Inhouse Brews

Shanley

Should brews that are made in a pub not be cheaper then normal brews? Was in a pub in Galway recently and they were the same price, wasnt too impressed!

Agent Smith

I think that they are still Subject to the same Duty and Tax, as say a regular beer. I do see where you coming from. personally i'd Lower tax on any beer brewed in the state.

BeerNut

Shanley wrote: »

Should brews that are made in a pub not be cheaper then normal brews? Was in a pub in Galway recently and they were the same price, wasnt too impressed!

Mostly they are: €4 a pint in Messers Maguire; a bit over €3 in Solas and Murray's, for instance.

Agent Smith wrote: »

I think that they are still Subject to the same Duty and Tax, as say a regular beer.

Beer from the small Irish breweries attracts half the excise duty as beer from the Heineken and Diageo factories.

I would agree that house beers should be cheaper; I think they could be used to help leverage down the price of all beers. But the business tends not to see it that way. There's a fear that making the beer cheaper will make it seem like it's lower quality or something. Sounds like an excuse for gouging, if you ask me.

noby

The savings on the duty will probably be cancelled out by the price the smaller guys have to pay for ingredients etc. - but I agree that brew pubs should be able to sell it cheaper, since they can go straight from conditioning tank to bar, and cut out a lot of the packaging and distribution side of the operation.

guildofevil

Most house beers are still packaged the same way as any other commercial beer, so no saving there.

Microbreweries don't have the same economies of scale as the big brewers do, nor can they bully suppliers by threatening to take their business elsewhere.

Microbreweries also tend to use a lot more expensive speciality malts than the big boys and when it comes to hops, micros actually care what variety they get, rather than just working out the cheapest way to get the required bittering levels in their beers.

When it comes to marketing, I don't think that undercutting the macro brands is actually the way to sell your beer as a quality product. People generally equate quality with price. If your beer is cheaper than Heineken then most people will think it is an inferior product to Heineken. Your beer is now value brand beer, suitable for people on a budget, but if you can afford a proper beer, why would you bother with the cheap stuff?

Another thing to consider is the possibility of falling afoul of our misguided and ineffective alcohol control laws. If you are selling cheap beer you run the risk of being accused of selling alcohol irresponsibly. If that happens, the big companies, our wonderful politicians and the woolyheaded neo-prohibitionists would fall over each other to express their outrage and concern over this sort of thing.

BeerNut

guildofevil wrote: »

People generally equate quality with price.

This is the bit that troubles me. Do they really? Where does this generalisation come from?

I certainly don't, well aware of how rubbish the mainstream macrobeers sold in most pubs are.

As a side example -- granted one not fully relevant to this discussion -- in the UK, cask beer is generally cheaper than kegged beer, and usually comes from smaller breweries. Yet I don't think there is a perception that London Pride is lower quality than Carlsberg, even among drinkers who prefer the latter.

So: does anyone on this board, when you see an unfamiliar beer which is cheaper than what you know, automatically assume it'll not be as good?

guildofevil

It's a fairly well known part of human psychology and it's not a peculiarity of the beer industry but I can give you an example of the phenomenon on action in the Irish beer market.

When Heineken did their first major push in Cork city, they priced it at about the same as Carling and it didn't do as well as they expected. A new marketing manager took over and raised the price, while simultaneously running an advertising campaign positioning the product as a premium brand. This had the effect of increasing sales.

On the English real ale issue, I think it is quite possible that some people do perceive London Pride as lower quality than, say Becks, but I don't think that most people even see them as equivalent products. Real ale is a very different drink to kegged beers. If you are either a real ale drinker or you are not and even if lager were half the price of London pride, a real alre drinker wont drink it. Likewise, if real ale were half the price of lager, a lager drinker is unlikely to drink it. The perception of quality doesn't really come into it, any more than you would consider carrots to be of lesser quality than cheese, despite the price difference.

The house beer market in Ireland is not a separate market to the general beer market because, more often than not you are talking about a kegged house lager, or red ale or stout, all of which are available in macro version too. People are comparing like with like, in which case most will assume that the cheaper one is the inferior.

