was always admissible because it did not say otherwise in the lease and the LVA always agreed. 10. The Compressor Unit, which was outside the building and was part of the 'Chilling System' to control and maintain cellar temperatures, was theirs. A letter came to say that they were no longer going to maintain this equipment but as it was an integral part, necessary to keep their products in good condition, they insisted that their Service Engineers overhauled it, not once a year, as had been past practice, but from now on it would be twice a year and that the invoice would be sent directly to me. I wrote and pointed out their lease agreement, with me, regarding this equipment and after passing it round and round, during which time service engineers had been and I had been served with the invoice for a ridiculous amount of money, they came back to say that as I was not prepared to have their contractors do the work they were quite happy for me to make my own arrangements as on settlement of the enclosed invoice for £4,000 the equipment was all mine. Past experience forced me to bypass the LVA and I went straight to a private Solicitor. He got the sale of the equipment stopped and the maintenance scheduled for once a year reinstated and said to wait and see if any further invoices were forthcoming before we took futher action. When asked, he said he had done nothing about the invoice I had already paid, and which I had been forced to pay because of this breach of contract over bad debt which they, the brewery, stuck under my nose with regular monotony when it suited them, and presented me with his own bill for a stupid amount of money. They were not the only occasions. There were many more and one which stands out way above the rest was an argument over who was responsible for what following a very bad freak storm which left us with a lot of damage both inside and out. 'You are,' they said. 'You are insured and so it's all yours.' But I was, quite rightly, only insured for what was my responsibility but then my insurance didn't help because they started playing silly buggers and saying that this and that would not have happened if this and that had not happened to the brewery part of the property. In-between times the brewery was digging their heels in and doing nothing and I was loosing business. 'No problem,' claimed my insurance. 'Claim off the brewery, it is their fault.' 'But I am insured with you for this sort of thing.' 'Only when it is your fault and it's not, it's theirs.' Bastards, all of them, and as you will gather by this time my relationship with the brewery had gone beyond the point of no return. 11. Hardly enough to put the average business man off, you might feel and you could be right had it not been for everything else that either came before, after, or was piled on top continuously and relentlassly and without respite. 12. You can shoulder and counter most things if there is the money about to cope with it all and don't forget that up to that point, where the trade took a nose dive, everything had been dealt with and half the problems we faced did not materialise until others, in an equally dodgy situation and perhaps panicking more than we were became down right unreasonable in their demands and in almost everything else to boot. 13. Right out of the blue, one day along came my favourite brewery representative, manager or what ever he called himself, and handed me a letter, to make sure I got it. This letter informed me that the company, having experienced some financial and cash flow problems, had no alternative, if we were all to survive, them survive, they really meant, but to insist that in future all orders would be cash with order. This was naturally to my advantage, or so they claimed, and to show their appreciation all future orders would be subject to a 5% discount. It was not many weeks before their price list had gone up by considerably more than 5%. Anyhow I was left, having been told there was no alternative, with full instructions and a 'Paying in' book. Basically what this all meant was that when the girl rang me for my weekly bulk order I had to pass it on to her and then ring off and wait. Either that day or the following day the Accounts Department would ring back with a total value for the order, that weeks rent and anything else they said I owed for that week, and give it to me as a total and then finally issue a code number to go with it. I then had to take the paying-in book provided and filling in the total amount and adding the code number given, get the required amount of cash and take the whole lot to their nominated bank and pay the full amount in. Thereafter we had two choices. We could wait until the cash went through the system before they delivered or we could fax a copy of the slip through to them and they would deliver the next day and we were trying to run a pub, not spend all our time farting about and making life easy for them and paying to send faxes into the bargain and then ring to see if they had received them and ensure they would be delivering as promised. 14. There were two very important down sides to all this and they became apparent very quickly. We sold more beer over Xmas and Bank Holidays than we did at any other time and it was always quiet in the preceding weeks and run up to them and the rent was still to pay however small the orders for those weeks might be. So where did we get the cash to pay, in advance, for a very large order that we would need to place, for, lets say, Xmas and New Year or Easter? Obviously the Bank. Another of my great favourites. Call you 'sir' when you are daft enough to borrow as much as they are daft enough to lend you. But don't they show themselves in their true colours once there is a hint of a problem? |
MY BIOGRAPHY. |
