Wetherspoon chairman, Tim Martin, has responded to concerns from the Society of Independent Brewers (SIBA) that price cuts in his pubs could have an adverse effect on brewers.
Here’s the full text of the exchanges. On September 10, James Calder, chief executive of SIBA (pictured), wrote:
“Dear Tim, Your commitment to deliver value to your customers is admirable. Making quality independent beer accessible to the widest range of people is something we should all strive towards. As a category, you are a huge supporter of cask beer. SIBA and J D Wetherspoon have worked successfully together on ensuring quality beer in your pubs through the FSQ food safety standard, and on promoting local breweries in your magazine.
“However, your recent announcement that beer prices would be cut further has caused significant concern amongst the UK’s independent craft brewers, whom I represent. Regardless of their individual views on Brexit, many in the brewing community feel that selling a pint of beer for as low as £1.39 and creating the impression beer will remain that cheap is dangerous. Beer sold this cheaply has to be made cheaply. The beer my members make is a quality premium product and should be treated as one. It is brewed with the finest quality ingredients by artisanal people with real skills. It has genuine provenance from a brewer embedded in its community. It comes from a brewing business that reinvests its profit back into its local community.
“Selling a pint of beer for as low as £1.39 may appeal to consumers, but it doesn’t support independent craft brewers who fear further downward pressure on price. This combined with inevitable inflationary increases in all their costs. Our research shows that most brewers operate on very low profit margins and many struggle to survive in a very competitive market.
“SIBA does not take a political view on Brexit. We have helped our members prepare for a no-deal Brexit on October 31 and are keen to make the most of whatever happens. We’re all trying to support British industries in a post-Brexit economy. Yourself more than most.
I strongly urge you to commit to pay brewers a fair price for the beer they make’
“But moves like this signal a race to the bottom to the brewers that supply your pubs. I would like to request a meeting between us where I would be accompanied by a number of independent craft brewers. Particularly, we’d like to discuss ethical, flexible pricing to brewers which will allow customers, brewers and J D Wetherspoon all to prosper in a post Brexit economy. Whilst ensuring value to the consumer, I would strongly urge you to commit to pay brewers a fair price for the beer they make.”
Tim Martin responded:
“I can understand the concerns of your members about a price of £1.39. However, the price only applies to a small number of our pubs (36) where the sales volumes are, on average, low. The ‘normal’ price, which applies at 625 pubs, is £1.69 versus a price for SIBA members’ beers of about £2.15.
“We feel confident volumes of your members’ beers won’t be affected, and we won’t be asking them for any reductions in price. Indeed, we haven’t asked Greene King, the supplier of Ruddles, for a reduction either. As you point out, Wetherspoon has an excellent relationship with SIBA and its members — and we don’t believe our Ruddles initiative will have an adverse effect.”