The Decimation of the Pub Industry

I have just returned home from a visit to my local(s). In my immediate vicinity, there are only three places within reasonable walking distance – the Red Lion, the Hulton Arms and the Conservative Club. Apart from these three places, the nearest ‘public (drinking) place’ is about two miles away.  I must discount the Conservative Club in my remarks because I have not been in there for years.

In the Red Lion, there were two people (both known to me) other than staff and myself, although a couple (also known to me) were arriving just as I left.

I then ventured into the Hulton Arms. In there, there were six people (not counting myself), four of whom were in a corner together and were not known to me. One person left almost immediately, leaving five persons. Shortly after that, the four in the corner left, leaving only one person and myself.

One of these pubs is a ‘Punch’ (or similar) establishment. The other is a Yorkshire Breweries establishment. Judging from my recent experience of both of these place (having been a patron of both for many years) there is no way that either of them could be viable financially. Their income cannot possibly support their costs. Of the two, the probability is that the Hulton Arms will be the first to close down permanently. Will this ’cause’ the takings of the Red Lion to grow? The answer is that it will – in the short term, but not necessarily by much. That is, if the Hulton Arms cannot command more support than half a dozen punters, the best that the Red Lion can expect is the transfer of allegiance of half a dozen.

From these observations, I cannot help but think that the demise of a pubco is imminent. The pubcos may have wealth in terms of property, but the lack of cashflow will kill them. Expect the demise of one or more pubcos imminently.

When a pub ceases to be viable as a pub, the property itself ceases to have a purpose and becomes just bricks (or stones). Its value, as a building, decreases exponentially. That means that the building itself becomes worth only the value of the bricks (or stones). I know a guy who specialises in demolishing those buildings. He makes his money by charging X for demolishing the building, plus the fact that he benefits from the sale of the bricks/stones.

That is as maybe, but we must backtrack a bit.

What happened to the ‘new awakening’ of thousands of people just waiting for pubs to become ‘smokefree’ before they flooded into pubs? The reality is that no matter how many people said that they were “more likely” to go to pubs if smoking was prohibited, few of them have done so. This illustrates the gulf between idle thoughts and action. This leads us to the idea that any survey which depends upon ‘idle thoughts’ has no value whatever.

Few pubs are not struggling to survive. I predict a catastrophe. I suspect that the reason that pub owners did not contest the smoking ban was that they had no option but to hope that the predictions of ASH ET AL were correct since they were already struggling.

The origin of the problem was the drink/driving laws. That is not to say that the drink/driving laws were wrong. It is more that those laws stopped people driving to their favorite pub and forced them to walk to a less favorite pub. As a result, many country pubs became only marginally viable.

We can see how the smoking ban, initially must have hit the country pubs hardest. They were already tottering. But then the problem caused by the ban moved to the least popular town pubs, and especially those that had no ability to provide shelters. And, all the time, the Government was pushing up alcohol taxes. The ‘Laffer Curve’ then comes into play. That is, essentially, lots of small, enclosed pubs collapse at once. For a time, the survivors benefit – but only for a short time. People who normally go to pubs just get fed up and stop going. They may reduce a three times a week habit to two times a week, and then to one time per week, and then to none.

I went to the pub tonight and, as I have describe, both pubs were empty and boring. Why bother going  since, despite the fact that they were empty, I STILL have to go outside for a fag?

Do we see the fallacy of the ASH ET AL survey? Potential, possible intentions are no way to project what will actually happen. ASH ET AL are directly responsible for the decimation of pubs because of their predictions.  But publicans who have become bankrupt have no incentive, and those publicans who are tottering on the border of bankruptcy have neither funds to pursue a legal action nor the incentive. Pubcos ought to feel the same. I do not understand why they are not suing ASH ET AL and their supporters,  so f*ck ’em.

But it may be true that the ‘magnificent edifices of yesterday are doomed anyway. Most of these places were originally hostelries – that is, places with stables for horses and accommodation for travellers. They survived only upon a large numbers of  customers. Once drinking and driving laws bit and, especially, the smoking ban in recent years took its toll, they had no future at all, except as eateries. But, then, MASSIVE COMPETITION ensued!

Cutting this long story short, one could see a future for lots of small, local bars. But what is the point of opening one such if you cannot please your customers because of an artificial ban on the enjoyment of tobacco?

It may take some time, but I predict that, sooner or later, Tobacco Control will be seen as the destructive force that it is. Bans will be repealed, and bars allowed to decide whether or not to be smoking. There will probably be not many non-smoking bars because they will be boring places, but market forces will permit some to be viable. Most will be smoking. The myth of tobacco smoke harm to bar staff will be exposed as just that –  a myth.

It is quite clear to me that one or more pubcos are on the point of collapse. They must be, since there is a downward spiral in action which will continue. No amount of fiddling with minimum prices will stop it.

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