Is it morally wrong to drink an 89p bottle of good beer?

Bank's Amber bitterMy local little Tesco supermarket – and probably your local Tesco as well – is currently selling for 89p a 50cl bottle of 3.8 per cent abv amber ale made with Fuggles and Goldings hops at a 140-year-old Midlands brewery. What is worse, or better, depending on which direction you wish to drive in from, is that it’s an excellent beer, a very fine example of a classic English session bitter, only lightly carbonated, balancing with calm skill on the  knife’s edge between mouth-filling bitter and delicate sunny malt sweetness, a long afternote bringing a reminder of oranges and a touch of currant cake, as moreish as any brewer could wish. If every bottled beer were as good, Britain’s drift towards much more drinking at home would become a stampede. But the price! Beer hasn’t been that cheap in a pub for nearly 30 years. It’s a crime against economics, and a threat to every other brewer, great and small, trying to scrabble a living selling good beer on thin margins. How and where is anyone making a profit? The duty alone has to be 35p a bottle, and the VAT 18p. I cannot believe the manufacturing and distribution are less than 20p a pop, leaving 16p for the retailer: a GP of 18%. A normal business would go bust pretty swiftly on that kind of mark-up. Dear reader, how do I match the exceeding, and exceedingly cheap, pleasure I get from this beer with the guilt I wrestle to suppress, fearing that every bottle I buy pushes a Heriot-Watt graduate working for a small brewer utterly unable to compete on price with an 89p cracker closer to redundancy?

The beer, as you could guess anyway if there wasn’t a big picture of it right there, is brewed at Banks’s Park brewery in Wolverhampton, part of the Marston’s empire. Earlier this year Tesco was selling a beer properly labelled as Banks’s bitter for about £1.10 a bottle, and I would not be astonished to hear that “Amber bitter” is a bottled version of Banks’s bitter too: certainly the abv matches, and it gives off the glow of a beer that head brewer upon head brewer has spent decades burnishing until perfect. Marston’s does not get enough credit for making good beer. It’s a too little-known fact that two or three years ago the brewing side at the company finally vanquished the marketeers, and it is now about the only big British brewer (that is, ignoring the internationals) totally refusing to put any of its beer in clear glass bottles. But how it makes the economics work selling bottled ale for a quarter of the pub price, and half the supermarket price of other ales, is something other brewers would love to learn, I’m sure. This is nudging “24 cans of Foster’s for £20” territory, and it’s a beer vastly, vastly superior to canned Foster’s. (Incidentally, that Foster’s will be costing the retailer about 55p a can, wholesale, so he is still getting 50 per cent or so GP on it. And no, I don’t know how a brewer can supply lager for 55p a can, either.)

So should I feel guilty about succumbing to Tesco’s massive discounting when perhaps worthier brewers and retailers are struggling? I don’t think so: there are not normally more than a few bottles left on the shelf when I call in, meaning super-cheapo Bank’s is replacing very little of the pricier beer I normally buy. And ultimately, morally, I suggest my duty as a family man is to maximise my pleasures as cheaply as possible, to leave more of my income to keep my wife and daughter in Pinot Grigio and “dark fruits”-flavoured cider respectively (yes, I know, but she’s a teenager: it’s what they all drink.) Pound for pint, this is one of the maximumest beery pleasures I’ve carried home for a very long moon. Thank you, Marston’s and Tesco, for taking me back to 1987. And no, I don’t believe good people are going out of business because I’m buying 89p beer: I think smart good people are finding themselves niches 89p beer doesn’t threaten.

(A search round the net suggests Aldi is selling the same beer for the same price as Tesco, while in Asda it’s 90p a bottle and in Morrisons 91p, so this is not just Tesco squeezing Marston’s nuts. And before anybody comments, this is not ageing stock: the BBE date is 31 October 2017.)

19 thoughts on “Is it morally wrong to drink an 89p bottle of good beer?”

    1. So does Newkie Brown, of course, so if you’re going to make a clone you’d have to copy that aspect too: and as very few people know that beer’s from Marston’s I suspect the brewers don’t care too much if you discover it’s light-struck, something anyone drinking a Newkie Brown clone is extremely unlikely to do.

