Beer, breweries and the way forward

Jonathan Neame is the Chief Executive of Shepherd Neame, the oldest brewery in the UK. Below is an abridged version of a speech he gave about the future of the brewing industry.

Today we operate in an industry that is firmly under the spotlight of media, politicians and the general public. It is not just about beer that questions are being asked but also about the way we produce, promote, market and retail all alcohol. And the debate is broader than this as we also review what we eat and what our children eat. The focus on "binge drinking" obesity, school dinners, work-life balance and so on is part of a broader agenda across Europe to review how we should all lead a healthy lifestyle in the 21st century.

Food and alcohol producers need to engage positively in this debate. It goes on in the living rooms of our consumers as well as in the debating chambers of politicians. And we need to ask ourselves a number of key questions:

Is our manufacturing process sustainable?

I can only speak for brewing but our industry - and our company - can justifiably boast to be one of the greenest.

• More than 90% of all raw material by product is recycled and goes back into the food chain

• The industry uses predominantly local materials in the form of English malting barley and English hops thereby reducing food miles and benefitting the local agricultural community

• The majority of beer is supplied in returnable containers (kegs)

• We have reduced our water consumption from 9 pints of water : 1 pint of beer produced to 5:1 in recent years.

• And much, much more ...!

We have strong environmental credentials, but we can do yet more. The industry has made great strides in recent years but can do more. Similarly we have met Government targets for energy efficiency and with time and technology will do more to reduce CO2 emissions.

Are we good Corporate Citizens?

The British Pub must to some extent be regarded as the font of corporate social responsibility. Although in part of the media today it is pilloried unfairly for being the home of binge drinking, no-one should forget that the vast majority of pubs never encounter alcohol related problems. Furthermore let us not forget the excellent work that the average pub does for the local community: the average pub will raise around £3,000 per annum for local charitable and good causes, as well as playing host or sponsor to a wide variety of sporting and social pursuits and other pastimes.

My own company is a small player but we contribute £400K per annum to local sports clubs' sponsorships, around £100,000 to other community activities and have in the last ten years raised £680,000 for the local hospice movement and £150,000 for ex-servicemen's charities connected with our Spitfire Premium Ale.

Is our product good for you?

In moderation, yes. As with all alcohol, regular moderate consumption of beer has positive benefits to health, happiness and wellbeing, as well as playing a very important role as a "social lubricant".

Wine has in recent years gained the high ground over beer and spirits as having "additional health benefits" but this is not entirely true.

• All alcohol in moderation is high in antioxidants and helps reduce the risk of heart disease.

• Beer - or rather silicon from the husk of the grain extracted in the mashing process - is particularly good for bone strength and could play an important part in reducing the risk of osteoporosis in women.

• Beer is very high in Vitamin B9 (folate). One pint delivers as much as 100 glasses of wine.

• Hops too are high in antioxidants and very high in phyto-oestrogens. Hops have cancer retardant properties and are increasingly being used by pharmaceutical companies for more general application There is research currently being conducted to determine whether these benefits pass to humans through beer.

• And there are many other health benefits that arise from moderate beer consumption.

Inconsistency and Obvious Dangers

But there are obvious dangers too of consumption in excess. For example, there is a high degree of ignorance and inconsistency about units of alcohol. Different countries measure units in a different way and there are many significant variances in the recommended units of consumption from one country to the next: "A glass of wine" in the UK ten years ago probably meant 125ml of light German wine of 9-10% alcohol, ie. c.1 unit. "A glass of wine" now is more likely to be 250ml. of Australian Red at 14% alcohol, ie. c.3.5 units. This lack of education combined with changes in lifestyle and an almost unchallenged belief that wine is good for you is dangerous.

• Ignorance and inconsistency is compounded by widely different national approaches to alcohol units and responsible drinking.

• Did you know that one unit of alcohol is 8g of alcohol in the UK but 20g in Austria?

