Buying beer cheaper on the open market?

If you own a freehold pub, hotel, social club, or restaurant, the traditional and accepted method of buying  beer  is to buy it from one of the big brewers. It works like this , you decide  what products you want to sell on your  bar, the brewery  rep pays you a visit, shows you a list of beer prices, you agree to buy, the rep organizes the installation of the dispense equipment, beer delivery date and that is it, the deal is done. You are now signed up to a deal that says that for as long as you have the brewery owned equipment on your bar you have to buy that breweries beer at their prices. The brewery are happy and you are too, as you can now sell the latest Extra Cold, Smooth Pouring,  triple filtered Afganburg lager. But just a minute should you really be that happy, have you actually got a good deal, one that will allow you to sell beer and make a decent profit?

Is there perhaps a way to get a better deal, perhaps a way that gives you the power to buy beers cheaper without  signing up with one of the big brewers.

Well here at Inndoctor we have heard of another alternative way of maybe getting a better deal. To be honest we cannot claim credit for this idea as some clever licensees have been doing this for some time, we are just letting you know there is an alternative method if you are free of tie.

Well cutting straight to the chase-it seems the idea is to buy your own dispensing equipment and buy your beer on the open market. Simple isn’t it. Having your own kit gives you the freedom of buying your beer where ever you want, and at a price that suits you. For instance there are always wholesalers looking for new business who are prepared to be more flexible about prices. There are always deals to be had. The advantages of owning your own dispensing system seem to be many.

For instance a wholesaler might be offering a great deal on Fosters, but your current lager is Carling. No problem, change the font and keg coupler either yourself or ring your local independent contractor and hey presto Fosters lager is now on sale.  “T” bars or some standard counter mountings would be ideal for this. Seemingly you are no longer under the control of suppliers who determine what you have to sell and  at what price to make a profit, you are in the driving seat of your own business for once. Another advantage might be that when a brewery rep called  he  would no longer have the bargaining power over you. The dispense kit belongs to you and if he wanted his product on the bar, then he would have to get his discount book out and give you a decent price.

As for initial set up costs, well these might not be expensive as you think, with an average pub dispense system installation costing as little as £1800 to £2000. A lot of money you say, true, but by making more profit per keg that cost might soon be returned. Does this seem too good to be true?

There are some obvious disadvantages we can see, but hardly insurmountable ones. For instance, if you own your own dispense system, then brewery technical services would not repair it. Also your system would still have to conform to all current Brewers Society health and safety regulations. However there are lots of excellent independent local Cellar Service companies out there, who could both install and maintain your system for a reasonable cost, still making owning your own equipment a worthwhile proposition to consider.

With more and more pubs suffering as a result of spiralling costs then it seems only common sense for alternative buying strategies to be considered. If as licensees we were buying any other product to sell or use in our pubs we would not just settle for one supplier, we would seek out the best value deal from anywhere. So why when we are buying the very stock in trade that our businesses rely on are we forced to buy from sources that are not the cheapest. The brewers say that part of the cost of a keg of beer is for providing equipment and service. This system of self ownership of dispensing equipment and service would no longer require these services to be provided by the brewers. If people are prepared to invest in owning their means of selling beer in order to keep the price of beer down, then it cannot be a bad thing, in fact isn’t that the free market in action.

Anyway we at Inndoctor would like to hear from you and what you have to say. Do you think owning your beer dispense system is a good idea? Let us know.