Business Advice Legal, brand & marketing and consumer insight

One of the trickiest questions for any business occupier is: “Who is responsible for repairing what parts of the property?” There are three main stages where this question crops up. Firstly, and perhaps most importantly, before the lease is entered into. Secondly, during the term of the lease. Finally, at the end of the lease - both when the tenant is vacating and if they are taking a renewal lease.

The best way out of a bad situation is to avoid it in the first place!

Avoid any kind of occupation unless proper written terms are in place - either as a lease or a licence (although from an occupier’s point of view a licence should usually be avoided as it can often be easily terminated by the property owner). No matter what the proposed terms of the lease, it is almost always a good idea to instruct a Chartered Building Surveyor to inspect the property and point out any problem areas. The emphasis here is on Building Surveyor - there are many types of surveyors out there but only these are properly qualified to assess the condition of buildings. If there are repair issues, try to agree who resolves them as part of the new lease deal, ideally before the lease is entered into. Also, consider agreeing a term whereby the tenant isn’t obliged to put the property into any better condition than is evidenced by a “Schedule of Condition”. This should be prepared by the Chartered Building Surveyor and contain a detailed spreadsheet describing all items coupled with lots of good colour photographs. Attach the Schedule to the lease. Perhaps the most important clause to check is how the “Premises/Property” is defined because that is what the occupier must look after. Does it for example include structural and external or just internal parts? If the occupier is not to be responsible for the repair of the structure, check there is a corresponding positive obligation on the landlord to do so. Also look out for the ability of the landlord to recover the cost of repairs from the tenant e.g. of common parts on a multi-let estate though a Service Charge. Some landlords can abuse this type of clause.

Lease disrepair - who is responsible?

In this article, Napthens partner and head of commercial property disputes, David Bailey, shares his thoughts on the best approach for business tenants to take regarding property repairs.

During the lease - don’t let problems fester

Whoever has responsibility to repair should review the position regularly and not shore up problems for later. We recently had a case where a landlord failed to repair a large iron fire escape over a 20 year period, arguing the tenant should pay for the cost of replacement (over £70,000) and that this saved the tenant paying for maintenance over that period! Regular maintenance is key, particularly for items like roofs and plant and machinery e.g. heating systems, lifts. Beware lease terms allowing a landlord to serve “Interim Schedules of Dilapidations” whereby the tenant can be made to carry out repairs within say 2 months of a written notice being served by the landlord - failing which the landlord can enter, carry out works and recover costs from the tenant!

At the end of the lease - take expert advice early

If the above steps are followed then an occupier should avoid a nasty surprise at the end of the lease - the dreaded “Terminal Dilapidations” claim. Especially if the occupier doesn’t intend to renew, as the end of the lease approaches (suggest no less than 6 months before), they should seek advice from a Building Surveyor and a solicitor who specialises in commercial lease “dilapidations”. Working together they will advise the occupier on their legal obligations to ensure as far as possible, that any liability is mitigated. Landlords often serve inflated claims which can be massively cut down with the right advice.

For advice on this topic or on legal issues affecting your business, please contact the SIBA Legal Helpline on 0845 6710277

North West Law firm Napthens LLP is a SIBA supplier associated and Silver Standard Sponsor. The firm has a team of specialists looking after legal requirements of clients in the leisure and licenced trade sector, with clients including Daniel Thwaites Plc and Titanic Brewery. Napthens manage the SIBA Legal Helpline which offers legal advice and guidance on a wide range of legal issues affecting your business, including: General commercial, intellectual property, corporate finance, dispute resolution and litigation, commercial property, licensing, employment law and HR advice. Any enquiry through the helpline will receive up to 1 hour of free legal expertise (if further work is required, you’ll be advised of the appropriate charging structure). Full details of the helpline can be found on the SIBA Members Toolbox.

Education. Education. Education.

