Committee Meeting – 5 December 2020

This meeting was held virtually via ZOOM on Saturday 5 December. No apologies were received. Also present were Martin Hilton (Allens) and Nick Metcalfe (Co. Sec.)

Year-to-date membership now recording a net gain of 12. Noted that Club is now included on AssetMatch’s electronic investment notification list. CMIC’s website can occasionally appear ‘slow to load’ – to be queried with web administrator. No new member feedback received. Those members who had suggested slogans to be thanked for their efforts, albeit Committee has agreed not to pursue for the time being.

Round-the-table discussion regarding recent activity at various investees and prospects, in particular Black Sheep, Black Eagle, West Berkshire and New River Retail.

Regarding investments, recent removal of (full) lockdown and publicity on immunisation program etc all indicative of prospects being more encouraging than before, but still perhaps too much false optimism about regarding level and timing of bounce-back – Summer rather than Spring(!?) – and closure still, sadly, a potential outcome for some businesses. Caution must therefore prevail and another modest round of across-the-board investment into a selection of (generally) ‘non-wet leds’ was agreed to – £150K into 8 existing investees.

Committee Meeting

This meeting was held virtually via Zoom on Saturday 7 November. Apologies were received from Sean Murphy. Also present were Martin Hilton (Allens) and Nick Metcalfe (Co. Sec.)

Minutes of the previous Zoom meeting were approved and previous action points agreed as dealt with.

A quarterly ‘traffic report’ supplied by CMIC’s web administrator was reviewed – pleasing to note the number of visits members (and presumably others) are now making to the site. Year-to-date membership still recording an overall net gain.

A lot of largely negative member feedback had been received following the substitution of the investment pie chart for detailed investment stats in September’s Club Matters, and this, together with other feedback, was debated at length. Agreement to reinstate the traditional detail next time around (with the pie chart as well, space permitting). Feedback on the £5K investment ceiling was mixed and it was decided to leave it as is for now. Some slogans had also been submitted, as requested, but it was decided to defer a decision on this.

CMIC voting at recent or forthcoming investee AGMs was discussed, with particular regard to City Pub Group, Thwaites, Loungers and West Berks and various points agreed in respect of these.

Against the backdrop of business now in the throes of a second lockdown and a possible release from it in early December, there was a lengthy ’round-the-table’ regarding the outlook for the various sectors, possible opportunities etc. With uncertainty rife, the consensus view nonetheless was that some investment should be ‘drip-fed’ in now (if nothing else, membership expectations would surely require this) and £80K was agreed to as between six existing investees and one newcomer, Bedlam Brewery.

An industry paper on possible government support for brewers was considered and its sentiments agreed with.

VAT rate reduction….good news for pubs and customers both?

On 8 July the Chancellor, Rishi Sunak, announced a temporary VAT rate reduction, from 20% to 5%, for ‘certain supplies of hospitality, hotel and holiday accommodation and admissions’. The reduced rate would apply for the 6-month period from 15 July to 12 January 2021, subsequently extended to 31 March 2021. The logic for this – obvious really, an urgent response to the Covid-19 pandemic to benefit the UK’s beleaguered hospitality industry by stimulating and boosting demand for its services. August’s Eat-Out-To-Help-Out was announced the same day.

Although it was pretty quickly obvious that alcoholic beverages wouldn’t be qualifying for the 5% rate, much else going on in the UK pub/restaurant/hotel sectors (eat-in and hot takeaway food, B+B etc) would qualify. The reduction was generally considered a good thing and something to be applauded, and it remains so 3-months in. Perhaps worth mentioning here though that a permanent lower rate of VAT for certain ‘hospitality’ supplies isn’t that unusual across other EU countries, and that closer to home still, the Isle of Man, treated as part of the UK for VAT purposes, has long enjoyed a 5% rate for supplies of hotel accommodation made there.

The law implementing the reduced rate simply makes it clear that affected businesses are liable to account to HMRC for 5% VAT on their hospitality supplies over the 8-month period in question; it does not, indeed in a free market economy it cannot, force those businesses to reduce their retail prices to customers during the lower rate ‘window’. Lowering prices is, of course, normally as good a way as any other to ‘boost demand’, but accompanying Treasury statements on this point were, at best, ambivalent – ‘we want businesses to pass on the benefit to customers if they can….but we recognise that many of those businesses have been closed and without income for months, and decisions on prices are ultimately for [them] rather than Government’.

This stance contrasts markedly with what happened in 2008 when the standard rate of VAT was reduced across the board for 13-months, from 17.5% to 15%, as a reaction the that year’s financial crisis. Here, the then Chancellor (Alistair Darling, Labour) practically implored businesses to reduce their prices (and to hurry up and do so in time for Xmas….!) and the Treasury believes that at least 80% did so.

