Last week was the fortieth birthday of the Campaign for Real Ale (CAMRA). Described by a government minister as the most successful consumer group in Europe, it revolutionised (or perhaps counter-revolutionised) the beer market in the UK. Contrary to popular myth, CAMRA was not founded by four old gits in a pub. It was founded by four relatively young gits, lads in their early twenties, out on a pub crawl in Chester. Fed up with being served pints that were at best bland and at worst puke-inducing, they decided to start a campaign to get proper traditionally brewed beer back into the country’s pubs. What started off as pub-talk evolved, within a few years, into a very effective organisation.
But, according to the classical economic theory that is still fetishised in some parts of the blogosphere, an organisation like CAMRA should be unnecessary. Markets react to supply and demand. If there is enough demand for traditional beer, so the story goes, new firms will enter the market to satisfy that demand. However, when you look at what firms actually do, rather than what the theory says they do, the reality of markets is different. In many sectors, firms adopt industry standards which enable them to promote their collective interests at the expense of customers.
Such standards are not just a feature of oligopolies. Take private gyms for example. Most of them have high joining fees. They would rather collude with each other to lock customers in than compete with each other to win them over. Or consider the UK broadband market. With dozens of suppliers it should be a fine example of perfect competition, yet most providers have abysmal levels of service, eye wateringly frustrating support processes and massively expensive help-lines. Despite the large number of players in the market, it took regulation to get any improvement to the way customers were treated.
And so it was with Britain’s brewing industry in the 1960s. The major breweries developed pasteurised and carbonated keg beers to replace their traditionally brewed products. The reason for this was simple; they were much more profitable. Traditional beer goes off quickly and it takes time to learn how to look after it and serve it properly. Keg beer, by contrast, has a shelf-life of months rather than weeks and it doesn’t require much skill to keep. The only problem with it is the taste – which ranges from insipid to horrible. It is, in short, a hugely inferior product.
But if all the breweries switched over to keg and promoted it with massive marketing campaigns, they could perhaps persuade people to drink it. At the same time, if they withdrew their traditional products and starved them of publicity, they could claim that there was no demand for them and quietly kill them off.
During the sixties and early seventies, things pretty much went to plan for the big brewers. I’m too young to remember the darkest days of the kegocracy but I’m told that it was bad. There were whole areas where it was impossible to get a pint of traditional beer. Sure, if you didn’t like the beer you could walk down the road to another brewer’s pub but it would simply be a different brand of nasty keg beer. The brewers had colluded to kill off real ale in many parts of the country. It was only when those four lads decided they’d had enough that things began to change.
And boy, did they change! By the time I started drinking in the 1980s, the tide was already beginning to turn. CAMRA’s campaigns had raised awareness of real ale; it was a form of counter-propaganda to the brewers’ marketing campaigns. People were banding together around the country and kicking up a fuss. Like salmon returning to once-polluted rivers, traditional beer began to appear again in areas where it had not been seen for years.
In 1979 there were only four pubs left in Britain that brewed their own beer. Now there are hundreds. Sales of real ale are rising and the twentysomethings, once thought to be a lost cause, are discovering the delights of proper beer too.
Would any of this have happened without CAMRA? If consumers had relied on classical market forces they would have ended up drinking crap beer or sitting at home not drinking at all. In the early 1970s, there was no sign of the ‘new entrants to the market’ that are supposed to ride to the consumers’ rescue. If they had turned up at all, they would have been a long time coming. Fortunately, four young men in Chester decided they couldn’t wait for the invisible hand of the market.
Markets are not free. They never have been and they never will be. The powerful will manipulate markets for their own ends. Sometimes, the only way to get what you want is to manipulate them back.
Happy 40th Birthday CAMRA. Let’s raise a glass to the four lads who decided to fight back. The ‘invisible hand of the market’ might deliver the goods eventually but pissed-off and passionate people tend to get things done a lot more quickly.