Brand and marketing guru Nick Law explores how educating your customers can help you to sell more beer…

Nick Law is the Creative Director of Hop Forward: a branding, marketing and business consultancy for the brewing industry. He works with a variety of beer businesses both in the UK and overseas and also runs a weekly podcast with a variety of guests from across the world of beer. Find out more at www.hopforward.beer or email nick@hopforward.beer

The power of learning

In 1997, Tony Blair delivered a manifesto for the forthcoming General Election containing the three main priorities under a New Labour government: ‘Education. Education. Education’. New Labour set about implementing their policies, after winning a landslide election. These were largely successful, especially in the area of improving GCSE grades amongst low performing schools. Another political figure, Nelson Mandela, once said: “Education is the most powerful weapon which you can use to change the world.” He was right: studies have shown that prisoners who learn a new set of skills and grow their knowledge are less likely to reoffend, compared to those who remain uneducated. At this point, you may be asking, ‘What has education got to do with beer?’. I would argue, everything! A friend of mine recently asked me, ‘What is a Cold IPA?’. ‘Well,’ I responded, ‘it’s an IPA that’s cold, innit?!’ We both chuckled at my facetious answer but - truth be told - I had no idea. So, we used everyone’s favourite educational tool - Google - to find out. I read aloud from an article I found called ‘The Essential Guide to IPA’ before we tucked back into our own beers, safe in the knowledge that a Cold IPA isn’t an India Pale Lager but isn’t too dissimilar to a Steam Beer…but isn’t a Steam Beer. You might be feeling confused at this point - I know I was. I had to read the article several times over before I fully understood what a Cold IPA is, and I thought I knew a great deal about beer. But what about the vast majority of people who don’t know a great deal about beer…?

Outside the echo chamber

It’s easy to shy away from educating consumers in simple terms about what’s in their glass, various beer styles or the brewing process for fear of teaching people to suck eggs. However, it’s also easy from within the craft beer echo chamber to assume that everyone who encounters your beers or attends your taproom are well versed in acronyms, hop varieties, vessel names, packaging types or beer styles. The reality is that most people don’t know and aren’t going to ask. It struck me recently when I picked up a can of a Double Dry Hopped IPA that consumers might overlook this beer, simply because the label in question didn’t offer any clues as to what a ‘DDH IPA’ is. Though the label was extremely pretty, it only told me that it was a ‘DDH IPA’. Yes, it listed the hop varieties, ABV and units of alcohol, but nothing else. The brewery missed a trick by not using their label as a way to explain to their drinkers what it is they’re drinking. Simple, relatable terms like ‘juicy, fruit and citrus’ are easily digestible terms. A short description of what to expect is a mere starting point when educating consumers about craft beer.

Keeping it simple

People relate to language they understand. When my wife - a teacher - gets together with her teacher friends, they suddenly start talking in terminology that would make Shakespeare’s head spin; I am instantly excluded from their conversation and thrust into a world of acronyms and subordinate clauses. Imagine how a potential customer might feel if you start hitting them with terms like ‘foeder aged’ without explaining what a foeder is. In a day and age where most people have access to the internet and social media, your website and social channels such as TikTok and Instagram are the perfect forum to educate people on what you’ve brewed, why it’s special and what people should expect using easily understandable language. At the end of a brewery tour, many attendees - especially those with little to no idea about craft beer - would often tell me they had found a new appreciation for beer. By providing them with a little education, you may win a craft beer devotee for life. Award winning beer writer, Lily Waite, wrote an excellent article for Good Beer Hunting (goodbeerhunting.com) called The Call Is Coming From Inside the House — Craft Beer’s Self-Inflicted Existential Crisis. She accurately depicts the problem that most craft brewers have: they’re too busy excluding people through their marketing language (amongst other things - read the article!) when they should be welcoming new drinkers into the fold. All it takes to win those people over is education, education, education.

Drinking Differently

Katy Moses, the Founder and MD of consumer insight specialist KAM Media, takes a look at how the UK public’s eating and drinking habits might be changing as we head in to 2023…

KAM Media is a boutique research consultancy, specialising in hospitality and retail, running bespoke and syndicated customer research programmes for both pub companies and on-trade suppliers. Find out more at www.kam-media.co.uk.

