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Morning Briefing for pub, restaurant and food wervice operators

Fri 27th Apr 2018 - Friday Opinion
Subjects: Talking Italian, how CAMRA is evolving and the dead licensees’ fund 
Authors: Glynn Davis, Tim Page and Paul Chase

Talking Italian by Glynn Davis

What have Prezzo, Zizzi, ASK Italian, Carluccio’s, Strada, Franco Manca and Jamie’s Italian all got in common? It’s not a particularly difficult question. They have all ridden the wave of casual dining and aggressively expanded their footprints to satisfy the UK consumers’ appetite for affordable Italian food.
This growth has been fuelled by the availability of cheap debt, which has been used with great abandon by the private equity firms that own the majority of these businesses. It’s an incredible statistic six of the nine mid-market UK casual dining chains that have more than 100 restaurants serve Italian food, according to Deloitte.
These businesses also have something else in common – they are facing strong headwinds, with the harsh result most of them are now closing outlets or at the very least abandoning their expansion strategies. At a recent count, there are almost 120 of these branded restaurants set to close.
Italian continues to be one of my family’s favourite cuisines. What’s not to like about pasta, pizza and ice cream? Not a lot you would say, but in a crowded market the problem these big-branded Italian restaurant chains are facing is the growing number of people who seem to have become tired of their undifferentiated offers. They have become somewhat blurred.
Part of this has undoubtedly been a result of rising costs that have pushed the large operators into a corner and force them to focus their attention on cost engineering rather than developing innovative and tasty new products.
This is especially dangerous because it comes at a time when diners are increasingly discerning about what they put into their mouths. We are talking about provenance and authenticity again. They seek out more unique products that invariably take them away from the bigger players.
The reality is Italian food is not going out of fashion at all. According to the 2018 Pizza Occasion Consumer Trend Report from Technomic, in the US people are eating pizza more regularly and more options are emerging. Sales among the limited-service pizza industry grew 3.7% in 2017.
It’s just a case of demand moving away from middle-of-the-road anglicised inventions into more authentic localised Italian cuisine. This is especially noticeable in the pizza category where operators are being driven into niches and specialised areas.
We are not talking about square pizzas (Zizzi was recently trumpeting its “innovative” oblong creation) and odd toppings but moving into other more regional pizza types that can be found in specific areas of Italy. I have to admit I had no idea there were so many variations on the pizza theme.
I’ve visited the home of pizza in Naples and sampled that particular thin-crust oily style of pie but I’ve never been into areas of the country that specialise in a whole variety of dough-based offerings.
Taking just the south of the country there are a myriad pizza styles. In Calabria alone can be found the delights of mpigliati con le sarde, cullura, pizza al taglio and a moon-shaped calzone-style pizza called falagone. There is also the very simple affair of pasta da forno that is served for breakfast and consists simply of crushed tomato, salt, oregano and olive oil atop the dough.
Moving on to Puglia and there is a focaccia specific to Altamura – the thick focaccia altamurana has a dough made only with semolina flour and is topped with tomato and green olives. And in Basilicata can be found panzerotto di carne, which are small calzones filled with minced pork and spices that are baked before final seasoning. There is also a fried version – panzerotto fritto. We can add to this strazzata, a fresh crispy summer-style pizza topped with peppers, tomato and extra virgin olive oil.
There seems an almost endless variety of pizza types to be found in Italy – some I predict will likely find their way into the UK restaurant industry in some form or other because of the combination of our insatiable appetite for Italian food (pizza particularly) and the increasing demand for unique differentiated foods that right now are not being delivered by the hundreds of branded Italian casual dining chains.
Glynn Davis is a leading commentator on retail trends 

How CAMRA is evolving by Tim Page

While some may interpret the decisions taken at the Campaign for Real Ale’s (CAMRA) annual general meeting and conference held in Coventry last weekend as the end of the Revitalisation Project (CAMRA’s strategic review), it’s actually just the beginning of change for the organisation.
Quite rightly, people in the sector are now asking what the changes approved by our members mean. The events last weekend were the latest step in a two-year process that has seen consultation with tens of thousands of CAMRA members, as well as feedback from those in the pub and brewery industries.
Their opinions were distilled down into changes to the organisation’s Articles of Association – the constitutional document that defines CAMRA’s purpose in broad objectives or “objects”. Our volunteer leadership was courageous in recommending changes. It knew its proposals could cause division and lead to us losing some members, whatever the final decision. It followed a democratic process by ensuring all members were given the opportunity to vote on the proposals. That meant submitting special resolutions to CAMRA’s annual general meeting, requiring a 75% approval rate under Company Law.
While this made approval more difficult to obtain, it meant the changes would be embodied into CAMRA’s constitutional document – and therefore be enduring – irrespective of the opinions of those elected to lead the campaign. And CAMRA members indicated their desire for change by supporting all but one of the ten special resolutions put to them. The one not passed failed by fewer than 3% to obtain the requisite 75%.
CAMRA’s national executive, given the go-ahead for almost all of its proposed changes, will now start building on the new objectives and devise strategies and plans, and to enable the campaign to pursue its new purpose. This will take time. CAMRA has more than 200 branches and many thousands of active members across the country. The volunteer leadership needs to mobilise, inform and motivate them. Most importantly it will take time to bring people together, many of whom may have disagreed with the recommendations, and encourage them to work together in a new direction.
It’s too early to give exact detail on how the changes will be reflected in CAMRA’s activities. Real ale, cider and perry remain core to our campaigning and we will continue to encourage, support and promote breweries that produce it and pubs that stock it. However CAMRA will build on its existing recognition and acknowledgement of the range of quality beers, which may not be real ale, which are now available to drinkers.
CAMRA beer festival organisers now have the flexibility to offer other beers alongside real ale to help develop understanding about the differences between them, and to enable CAMRA to highlight what is particularly unique about cask-conditioned beer. The organisation has long campaigned to protect pubs, but for the first time this is explicitly stated in our Articles of Association. We will continue to build on our pub campaigning, ensuring the Pubs Code is properly enforced and holding large pub-owning companies to account.
Members took advantage of CAMRA’s conference, a separate policy-setting meeting to CAMRA’s annual general meeting, to build on the positive Special Resolution results. It was agreed the minority of CAMRA members who believe they are entitled to demand discounts from pubs and breweries are wrong to do so.
Members also supported policy to ensure CAMRA continues to work with the industry in ensuring equality and diversity – by showing leadership in the way we organise and act within CAMRA, but also expecting others in the industry to demonstrate similar values.
The conference also reinforced our belief there should be a unified view among brewers about Small Brewers Relief – rejecting calls to campaign for increasing tax on smaller breweries. We will continue to play a part in conversations between all parties, in order that any calls for reform are in the interest of all in the industry, as well as consumers.
Finally, the conference agreed a motion that expressed CAMRA’s disapproval of property-owning companies maintaining ties requiring their tenants to purchase all of their supplies from their landlord. These are just some of the changes you will see from CAMRA. Further changes may take weeks, months or even years to be developed fully.
You can be confident CAMRA’s leadership has listened to the views our members have expressed – that CAMRA should continue to evolve to reflect the changing needs and behaviour of the consumers we represent, as well as support and encourage the industry that serves them.
Tim Page is chief executive of the Campaign for Real Ale