I know you don't think that way about beer John and you know I don't either, but that is because we know a lot about the product in question. You have a lot of information to base your assessment of quality on, so you don't reply on price as an indicator. The average beer drinker knows absolutely nothing about beer, but has been assured by many hours of marketing that the macro product he is used to is the pinnacle of brewing excellence. Present him with an unknown alternative which is actually cheaper and he is going to see a value brand. An inferior imitation.

leeroybrown

Shanley wrote: »

Should brews that are made in a pub not be cheaper then normal brews? Was in a pub in Galway recently and they were the same price, wasnt too impressed!

I was down in the Olso myself to try out the brews. Not only are their own brews similarly priced to other beers but their prices were high even by pre-recession standards. I liked their lager and it's great to see some indigenous brewing going on but can't really see myself going back too often with those economics. Making people feel that they're paying a premium over the 'premium' product that they normally pay for isn't exactly good for business.

Edit: I'll add in the interest of balance that they are brewing relatively strong beers which would normally be pricey in the Irish market but their general prices across the board certainly won't help uptake.

guildofevil

Don't get me wrong. I am not advocating raising the price higher than the macro brand equivalent nor am I saying that the prices of beer in this country aren't crazy, I'm saying that if, for example, you sell a lager for significantly less than it's macro equivalent in the same pub, it will be seen as a value brand by most patrons. If it is priced at around the same as the macro equivalent there will be no automatic assumption of inferiority.

If you are in a brewpub situation, I think the best thing you can do is eliminate all macro brands from the taps and only sell micro products (either your own or "guest" microbrews). That way you can set your prices as you see fit, with value, middle of the road and premium products available at appropriate prices.

You could keep the macro brands in bottles, for those who insist, but there is no quality perception issue, because people are already used to paying more for a bottle of the same beer.

If Oslo are pricing themselves out of the market, that is unfortunate and frankly I think is is poor business sense.

noby

guildofevil wrote: »

Most house beers are still packaged the same way as any other commercial beer, so no saving there.

Most, but not all; but I take your point. Economies of scale comes into the packaging too. It can be a days work cleaning kegs to prepare for a kegging day.

leeroybrown

I think the problem with the inhouse brews at the Olso that the OP mentions is the perception of the price rather than the price itself. Technically speaking in the Irish market €4.95 isn't a bad price for a beer that is supposedly 5.8% ABV. The problem for me is that short of asking the staff there was no way to find it out and a casual visitor to the bar will likely just perceive it as pricey. Perhaps they've deliberately chosen to go for a strong brew due to the economics involved in their brewing process but I still think it doesn't necessarily come across as a good deal to the public.

guildofevil

I have heard that the excise man is a little suspicious of serving tanks, which results in more inspections than if you keg. I can only think of one pub in Ireland, which uses serving tanks: The Franciscan Well. Unless Oslo does.

guildofevil

leeroybrown wrote: »

I think the problem with the inhouse brews at the Olso that the OP mentions is the perception of the price rather than the price itself. Technically speaking in the Irish market €4.95 isn't a bad price for a beer that is supposedly 5.8% ABV. The problem for me is that short of asking the staff there was no way to find it out and a casual visitor to the bar will likely just perceive it as pricey. Perhaps they've deliberately chosen to go for a strong brew due to the economics involved in their brewing process but I still think it doesn't necessarily come across as a good deal to the public.

Well that's a communication issue. I don't know why draught beers don't have to list the ABV but to me that is a vital piece of information.

noby

The Well is the only one I'm aware of too. And yes, the excise man does see it as a potential point of skulduggery, and tend to keep on top of it.

the beer revolu

guildofevil wrote: »

Well that's a communication issue. I don't know why draught beers don't have to list the ABV but to me that is a vital piece of information.

I've always wondered the same thing.

mayordenis

Shanley wrote: »

Should brews that are made in a pub not be cheaper then normal brews? Was in a pub in Galway recently and they were the same price, wasnt too impressed!

Do you think small breweries can avail of extreme mass production to scale costs down?

enda1

Agent Smith wrote: »

I think that they are still Subject to the same Duty and Tax, as say a regular beer. I do see where you coming from. personally i'd Lower tax on any beer brewed in the state.

A bit anti competitive and protectionist, no?

I'm not sure the EU would be too happy about that!