In response to the latest rate reduction, businesses have been behaving in a number of different ways. Many, particularly restaurant and café chains presumably sensing good publicity to be had by shouting it loud, have reduced their prices, whilst others haven’t – the latter tending to be less vocal about it. One well known pub operator has gone public on the novelty of not reducing food prices but, instead, using the VAT saving to lower the retail price of certain alcoholic beverages – the so-called ‘Sunak Specials’….. At the end of the day, who is going to begrudge a single venue pub operator with a £9.99 cover price for food the opportunity to make an additional quid or so on that food to help compensate for a lengthy period of closure? It’s a bit different to a week-long ‘staycation’ for two in a decent hotel, where the VAT differential can easily stray north of £150 – surely more room for a gesture in the customer’s direction here?

As well as wrestling with their consciences over pricing, spare a thought that the rate reduction has also meant pubs requiring to become a little more VAT savvy generally. From dealing, typically, with only the 20% rate, the majority are now faced with correctly processing sales at two rates, and a few, with zero rate sales, at all three. Plenty of room for error here, not to mention the various operational complications that will also be arising:- for example, is a designer gin sold with a designer tonic one single alcoholic beverage liable at 20% (and does it make a difference if the bar person doesn’t pour the tonic into the glass….); is a severely weak shandy really an alcoholic beverage; what about my Buy-a -Meal-Get-a-Free-Pint promotion offer; are ‘room service’ meals really 20% or just 5% etc etc?? HMRC guidance on matters like these isn’t as fulsome as it might be and questions like these will likely keep m’learned friends busy once the dust has settled.

Finally, and surely worth a quick mention, HMRC has chosen to illustrate its published guidance as to when the 5% rate would apply to ‘admissions’ with the example of a brewery tour. Great news, as it confirms that such tours are indeed liable at the lower 5% rate for the time being, but, and as we all know only too well, chance would be a fine thing at this particular point in time…….!

Nick Metcalfe

Nick Metcalfe is the Company Secretary (honorary) of CAMRA Members’ Investment Club Ltd. In a previous life he was the partner in charge of PwC’s indirect taxes practice in northern England.

12 October 2020

Committee Meeting

This meeting was held virtually via Zoom on Saturday 3 October. Apologies were received from John Westlake and Sean Murphy. Also present were Martin Hilton (Allens) and Nick Metcalfe (Co. Sec).

Minutes of the previous Zoom meeting were approved, and previous action points agreed as having been dealt with.

Membership year-to-date still showing an overall net gain. Admin Team’s ongoing communication with James Sharp was noted and discussed, particularly in relation to the advance notifications by JS of forthcoming investee AGMs and similar such announcements. Committee authorised JS to renew CMIC’s Stock Exchange Legal Entity Identification number (‘LEI’).

The appearance of the ‘Brewer in lockdown’ article in the most recent What’s Brewing was noted approvingly.

It was agreed, with sadness, that the members’ social gathering tentatively planned for December could not realistically now go ahead because of ongoing Covid restrictions; furthermore, enquiries confirmed that the reinstatement of brewery tours was not possible yet.

Various report-backs on the national brewing and retailing scene were made, with a clear agreed consensus that times were indeed very hard out there right now across all sectors. Whilst tempting to invest nothing at all now, a nominal £20K was agreed to, with £5K each going into four existing multinationals.

Committee Meeting

This meeting was held virtually via Zoom on Saturday 12 September. Apologies were received from Iain Loe. Also present were Martin Hilton (Allens) and Nick Metcalfe (Co. Sec.)

Minutes of the previous Zoom meeting were approved, subject to one minor amendment, and previous action points agreed as having been dealt with.

Allens reported a small net loss in membership numbers during August and September-to-date; year-to-date figures, however, still showing a net gain, and member withdrawal requests remain low. A batch of new membership flyers had now been printed and were available for general use. A contractor’s proposal to provide ongoing support services for the ACCESS system was discussed and agreed to.

No new member feedback had been received and the two members previously feeding back on Wetherspoons and the possibility of a ‘rescue fund’ had both been contacted personally.

A Committee member paper on shareholder activism/corporate governance was discussed in detail and a decision taken to upload it to the CMIC website; similarly, an article themed ‘a brewer in lockdown’ would be submitted to the editor of What’s Brewing for possible inclusion.

Updates were provided regarding activity at Black Sheep and Black Eagle, followed by short reports of current developments at various other existing and potential investees. A limited reshuffling of Committee members’ individual portfolio responsibilties was also agreed to.

Wide-ranging discussion as to how lockdown emergence appeared to be playing out across sectors and geographies. Agreed that there would be partial investment only of available funds and a total of £50K was agreed to across three investees, including £20K into recently-identified United Malt, an Australian listed company with real ale credentials in the UK .