• Did you know that the recommended level of moderate drinking for a male in Australia is 280g per week, in Denmark 252g, in Ireland 210g and in the UK 168g?

• Did you know there is no recommended minimum drinking age in Portugal and in Spain it is 16?

• The UK has a more restrictive policy on alcohol already than many other Member States and yet has a perception of itself that it has the greatest problem with alcohol. In fact it is only 9th on the world league table of per capita alcohol consumption and all eight countries above it are European, with Luxembourg leading the way.

Notwithstanding that, alcohol consumption is growing in the UK but the fastest driver of that growth is wine. Since 1990 consumption of wine per capita has increased by 77%, cider by 63%, spirits by 9% whilst beer has decreased by 17%. Spirits consumption has grown ever since the Chancellor embarked on a tax strategy of "equivalence" to "protect" whisky producers in Scotland . Cider has benefitted from the advantageous tax regime to "protect apple growers". The reality of both of these strategies is to benefit the vodka products or the whisky producers and cidermakers who use imported juice.

Meanwhile beer has been in long term consumption decline since 1979. And it is most certainly not beer that is fuelling "Binge Britain " but other alcohol; yet the current tax regime still targets beer as the culprit.

Beer certainly has an image problem in the UK which fuels these misconceptions. In Germany it is more revered and classified as "liquid bread" not alcohol. And in the UK, if we were to adopt the Government's traffic system for food labelling, beer would achieve three green lights.

Beer in moderation is good for you: we have just forgotten why!

Is our product retailed responsibly ?

There is no doubt that there is and has been bad practice in our industry: irresponsible marketing and promotion. But that is changing. The new licensing regime, for all its bureaucratic flaws, is delivering benefits.

This regime is not about "24 hour drinking" as the press suggest but about the transfer of control of alcohol back to the communities they serve. It forces licensees and pub owners to engage positively with local authorities, police and neighbours to demonstrate that the pub is being operated in a responsible manner. Not only is that engagement welcome and constructive, but also alcohol related crime has fallen by more than 10% nationally since it came into force in November. Let us celebrate that fact!

What is more the regime has been a huge wake up call for the pub industry that is now showing how responsible it is and aims to be: New codes of practice on alcohol promotions; a powerful lobby to ban smoking in all outlets, with no exceptions, going far further even than the Government, on the grounds of public health; a very positive response to the Challenge 21 initiative. My brewery now engages with young people locally to advise on responsible drinking and the dangers of excess.

The pub industry has come a long way in a short time and is not going back. Similar questions have yet to be asked, though, of the supermarkets who continue to promote alcohol at prices less than mineral water and fruit juice: is this sensible?

Alcohol Strategy

In the current debate about future alcohol strategy there will be views expressed on all sides. Extreme views on the anti-alcohol side will argue for higher taxes, raising the drinking age, banning alcohol sponsorship and advertising and so on.

Whilst much of this may work in theory it does not work in practice.

• Higher taxes will pass into the on trade but not into the off trade. The price gap thereby increases and so increases the buying power of supermarkets and leads to more not less price led promotions, thereby accelerating unregulated consumption in the home.

• Raising the drinking age will not restrict access of alcohol to young people.

• Banning alcohol sponsorship will remove the huge financial support that companies such as my own put into grass root sport. What will fill the gap? What purpose will be served?

• In short, implementing such measures is more likely to impact the on trade and benefit and off trade. The on trade through the Licensing Act is the home of regulated drinking, whilst the off trade has no control over the point of place or amount of consumption.

Summary

The beer and pubs industry in the UK is unrecognisable from a decade ago. We manufacture and retail a good product in a sustainable and responsible way. Any bad practice will not be tolerated. On the whole, we are pointing in the right direction and have much that we want to achieve.

Society is finding a new balance for a 21st century lifestyle and is reviewing how and what it eats and drinks. Alcohol has an important part to play and we should all resist attempts to demonise it.

Richard with Jonathan Neame and Liberal Democrat MEP Sharon Bowles

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