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Britain’s brewers and pubs tap customer loyalty to aid survival

imageStock Markets2 hours ago (May 06, 2020 03:20AM ET)

(C) Reuters. Spread of the coronavirus disease (COVID-19) in Baldock

By Natalie Thomas

LONDON (Reuters) – Britain’s brewers and pubs were hoping this summer would be a repeat of 2018, when crowds drawn by the combination of sunshine and soccer resulted in the biggest increase in year-on-year beer sales for 45 years.

That hope evaporated in March when the government advised people to avoid pubs, then demanded they closed and then imposed a countrywide lockdown, all in the space of a week, as it fought to stop the spread of the novel coronavirus.

Sim Cotton, who co-founded The London Beer Factory six years ago, was left with beer in his tanks that he is now selling in cans – Lifesavers, a 4% gluten-free lager, and National Heroes, a 4.2% American Pale Ale – with the proceeds going to two local hospitals in south London that are treating COVID-19 patients.

“The uptake’s been amazing,” he said. “We’ve had a lot of support from our regular customers and also people caring about the NHS and wanting to show their support.”

The company sells some of its range of IPAs, sour beers and stouts to Tesco (OTC:TSCDY), Britain’s biggest supermarket, and it recently started selling online.

The web store, which it hadn’t previously promoted, had seen transactions rise from three or four a day to as high as 123 after the pubs closed, Cotton said. But that will never replace sales to pubs and bars.

“Drinking beer is part of socializing and you’re never going to be able to replace socializing with your friends in pubs or restaurants,” he said. “The likes of House Party or Zoom definitely don’t come close.”

The Society of Independent Brewers said last month many breweries were facing closure as beer sales had fallen 82%.

Mark Allan, landlord of the Black Prince in Kennington, south London, is offering takeout food and drink to maintain some revenue and keep a connection with loyal customers.

“The response has been amazing,” he said. “I think everyone appreciates that we’re here.”

Allan has been at the pub for 10 years, and signed a new 15-year lease on the afternoon before pubs were ordered to close.

He has accessed a government loan, furloughed staff and received a rent break from his brewery to stop the pub going under. “There’s no playbook for COVID-19,” he said.

The British Beer and Pub Association said the coronavirus had had a big impact. “Overnight, pubs had to close and breweries lost their primary access to market,” Chief Executive Emma McClarkin said.

She said grants and the job retention scheme had helped, but more needed to be done, especially if pubs were closed for a prolonged period and had to adapt to social distancing when they re-opened.

“Any substantial reductions in usable space or increased costs will inevitably result in a need for further government support if the Great British pub is to survive,” she said.

Customer Rachel Low said she was supporting the Black Prince by buying food and drink until it starts serving pints again.

“It’s about the beer, it’s about the company and it’s about the food,” she said. “You don’t get it in a home, you don’t get it in a bar, you don’t get it on a football field or anything like that, you get it in a pub.

“And the absence of it, I think, will be felt by lots of people.”

Britain’s brewers and pubs tap customer loyalty to aid survival

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