Shareholder activism – a 21st Century approach to campaigning.

All CAMRA members will know that their organisation has been one of the most successful campaign groups of recent times. Thousands of volunteers have devoted countless hours to promoting traditional cask ales as a unique distinct beer style, with a degree of success that was barely imaginable when the campaign started. CAMRA members, like supporters of many other campaigns, are individuals who feel very strongly about an issue that is close to their heart. Such motivated individuals will value any opportunity to advance their cause, and, in recent years, an increasing number of them have adopted the tools of ‘shareholder activism’ to advance their aims. This often takes the form of buying a few shares in a company, and then using the shareholding as a platform to promote their agenda.

When you own shares in a company you become a part-owner of that company, and that gives you certain rights. As well as receiving copies of the annual report and accounts, you can also attend the company’s annual general meeting (AGM), which gives you an opportunity to speak to the company Directors face-to-face, and ask them about the issues that are important to you – such as asking about the company’s continued commitment to brewing/retailing real ale. Companies are required to be run for the benefit of their owners, so the Directors are obliged to listen.

In recent years, in addition to financial performance, a broader range of issues has come under increasing scrutiny. So called ESG (environmental, societal and governance) factors have increasingly been recognised as being relevant to a company’s overall performance, and have attracted the attention of traditional investment institutions and pension funds as well as campaigners. Some campaigners have been so successful in convincing other investors of the importance of their issues, that they have been able to assemble strategic alliances of city institutions who between them may own a substantial part of company, leaving the company with little choice but to engage with the issues raised.

As an individual, attending a company AGM and asking a well-placed question gives you the undivided attention of the company’s top decision makers, and can be hugely influential in shaping their view. Other campaigners have found that a campaign delivering thousands of protest e-mails to a company has produced no response, but a well-placed question at an AGM has resulted in an immediate undertaking from the company to address the concern.

The CAMRA Members’ Investment Club is an informal grouping of CAMRA members who have pooled part of their savings to build up shareholdings across a range of pub and brewing companies. The Club seeks to attend as many AGMs as possible in a typical year, and will use the opportunity of a formal question to ask about the company’s continued commitment to real ale. Outside the formal meeting, a quiet word with the Chairman or Chief Executive has been known to secure the introduction or restoration of cask ale to an individual pub. When there have been specific high-profile or controversial proposals relating to an investee company, the Club has also occasionally secured one-to-one meetings with company Directors to ensure the views of real ale enthusiasts are made known right at the very top.

The Club is run by an elected committee, who receive presentations from investee companies at their bi-monthly meetings, and the Club’s own well attended AGM always hosts a prominent guest speaker from the industry. When Club members attend brewery visits organised by the Club, they are invariably hosted with a degree of hospitality appropriate to their status as part-owners, and these visits represent yet another forum for the Club to engage with Directors and senior management on issues of concern.

While traditional campaigning will always form the bedrock of CAMRA’s success, members will always be on the look-out for complimentary approaches that can support the continued availability of our beloved real ale.

Ian Brindley – CMIC Committee member – Sept 20

Committee Meeting

This meeting was held virtually via Zoom on Saturday 15 August. There were apologies from John Westlake, Bob Crumpton and Nick Metcalfe. Also present were Richard Dawson and Martin Hilton (both Allens).

Minutes of the previous Zoom meeting were approved and previous action points agreed as having been dealt with.

Allens reported that there were now eleven branch ambassadors and that discussions were taking place with the ‘Access’ contractor regarding the terms of a possible support service going forward. An analysis of the current level of contributions from members indicated that there was no present need to consider an upward revision to the annual investment ceiling.

Feedback had been received from members regarding Wetherspoons and the possibility of a ‘rescue fund’ for small brewers. Both issues to be discussed with CAMRA HQ, with report back in due course, and members to be advised of outcome.

Round-the-table discussion about lockdown relaxations and the prospect of further spikes and further lockdowns being announced. With ‘caution’ currently the main driver, further small investments were agreed in Adnams and Shepherd Neame, with auction bids to be made in Wadworth’s and Hydes. Residual holdings of the Star Investment Club, being wound down finally now, would also be acquired (value c£76K)

Forthcoming Committee meetings confirmed for Saturdays 12 September, 3 October and 7 November (all Zoom); also 5 December (hopefully Nottingham, but subject to Covid-19 developments).

Committee Meeting

This meeting was held virtually via Zoom on Saturday, 18 July 2020. There were apologies from Ann Mace, Chris Holmes and Bob Crumpton. Also present were Martin Hilton (Allens) and Nick Metcalfe (Co. Sec.).

Minutes of the previous Zoom meeting were approved.

It was reported, pleasingly, that five further branch ambassadors had come forward following the recent Club Matters circulation.