The dead licensees’ fund by Paul Chase

I support the recent call from Tim Page, chief executive of the Campaign for Real Ale, for industry trade bodies to do more to combat the tide of anti-alcohol propaganda from so-called “public health”. This often takes the form of research undertaken or funded by anti-alcohol charities, but how are these charities themselves funded?
In England the two main neo-prohibitionist charities are Alcohol Research UK (ARUK) and Alcohol Concern (AC). These two announced a merger in December 2016, and the shiny, new organisation that will combine supposedly objective alcohol research from ARUK with the anti-alcohol campaigning of AC will launch later this year. So, why is this merger happening?
AC lost funding from the UK government after it withdrew from the government’s voluntary alcohol responsibility deal in 2012. Since then it has survived on handouts from the Welsh Assembly government and the National Lottery fund, plus some money from big pharmaceutical companies that produce “treatments” for alcoholism, such as Selincro. This wasn’t enough to sustain it, so a merger with ARUK, which has very similar charitable aims, provided a solution.
So, how is ARUK funded? ARUK’s research is paid for by the money earned from an investment fund that is managed for it by an asset management company called Investec. The investment fund was established in 1981 through the Licensing (Alcohol Education and Research) Act, following the winding up of the “Licensing Compensation Scheme”. This scheme was effectively a tax levied on licensed premises that was established under the 1904 Licensing Act to provide compensation for the owners of licensed premises that were closed through no fault of their own, but where it was deemed the density of licensed premises in an area was too high.
The scheme was not popular. Temperance campaigners at the time called it “the Licensees’ Benevolent Fund” but the trade dubbed it “the Licensees’ Burial Fund”. It didn’t take long for the scheme to fall into abeyance, but it was not until the 1981 act that half of the residual funds were transferred to establish the Alcohol Education and Research Council (AERC). In 2011, the AERC was wound up and the investment fund was transferred to a new charity, ARUK.
On its website ARUK says it “will not accept funds, in cash or in kind, from the alcohol industry”. But it adds: “Alcohol Research UK may accept donations from people who were formerly but are no longer employed in the industry and do not have a significant residual financial stake in it (such as through shareholdings).”
In practice this means ARUK won’t accept money from companies or people involved in the alcohol industry unless they’re dead! Living off a “Dead Licensees’ Fund” is leaching of the first order. Now it’s joining forces with the preachers of AC. This union of Leachy and Preachy is a marriage of financial convenience between the closet prohibitionists of ARUK and Poundland prohibitionists of AC and it may yet turn out to be an uneasy alliance. I think government should act to take back ARUK’s funding from the compensation scheme and give it to the Licensed Trade Charity, which helps people who have retired from the licensed trade and have personal or family problems.
And talking of preachiness provides an ideal segway to Alcohol Focus Scotland (AFS), Scotland’s alcohol charity. This organisation exemplifies the kind of mental extreme anti-alcohol zealotry that arises when campaigning and research are glued together by the swivel-eyed moral certainty of true believers.
Having championed minimum unit pricing in Scotland on the basis it will be “good for pubs”, it is now calling for pubs to be closed, or not opened in the first place. AFS funded research, published this week, made fatuous correlations between the density of licensed premises and crime rates. It found in areas with the most pubs, clubs and off-licences, crime rates were four times higher and alcohol hospitalisation rates and deaths twice as high as in areas with a low density of premises. It would probably turn out there was a similar correlation between high crime rates and the density of street lighting, since the high density of anything except sheep is more likely in urban areas, but don’t let that stand in the way of a good headline! “Alcohol availability boosts crime rate”, said the BBC news website.
Pause, sigh, breathe – we’ve been here before – this is a variant on the “availability drives consumption” argument that is constantly pushed by AFS, AC and ARUK. As the Institute of Economic Affairs director of lifestyle economics Chris Snowdon put it: “Suppliers respond to demand. If the ‘public health’ lobby could get this simple fact into their skulls it would be halfway towards understanding how the world works, and three-quarters of the way towards understanding commercial activity is not a conspiracy against the public.” 
And who funds AFS? You guessed it, the SNP government – to the tune of £500,000 a year of Scottish taxpayers’ money.
Paul Chase is a director of CPL Training and a leading commentator on alcohol and health policy

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