Ale fail for free market….

This post is an opportunity to bring to your attention the other side of my life.

Besides being a transparency extremist and tax-reform nerd, I have a private passion. I love going out dancing.  I don’t do ballroom, Morris or Salsa: no, I go out to gigs and clubs and shake my booty with da yoots; and in the summer, we do festivals. What used to be called “Pop Festivals”.  We – the boss and I – try to do two a year, which is about as much as our bodies can stand. We have our favourites – WOMAD, the world music festival has great music, impeccable toilets and bar service beyond reproach, but is so full of boomers (like us) and their teen spawn that it risks drowning in its own worthiness. The Secret Garden Party is on over  the same weekend, and is a much more hedonistic party experience, with lots of good music as well. But ten thousand twenty-somethings on ketamine…..

Anyway, yesterday evening we got back from The Big Chill in Herefordshire, and I don’t think we’ll be going again. The setting was lovely, the music great and the weather perfect, but I couldn’t get a proper pint all weekend. Seriously, there was not a drop of ale to be had in the whole festival – or if there was, it was so well hidden we didn’t find it. There were lots of big bars, and they offered a choice of: Gaymers’ Original Cider, Gaymers Pear Cider (whatever the fuck “pear cider” is), Carlsberg or Tuborg.  They didn’t even sell Tetley (part of the same stable as Carlsberg and Tuborg), but since it tastes even worse than those it wouldn’t have made any difference to my weekend. It certainly isn’t what I’d call a decent English Ale.  Herefordshire’s hop country; there’s even an oast house in the grounds. So why no ale? Because an exclusive deal had been done to create a local monopoly.

Right, what follows is conjecture. I have no evidence for this, and will correct it if I’m wrong.

Festivals like the Big Chill cost loads to put on. Basically the organisers create a small city for a weekend in the countryside; and pay big-name musical acts lots of money to come and attract the punters whose ticket purchases help defray the costs. As well as ticket sales, the organisers get some extra money by letting space to catering outlets, who make money feeding and watering the festivalgoers. Obviously, this being England,  booze is going to be a big seller and a bar should be a really profitable festival outlet.  It’s in the Big Chill’s interest to get the best deal possible for the right to run the bars, and the best deal for them is an exclusive one covering all the bars on the site.  If I ran the outside catering division of a multinational like C&C Brands/ Matthew Clark/Gaymers, I’d do my best to sign up an exclusive.  Competition drags down profits. Someone selling a rival product for £3 a pint would ruin my business based on the £3.80 pint; I’d have to cut prices, corners, etc. So I’d offer the Big Chill one price for the right to run some of the bars, and another much higher one for the right to run them all.  On the face of it, it’s a no-brainer for the Big Chill, and it looks as though Gaymers, or one of its associates, did the deal.

This, however, has some bad effects. Firstly, it reduces consumer choice. This weekend, it removed my choice of a pint of cool English ale. Secondly, it creates a barrier to entry. Only the biggest operations can afford to take on the exclusive bar contract for a festival like the Big Chill. And for the Big Chill organisers , it means that one, otherwise-satisfied punter, will not be going back next year.

But it’s the free market at work. Not within the festival grounds, where the market for alcoholic refreshment was anything but free, but in the deals being done for concessions. It’s the free market working to eliminate competition.

There are other complications. The site wardens were being very officious to anyone taking any drink into the site. The restriction was imposed by the event licensing authorities, but was another prop to Gaymer’s monopoly. Nice one, chaps. “Er, guys, you can’t bring that slab of Fosters in. Don’t blame us, blame the council”. And, “The council have insisted on a ban on drinks being brought in, so everyone who wants a drink will have to go to one of your bars. Obviously that makes the concession worth a bit more, don’t you think?”.

The irony is that Gaymers didn’t actually have a cider exclusive. They  made a lot of fuss about being “The Official Cider of the Big Chill Festival” – but, as I discovered only too late on the last day – it wasn’t the only cider available there. The Somerset Cider Company was selling some lovely cider from a bus hidden in the back. Delicious it was too, but it was ale I really wanted.

