The Exchange hotel in Balmain, Sydney, which is facing a challenging future.
The Exchange hotel in Balmain, Sydney, which is facing a challenging future.

Traditional Aussie pub threatened with extinction

IT'S the staple on every Australian main street but could the old fashioned boozers' days be numbered?

A combination of changing demographics, the cost of living and a slow but steady fall in alcohol consumption is threatening the very existence of the pub.

In the Sydney inner-west suburb of Balmain, known for decades for its large number of pubs, things have got so bad a summit has taken place to try and prevent a string of sales and possible closures of historic hotels.

The Exchange Hotel and the Town Hall Hotel, two of the area's oldest, have recently been sold.

At least part of the former pub is to be converted into a call centre.

Part of Balmain's Exchange Hotel at Balmain, a pub since the late 1800s, will be turned into a call centre as the pub economy on the peninsula begins to falter.

In nearby Glebe and Newtown a number of bars and pubs have also closed with the Newtown Social Club music venue to be converted into a golf themed venue called 'The Caddyshack'.

"You know when a hotel is less profitable than a call centre there's a real problem in the industry and you need to intervene," Darcy Byrne, a candidate for the new position of Inner West Council mayor told news.com.au.

"We need to ensure this doesn't become as snow ball effect and we lose pubs that are then picked off one by one by developers".

The one-time Labor mayor of the former Leichhardt Council, who said takings in pubs had declined in the area round Balmain, brought together publicans to work out why hotels were in such a slump.

But the problems with pubs, together with nightclubs a $17 billion industry, may not be combined to a single suburb in inner city Sydney. One challenge is that we're simply drinking less alcohol.

A report by the International Wine and Spirits Record found that while incomes were rising globally, which usually leads to more spending on discretionary products like alcohol, liquor sales were actually down 1.3 per cent in 2016, with a 1.8 per cent drop in beer sales a key driver.

Despite Australia's reputation for being a nation of grog guzzlers, we're also drinking less.

Beer, in particular, is falling out of favour. In 1990 beer made up 60 per cent of all alcohol sold, today it's 40 per cent.

Analysis into the pub industry by researchers IbisWorld forecast lower alcohol consumption would impact pubs.

"This poses a problem for many hospitality establishments since a large portion of income is generated through sales of liquor to be consumed on-premises," the firm stated in a report from 2016.

"Over the past five years, traditional pubs have faced significant pressure due to changing consumer preferences. Old-fashioned pubs are increasingly making way for trendy bars and popular nightclubs.

"The declining demand is putting pressure on some urban pubs and clubs, small bars are continuing to pop up throughout the nation's capital cities."

IbisWorld stated the pub and bar market was "mature" with modest growth of a little over 1%.

Indeed, the surge in small bars in Sydney, which were only legalised in 2013 and can operate with less red tape than established bars, has been seen as a threat by some.

And the NSW Government, and policies such as Sydney's controversial lockout laws, were also to blame, Mr Byrne claimed.

Just this week a live music venue in Kings Cross, which was hosting an event connected to the Government organised Vivid festival, was reportedly forced to shut down at 9.30pm due to noise complaints.

"All over Sydney, the fun police have been in a war against live music,"  Mr Byrne said.

"The ill-thought-through lockouts laws have sent a message to the people of Sydney and visitors around the world that Sydney is closed after dark."

Councils, business and the community had to find solutions to make Australia's pubs less passé, he said.

"Council involvement with the hospitality sector, in general, has often been purely about safety and regulation," he said.

"Of course, that's important but we've also got to look at economic development and promotion and bring together publicans, listen to them and come up with practical recommendations that pubs and councils can implement together to increase patronage."

News Corp Australia


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