As a result of the changes in the UK brewing sector in recent years, pubs without brewery ties find themselves in a strong negotiating position when purchasing beer, which can have a positive effect on their trading positions.
As well as straight discounts dependent on the volume of beer sold, many brewers offer a range of discount ‘packages’ to encourage publicans to continue purchasing beer from them rather than from a rival. These discounts come in a variety of forms:
- Off invoice discounting: the price of beer on the monthly invoice is reduced by an agreed percentage
- Retrospective discounting: beer is invoiced at full price, but the brewer sends the publican a rebate cheque monthly, quarterly, six-monthly or annually
- Free stock: similar to supermarket promotions, e.g. buy four kegs, get one free, etc
At times, some brewers offer a combination of all three discounts!
If you negotiate these discounts and agree to pass them directly to your mortgage lender as part of your loan repayments, the chances of your loan application being approved will be improved.
Publicans no longer need to buy their beer from a brewery at all! Competition between brewers has led to the creation of purchasing consortia of independent pubs and also of national wholesalers.
These organisations are able to buy a large variety of beers in bulk from the market leading brewers. In addition, they are also able to source guest beers from smaller brewers. These middle men can then provide pubs with a wider choice of beers to offer to their customers, often at lower prices than an individual publican could negotiate with a brewer. In addition, as wine consumption in pubs rises, these wholesalers are also supplying an increasing number of outlets with a wider range of better quality wines than could previously be obtained in pubs.
- Pubs without brewery ties can obtain significant discounts on beer purchases
- These discounts come in a number of different forms
- Wholesalers and purchasing consortia are supplying an increasing number or pubs