The Proof is In the Pies

The food stalls weren’t let on a single concession. There were three different ventures selling pies. One of them, Battersea Pies, sold pies that were much nicer than either Square Pies or Pure Pies. So we went back there. I’ll look out for them in future. In fact, mmm – I could eat one right now.

Womad The Worthy

At Womad, they’d done another monopolistic exclusive, but mercifully, it wasn’t with Gaymers. They’d chosen a Bath microbrewery, Bath Ales, to run the bars and served bloody lovely beer and cider by gravity from the firkin. And squirty gassy lager if you wanted it.  Even so, I’d have liked some choice. Bath Ales from one bar, another microbrewery supplying another. Just because the monopoly sells good shit, doesn’t make it right – although it makes it a lot less bad than a monopoly selling shit shit.

It’ll be worse at the Olympics

In two years’ time, we shall see this nonsense repeated on a grand scale. The Olympic Games are an event of much greater magnitude and costs than the Big Chill festival, and they have already done several exclusive deals – specifically with Coca Cola. You won’t be allowed to take Pepsi, or Pepsi merchandise, into the Olympic arenas. If you want a soft drink at the Olympics, it will have to be one of Coca-Cola’s portfolio,  or nothing.  But that’s not a failure of the free market, it’s a collaboration of monopolists.

Red Ken was Right

Back in the early 1980s, the GLC as it then was was run by Tories. It used to put on the occasional outside event in London, and it let out the catering concession for these events as a single concession. There would be lots of identical, hygienic-looking caravans selling an identical range of over-priced bland pappy sandwiches. Every caravan at the gig sold the same shit at the same price.  Then that socialist firebrand Red Ken took over the GLC and put on lots more outside events.  But instead of a single catering concession, Red Ken’s GLC let out multiple catering stalls and turned a blind eye to the letter of the food hygiene regulations. Although most of them sold curry goat, each was selling a slightly different  version, some competing on price, others on quality. The choice of food went up and the price went down: it was such a delicious irony seeing the merits of free competion (and deregulation) being so clearly demonstrated by the man we were supposed to believe was its nemesis.

Moral of the Story

The  free market depends on competition, and this is a good thing. But competition drives down profits, so the free market tries to eliminate competition. This is a bad thing.


2 comments so far

  1. matt on

    Festivals are fairly unique in their business model in that they work for a whole year and nearly all the spend and revenue comes in one weekend, therefore sponsorship is essential for paying those upfront deposits, etc.

    The bars are the biggest volume and value concessions on site, so the organisers are keen to retain some control (and therefore profit)

    First they will put the day to day management of the bars out to tender to a number of agency bar management companies.

    Secondly they will then invite drinks companies to tender for the exclusive pouring rights for each drinks category, spirits, wine, lager, cider, cigarettes (possibly their last promotional outlet now!) etc. This will usually involve an upfront fee and bar support and then offset against product price.

    As a bar they are only open for 3 days, so to restrict the choice prevents all sorts of stock holding issues on returnable stock eg a keg with just 3 pints drawn off costs £70-80 but will be worthless post the event. If you have one keg like this it is not really a problem, but 5 or 6…

    Many of the larger or newer brands will use the event as a loss making sampling/brand experience session so are happy to pay over the odds for the rights. In addition due to the volumes sold, only some brands and companies have the required scale and resource to supply an event.

    To be honest it is no different to what happens in supermarkets with upfront listing fees.

    The bigger worry is that almost all festivals with a 30,000+ capacity are now controlled by one company. Notable exceptions are Creamfields and Bestival. This music industry monopoly has come about without anybody really noticing and is significant as it is only at the higher capacity that the economies of scale really kick in.

    • ejoftheweb on

      Thanks for that interesting perspective, which adds more detail to how it works.

      Doesn’t alter the fact that we spent the first evening traipsing the site in search of a decent pint and the rest of the festival dreaming of one: a separate “real ale” concession wouldn’t have hurt anyone, and pleased plenty.

      I agree with you about Festival Republic, btw: these little monopolies are just as damaging as big ones. But 30,000 is at the very top end of what I consider to be a good festival.

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