Page last updated at 02:32 GMT, Thursday, 7 August 2008 03:32 UK

Cask ale seeks to beat beer hangover

By Simon Atkinson
Business reporter, BBC News, Earls Court

Beer drinker
UK drinkers have increasingly drunk wine and cider as well as beer

The bars inside the Earls Court Exhibition Centre - complete with the heavy branding of a well-known lager - doubtless do well during the venue's concerts and trade shows.

But this week they look like being among the most deserted drinking spots in Britain.

There was certainly little demand for their pale fizzy liquid served in plastic as the Great British Beer Festival kicked off - even if a few punters were happy to use the high stools for a sit down as they tucked into some freshly made pork scratchings.

SOME BEERS AT THE FESTIVAL
Alligator Ale
Dancin' Hen
Cherry Popper
Mother in Law
Bede's Chalice

Indeed the real ale aficionados - about 60,000 of whom are expected this week - can afford a gentle snigger, as they look across to the brightly-lit but empty bar.

For while overall pub beer sales have sunk to their lowest level since the 1930s, real ale has weathered the storm a little better.

'Very active'

Overall beer sales in pubs fell 10.6% between April and June compared with the same quarter a year ago, according to the British Beer and Pub Association (BBPA) - a drop of about 1.6 million pints per day.

Pork Scratchings stall at the festival
To go with a traditional beer, you need a traditional bar snack

Meanwhile, Nielsen research suggests that overall beer sales in pubs are 9% lower than a year ago - while they remain steady in supermarkets.

But while lager slipped heavily, cask ale sales dropped only about 1.3% last year, with some brewers such as Fullers reporting a slight increase in demand.

"The only breweries that seem to be brewing more beer now than before, that are seeing their sales rise, are the smallest breweries," says Iain Loe of the Campaign for Real Ale (Camra), which organises the festival.

In many ways you've got the perfect storm for pubs
Graham Page, beer analyst, Nielsen

"There are 600 microbreweries in the UK and 35 family brewers. This sector of the market is very active."

The new tobacco?

Times are tough for the industry as a whole.

"In many ways you've got the perfect storm for pubs," says Graham Page of Nielsen, pint glass in hand.

ANNUAL BEER SALES
Lager - 7.87bn / 2.76bn
Ale - 3.62bn / 443m
Cider - 1.22bn / 572m
Stout- 954m / 115m
(Pub and shop sales, year to May 2008)
Source: Nielsen

"There are the supermarkets selling alcohol very cheaply, while in the pubs it is relatively expensive and you can no longer smoke.

"Then you have got an economic situation with everybody having to adapt to the lack of credit and spending power, and a government which is upping the duty on alcohol and making it the new tobacco in terms of the damage they say it is causing to our health."

And for real ale firms, there is the battle of getting a pump onto more bars, he adds, with many pubs tied to either a chain or a brewing giant.

'Provenance'

It is a situation that means that even amid falling demand, the 10 top selling beers - led by Carling and Fosters - have more than two thirds of total sales, a market share predicted to rise to 80% by 2015 as the brewing giants flex their muscles.

Steve McDonald
There are pubs closing which is worrying - but it tends to be the less well-run pubs that do shut
Steve McDonald, Brewer

But Mr Page, who has been in the industry for 40 years, said there was a reason for cask ale demand holding up relatively well.

"It has provenance, it can be organic, it can be green, it can be local - all things that people are looking for these days," he says.

"So for pubs it's something that looks good to have on your bars, and it can drive traffic."

The same traits meant that supermarkets were happy to stock an increasingly wide range of bottled ale.

"It fits in with the pressure that they are under to offer variety and to be more local," Mr Page says.

'No downturn'

Over at the tombola stall, the prizes are mainly good pub guides, beer glasses and bottles of ale.

Then there are the T-shirts - with odes to legendary drinkers such as Oliver Reed and a parody of Lord Kitchener war recruitment posters asking: "Are YOU a Draught Dodger".

But despite the distractions, there does not seem to be much talk of anything other than beer and the industry's prospects.

After just a couple of hours, Steve McDonald had sold out of his limited supply of the award-winning Severn Sins - made at his Severn Vale Brewing Company, which produces about 15 barrels of beer (approximately 4,300 pints) a week.

Andy Mitchell
Nobody is going to buy a beer just because it is organic. It has to taste really nice
Andy Mitchell, brewer

And he argues that those who made "decent beer" would manage to stay afloat.

"The market might be getting quieter overall but we've not noticed a downturn in business at all," he says.

"There are pubs closing which is worrying - but it tends to be the less well-run pubs that do shut.

"And while the supermarkets sell drink cheaply, it's a different market. If somebody wants a nice ale, perhaps something different, they will seek it out in a pub."

Innovative

Over at Bar UnusuAle, there is a collection of niche beers - including those for vegetarians and drinkers with an intolerance of wheat or gluten.

Stalls at the festival
Traditional pints are competing with newer, niche products

And the bar's manager Andy Mitchell believes that brewers sometimes need to offer something more innovative.

Hel has two of his own Spectrum Brewery beers at the festival, including the vegan Old Stoatwobbler, made at a carbon neutral brewhouse in Norfolk.

"It's something different and people like the concept, but it has to taste good," Mr Mitchell says, wiping a wisp of froth form the edge of his moustache.

"Nobody is going to buy a beer just because it is organic. It has to be organic and also be really nice."

In demand

The only section with bigger queues is the cider and perry bar.

And while manager John Lewis makes clear his distaste for Magners and rival mass-market ciders, he is grateful for the way they have boosted the profile of the drink.

In 2002 the bar sold 1,200 gallons of ciders and perries (made from pears rather than apples).

This year there are 2,800 gallons available across 110 different brews - with an average strength of about 6.5%.

John Lewis
It has been a good few years for small cider producers
John Lewis, Manager
Cider and Perry stall
Great British Beer Festival

"When Magners advertise, they don't just advertise Magners, they advertise cider, and that has been great for us," he says.

"Certainly the cider producers that I know are not complaining about falling sales. What we don't know yet is what effect any recession will have."

And he is praying that there will not be a repeat of last year's event, which saw the cider run out at 10pm on the Friday of the festival.

"I just called suppliers and asked them to get whatever they had onto lorries and driven up to London straight away. We sorted out the invoices after it had all been drunk.

"It has been a good few years for small cider producers. We're just hoping it can continue."


SEE ALSO
'Unique' pub shut after sign row
07 Aug 08 |  South East Wales
All aboard for bus beer festival
20 Jul 08 |  North East Wales

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