Say hello to the cautious consumer

The current cost-of-living crisis is not going anywhere for a while and consumers know it. Consumer confidence is at the lowest point in decades as many struggle with making ends meet and many more begin to spend with much more caution than we’ve seen for years; more than 1-in-2 expect to be much more aware of how they spend their money over the next 12 months. 1-in-3 Brits say they are already going to restaurants, pubs and bars less frequently compared with 3 months ago. Where we’ve seen growing footfall back to hospitality venues, we can expect to see a shift of beer consumption back to the home. And when people do eat and drink out 1-in-4 say they’ve been choosing cheaper menu items and 1-in5 have been choosing cheaper drinks. Whether we like it or not, price and more importantly ‘value’ have started to play a much more significant role in determining where, when and what people are drinking. This doesn’t mean we have to run panicking towards promotions and discounts, it means we need to look carefully at our pricing ladders. We need to ensure we have ‘entry level’ options for days when a consumer wants to spend less but also, we have the right premium, quality range to excite and delight consumers when they want to treat themselves. Which they will, even in tough economic times. Keeping prices down is a tough ask, virtually impossible in today’s climate, so operators should look at ensuring that they can maximise the ‘added value’ wherever possible. Consistency of quality serve, consistency of quality of staff, alongside cleanliness, atmosphere, events, etc. Every asset must be sweated to its maximum if we want to ensure that customers are not just understanding of the price increases but that they are happy to pay them as well.

The great moderation

We’ve said it before and we’ll say it again, it’s not all about booze! Some 55% of UK drinkers consume fewer than 10 units of alcohol per week, according to KAM research earlier this year. This growing ‘moderate’ group of drinkers are, however, also the most likely type of drinker to visit a pub at least once per month (78%), highlighting a major shift in consumer behaviour. As we’ve mentioned before, drinkers are increasingly moderating their alcohol intake but still actively taking part in traditionally alcoholled social occasions. There is no doubt that alcohol still plays a huge role in modern British life, but our social occasions are becoming less dominated by it. The research, carried out in partnership with Lucky Saint, found that the average UK drinker is now frequently moderating between alcoholic and non-alcoholic drinks, with nearly one in three pub visits (29%) and 37% of restaurant visits being completely alcohol-free. These occasions are most likely to be when dining with family, having lunch and also work meetings.

A time for experimenting

During lockdown many of us tried to replicate our visits to pubs, bars and restaurants in our homes. And there are many things which people have really enjoyed about staying in vs going out; a more relaxed environment, cooking our own food and trying new food and drink are among the top things, according to our recent research with Zonal. Lockdown has in fact been an amazing catalyst for consumers experimenting, trying new things and new brands, and just shaking up people’s eating and drinking habits. What does this mean for beer? Many people’s regular ‘repertoire of brands’ have been shaken up over the last couple of years. Many had spent a little more on new brands as they purchased via the off-trade vs on-trade. We’d expect that price will become an increasingly influential factor going forward with people also perhaps looking to trade down cost wise on certain occasions and really treat themselves with the well-known concept of ‘an affordable luxury’ on others.

Additional ‘functional’ benefits

A functional drink is marketed to highlight specific product ingredients or supposed health benefit. In addition to drinks that deliver digestive health benefits and boost energy, there is an increasingly growing market that delivers mood-boosting and relaxation benefits. Let’s take CBD-infused drinks for example, CBD in drinks has become mainstream and there has been an influx of functional beers, wines, kombuchas and adult soft drinks which include adaptogens in the ingredients list. Many are satisfying wider drinking occasions and meeting the needs of an increasingly health-conscious consumer with their well-being front of mind. 26% of consumers have tried a CBDinfused product according to recent KAM research. This has doubled since 2020 (13%). Generation Z and Millennials are the key target market for drinks containing CBD. It is unsurprising that over half of Gen Zs have tried CBD-infused products, much higher than any other age groups. There is a slight leaning to try CBD infused products at home compared with ‘out of home’, perhaps driven by the stigma due to the link with cannabis. However, the majority (32%), would still likely try it in hospitality venues.