HOTEL SERVICE

Auckland Star, Volume LXXVI, Issue 215, 11 September 1945, Page 6

HOTEL SERVICE

BREWERY CONTROL

PRESENT SYSTEM DEFENDED

P.A. WELLINGTON, this day. "It is confidently predicted that the advantages of brewery ownership will come to be looked on as a guarantee or a nigh' standard of comfort and of service, both in the dispensing of beer and other drinks, and in the provision of meals and beds," said Mr. L. J. Stevens, chairman of directors of Dominion Breweries in defending brewery ownership or control of licensed hotels, in evidence before the Royal Commission on licensing. Dominion Breweries, he said, had at first concentrated on the brewing and bottling of ale and stout and the sale of wine and spirits, he said, but soon recognised that any substantial consolidation of its business and increase of its turnover could be secured only if its marketing policy was co-ordinated with consumption at the retail end. The company found its objective could not be achieved merely by leasing hotels, as the owners were, in most cases, prepared to grant only short leases. The solution lay in the purchase of freehold.

Observance or the Law At present the company held 17 freeholds and 23 leases. The conipany considered that under its policy the public received the best of service and control, and the observance of the law was more rigidly enforced. The implication that licensee-managers more or less held their positions through illicit ti - ading to secure large profits for their employers, was not warranted. As the licensee-manager had no interest in profits, there was no inducement to break the law. The company considered that the profit motive did not apply in the case of either the licensee-manager or the lessee-licensee. If after-hour sales were made they were the result of the importunity of customers and were an indication of dissatisfaction on the part of the general public with the hours of sale now existing.

In the company's opinion, no organisations were better placed to give the necessary attention to property and implement a correct policy of development than were the organisations already interested in the trade.

It was wrong to allow the impression to become general .that the hotels in New Zealand were behind the standard of other Englishspeaking countries. There was a lack of luxury, hotels in the main centres for wealthy tourist class, but the family type of hotel was satisfactory.

The company had spent from £300 to £1000 on hotels to maintain hygiene in the service of beer and few tenants of privately-owned hotels would be prepared to incur that cost. It was only through methods that gave the company control of marketing at the retail end that such systems were made available.

For many years all the prices of brewery products had remained stable, apart from increased excise and sales tax which had been passed on to the consumers, said Mr Stevens. On the other hand costs had increased very substantially in all departments. The price of malt had increased 27 per cent, hops 9 per cent, wages 35 per cent, freight rates 10 per cent, and repairs arid maintenance fully 100 per cent. So far the company had carried the increases on the basis of expanding turn-over. Any marked decline in turn-over would make price increases to the consumer inevitable, or tax remissions would have to be allowed the manufacturers.

Causes of Dissatisfaction

"It is conceded on behalf of the company that in a very general way dissatisfaction is expressed with the licensing laws," said Mr. Stevens The dissatisfaction related to the hours of sale, which apparently were fixed on the theory that a man should drink in working hours but abstain strictly when he was at leisure. The much publicised and allegedly vicious habit of vertical drinking actually found few critics. The strength of beer found critics, but also found supporters. The company was led to the conclusion that if the hours of sale were made more convenient, and if hotel owners were given reasonable tenure between polls and an opportunity of rebuilding or reconstructing their hotels to modern standards, so as to enable a good service to be given to the public, little or no ground for dissatisfaction would be found to exist Mr. E. C. M. Robinson, a member of the commission, referring to police reports criticising some hotels owned by breweries other than witness' company, asked whether some of the large companies could not have diverted some of their large profits to improvements. Witness said he believed brewery ownership would, in future, be regarded as a mark of good accommodation. Witness said he thought the Grand and Cargen in Auckland were not on good hotel sites. In different locations they might pay well. The location of the Cargen made it just a place of residence. "You can't run a superior accommodation house on returns alone; you must have the bar trade," he said.