Why doesn't the VFI act as a bulk buyer/distributor for its members?

hatrickpatrick

This just came to me the other night, was having a few pints in Wetherspoons with a few of my mates and we were discussing how they manage to sell for such low prices compared to your average overpriced Irish pub. One of the main factors which came up was the fact that Wetherspoons, as a chain, can place gigantic, central bulk orders and thus get large discounts on those, and then distribute the beer to its members afterwards.

Got me thinking though, why doesn't the VFI do this? If the reason they can't get decent prices from suppliers is because a bunch of small, individual pubs making separate orders can never command any decent bargaining power, would it not make more sense if every VFI member pub worked out what it needed, submitted that to a collection of orders and then the VFI as an entity could place one bulk order for a whole bunch of its member pubs, this commanding the same bulk buying power that JDs has?

Just an idle thought, perhaps there's a good reason they don't do this - as one can imagine, the response around the table on the night was "this is Ireland and that's a sensible idea, hence why it's not happening" :rolleyes:

Victor

Given their membership includes most pubs in the country, there would be abuse of power issues.

Wetherspoons have a cheap beer + food + get them off hte premises trading model. Legacy pubs have different models.

oblivious

Victor wrote: »

Given their membership includes most pubs in the country, there would be abuse of power issues..

Musgrave group to a similar function for centra/supervalue/mace/Daybrake stores both owned and franchised

Victor

oblivious wrote: »

Musgrave group to a similar function for centra/supervalue/mace/Daybrake stores both owned and franchised

VFI members own about 90% of pubs in the country.

Musgrave only controls about 255% of the grocery market.

BeerNut

hatrickpatrick wrote: »

why doesn't the VFI do this?

Because it depends on very few suppliers and can't risk annoying them by playing hardball on price. When a JDW supplier won't sell for the price JDW offers, they simply drop them and pick someone else. Remember when Theakston's bitter was in every Wetherspoon? It looks like at some point around 2005 Greene King made them a better deal and now you get Abbot Ale in every Wetherspoon instead. The second Greene King gets a bit uppity or a better offer arrives from Marston's or Fuller's or Caledonian: bam! they'll switch. For the VFI that's not an option because their entire draught supply effectively depends on just Diageo, Heineken and C&C. So the Irish pubs and the Irish brewers have reached a cosy accord with everyone turning a healthy profit on the same small number of beers. It's not in the VFI's or the brewers' interests to try and disrupt that.

oblivious

Victor wrote: »

VFI members own about 90% of pubs in the country.

Musgrave only controls about 255% of the grocery market.

Well either way the both in a majority

But there are deals to be done if the will is there. Like Blacks, Carlow and 8 degrees have done with Tesco, Dunnes and Witherspoon's Ireland.

L1011

Victor wrote: »

VFI members own about 90% of pubs in the country.

I suspect that figure is wildly off.

Firstly, they don't organise in Dublin - the LVA do.

Secondly, membership is not compulsary nor is there much point for many people.

Thirdly - they only have approx 600 pubs listed as members on their website.

Revenue's current listing has 8 pubs on 6 day licences and 5758 on 7 day plus 473 hotel public (not residents) bars. I've good reason to believe the list is incomplete - or a few pubs I drink in are sheebeens!

Big Nasty

The VFI & LVA have very recently or are in the process of amalgamating.

Frynge

Big Nasty wrote: »

The VFI & LVA have very recently or are in the process of amalgamating.

I've heard this from the head of the VFI. also the reason that there was two seperate entities representing pubs was that historically dublin pubs were unionised.

dr.fuzzenstein

The VFI doesn't have to compete or do deals, not with minimum pricing coming to the rescue, a genius move that for some extraordinary reason only affects alcohol sold in supermarkets. Uncle Leo to the rescue of the many dear and close friends and relatives of our government in the licensed trade.

n97 mini

Frynge wrote: »

I've heard this from the head of the VFI.

The merger has been in the media.

VincePP

dr.fuzzenstein wrote: »

The VFI doesn't have to compete or do deals, not with minimum pricing coming to the rescue, a genius move that for some extraordinary reason only affects alcohol sold in supermarkets. Uncle Leo to the rescue of the many dear and close friends and relatives of our government in the licensed trade.

Minimum pricing won't affect the vast majority of people who drink sensibly and drink quality.

Terrontress

VincePP wrote: »

Minimum pricing won't affect the vast majority of people who drink sensibly and drink quality.

Of course it will.

If the cheapest bottle of wine is pushed up by €2, do you think that the wine which was previously at the new minimum will stay at that price, to compete with lesser wines? Or will it go up to reflect its difference from the cheaper wine? And likewise with the wine which is priced where that one goes up to.

There will be a ripple throughout the price points on all drinks, starting at the bottom and going upwards.

dr.fuzzenstein

VincePP wrote: »

Minimum pricing won't affect the vast majority of people who drink sensibly and drink quality.

I drink sensibly, but it doesn't have to be at a stupidly high price. Sometimes I pick up a sixpack in Lidl and I think that it costs way to much already.
Let's have a look at the price argument, shall we? Sixpack of Perlenbacher and their own brand vodka would cost over €20. In Germany to be had for barely over €10. Do we see hoardes of drunken Germans crawling around on their hands and knees, pissing, puking and fighting? Funny, whenever I make that argument, the counter argument is "but our culture is different here!". So, most expensive alcohol in Europe already and an admission it's culture, not price. Funny how people debunk their own argument but yet plow ahead anyway. That screams vested interest.

machiavellianme

dr.fuzzenstein wrote: »

I drink sensibly, but it doesn't have to be at a stupidly high price. Sometimes I pick up a sixpack in Lidl and I think that it costs way to much already.
Let's have a look at the price argument, shall we? Sixpack of Perlenbacher and their own brand vodka would cost over €20. In Germany to be had for barely over €10. Do we see hoardes of drunken Germans crawling around on their hands and knees, pissing, puking and fighting? Funny, whenever I make that argument, the counter argument is "but our culture is different here!". So, most expensive alcohol in Europe already and an admission it's culture, not price. Funny how people debunk their own argument but yet plow ahead anyway. That screams vested interest.

It's hardly the most expensive alcohol in Europe. Scandinavian countries pay a lot more for theirs.

irish_goat

Thread on minimum pricing is here folks. Try to keep this thread on topic.