  1. There’s only so much shelf space the supermarkets can devote to beer – by capturing facings like this, some producers can deny others the chance to bring their beer to this market at all. Obviously, we don’t do anything “wrong” when we buy it, but a more interesting question might be whether these producers and retailers are doing something “wrong” (i.e. anti-competitive) when they combine to sell it.

  2. Unfortunately Martyn, the vast majority of beer drinkers do not share your views as to the quality of Marston’s output, hence the reason they have to flog it off dirt-cheap – its the only way they can get rid of it. You might consider £1.10 to be a bargain already, others clearly didn’t, hence the need for further reduction..

    Just think yourself lucky that your tastes are so different from mainstream tastes and the significant boost to your personal consumer surplus that this affords you.

  3. Just thought I’d chip in some other bargains at the moment:

    guinness foreign extra stout (7.5% 33cl), rye pale ale (5% 50cl) £1.25
    mcewan champion (7.3% 500ml) ~£1.25

  4. Whatever your opinion of the beer, and the values and vicissitudes of buying cheap verses suppressing well brewed product… supermarket chains respond to computer driven algorithms (I was tempted to mistype AlGorerhythms). So if a product isn’t moving, it gets discounted.

    I benefitted from this two years ago when a ‘franchise’ quick-stop type place was selling US sized 22oz bottles from a brewery for $1.88, even though new beer was being stocked by same brewery – a premium ale at $5.99… I cleaned out 12 shops and had beer for months.

    The brewer’s in question lost no money – the idiots running the corporation of franchises lost money.

  5. I got a couple of bottles of this with my Tesco order last night and concur with Martyn that it is a decent drink. That isn’t a safe assumption with the cheap end of the market (Lidl had Shepherd Neame Ace Ale at a similar price recently; let’s just say I’m glad I didn’t stock up.

    The supermarket is probably looking at it as a loss leader. Buy a few from the bargain end and you don’t mind getting something more expensive too. They don’t have enough stock of the cheap stuff for it to dent their overall profits and they have plenty of higher profit items available to tempt you. My experience of Tesco is that they normally have one or two at the lowest price, a handful more a bit higher and then a wide swathe covered by their 4 for £6 offer. I don’t imagine they – or the brewers – are losing out.

    1. I would very much doubt that this is being used as a loss leader. In fact, if you look round the supermarket shelves there are plenty of other non-enthusiast beers being sold at similar price points. The margins may not be great, but it’s still profitable business.

  6. The duty plus VAT on duty come to 41.9p, so there’s still plenty of headroom for both producer and retailer to make a profit on it.

      1. That would be true if the shop received a delivery only containing Banks Amber. That probably only makes up a small proportion of the delivery to any one store and so you need to consider the aggregate profit or loss for the whole shipment – which we can’t do without more data. The same is true at the brewery – they couldn’t survive on just that one beer at that price but they balance the costs across their range.

  7. Or why not try to avoid purchasing beer from big supermarket chains? They are are notorious for screwing their suppliers down on wholesale prices and for their authoritarian payment terms!

    Buy directly from breweries when possible. The rest of the time, buy from decent independent beer shops, if you have one nearby. It will cost you more – but surely that’s because the breweries are getting a better deal.

  8. As always, in Ireland it’s a bit more expensive. The Aldi Marstons bottles are retailing for €1.79. The Newkie Brown clone and the amber ale are utterly delicious and I thought they were a bargain until I read this post.

  9. Bass has been £1 a bottle in Asda for, what, three years? The pick of several others around that price point.

    Nice idea Lord Crumb except … I don’t have much money. I want to buy individual bottles, not cases. I don’t have a bad independent beer shop near me, never mind a good one. When I am in such a shop elsewhere and they are charging 50% more for a beer than I could pay elsewhere, my thoughts turn more to the possibility that they are perhaps ripping people off rather than that supermarkets are screwing the breweries.

    1. Well said, Sir! We’re not all made of money, nor do we have independent bottle shops on our doorstep.

      And my local Tesco sells 4x500ml packs of cans of Bombardier, Bass and McEwans Export for £4, which all must have a similar margin.

      It’s not loss-leading, it’s not predatory pricing, it’s just the normal economics of the industry.

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