Much of the meeting was taken up with how Committee members were seeing emergence from lockdown playing out in their own localities – whilst various trends were identified, uncertainty was still very much to the fore.

Updates were received on developments at Black Sheep and Black Eagle, and there were wide-ranging reports of current developments at a significant number of existing and potential investees.

Noting that the fund had dropped further in value since the end of June, the Committee decided to ‘drip feed’ £100K only of the available investment monies at this point in time into ten existing investees (including £20K of this into Shepherd Neame given their favourable behaviour towards tenants during lockdown).

The recent CAMRA ‘Discourse’ thread, much of which appeared critical of CMIC, was discussed with a sense of incredulity and déjà vu both. It was reported that the possibility of a members’ social gathering at The Victoria, Beeston later in 2020 was, sadly, now looking increasingly doubtful.

Future Committee meetings confirmed for Saturdays 15 August, 3 October (both now via Zoom rather than face-to-face) and 5 December [#] (# subject to Covid-19 developments).

Marston’s Brewery Deal

The Club has decided to vote against the brewery deal between Marston’s and Carlsberg

We put forward some questions to Marston’s and received the following answers – see below

1.       What reassurances can you give about continuing your regional breweries, such as Jennings, Wychwood, Ringwood and Eagle (Bedford)?

There are currently no plans to close any of our smaller, local breweries such as Jennings or Ringwood. However we cannot make long term guarantees about the future of any of our breweries since we always have to behave in the best interests of our shareholders and that involves a constant review of all operations.

2.       Can you give assurances about the Thwaites brand in particular?

The proposed Joint venture with Carlsberg UK will have no impact on our arrangements or plans with Thwaites.

3.       Will you continue to offer canning and bottling facilities to smaller brewers?

We will continue.

4.       Will your pub chains continue to grant access to smaller brewers’ products?

The Joint Venture will have no material impact on the beers offered in Marston’s pubs.

Committee Meeting

This meeting was held virtually via Zoom on Saturday, 27 June 2020 in lieu of two earlier scheduled meetings (Oxford and Nottingham), both of which had been cancelled because of the Covid-19 lockdown. There were no apologies and full (virtual) attendance. Also ‘present’ were Martin Hilton (Allens) and Nick Metcalfe (Co. Sec.)

Minutes of the previous meeting at Macclesfield were approved. General consensus that the recent ‘virtual AGM’ had been handled as well as prevailing circumstances allowed and the draft AGM minutes were approved.

Macclesfield action points had been dealt with where possible, albeit there was general agreement that some points had been overtaken by the lockdown.

Allens reported that the ‘Access’ upgrade was now well in progress and membership statistics were circulated showing that member numbers had recorded a net gain in 2019-2020, with a similar position so far year-to-date 2020-2021.

Having identified that funds were available to invest, there was a round-the-table discussion about appetite for actually doing so at this point in time and, if so, where. An investment of £20K each across ten existing investees was eventually agreed, in addition to a bid for a forthcoming Wadworth’s share offer. Balance of investment funds to be carried forward until more detail on lockdown emergence becomes available.

John Hattersley was proposed and seconded, and accepted, the position of Chairman for 2020-2021.

Forthcoming Committee meetings confirmed for Saturdays 18 July, 15 August, 3 October and 5 December (all subject to further Covid-19 developments).

CAMRA MEMBERS’ INVESTMENT CLUB – AGM 2020

Minutes of the AGM held virtually on Saturday, 13 June 2020, as approved by the Committee on Thursday, 18 June 2020 and subject to approval by the Members at the 2021 AGM

Present: this meeting was held virtually via a series of telephone conversations and e-mails involving Committee members and the Company Secretary in the days leading up to 13 June.

1) Chairman’s welcome – the full text of the Chairman’s virtual welcome address will be posted to the website later this week and will also appear in the June edition of Club Matters.

2) Approval of minutes of 2019 AGM – these were duly approved (proposed by Iain Loe, seconded by John Westlake).

3) Election of Committee 2020-2021 – four members of the Committee were eligible for re-election (John Hattersley, Chris Excell, Dave Goodwin and Ian Brindley), and with no other nominations having been received all four were duly re-elected (proposed by Neil Kellett, seconded by John Westlake).

4) Approval of accounts for ye 31 March 2020 – it was noted that Hadfields had now finalised the accounts, which were duly approved (proposed by John Westlake, seconded by Neil Kellett).

5) Appointment of Reporting Accountants 2020-2021 – Hadfields, having expressed their willingness to continue in office for the coming year, were duly appointed (proposed by Iain Loe, seconded by John Westlake).

6) Members’ questions and observations – the Company Secretary reported that a small amount of correspondence had been received and that it was supportive of the Committee’s position. In particular, it seems there is appetite for a members’ ‘social’ later in the year, if possible.

7) Proposed rule change Resolution – the resolution to change Rule 3.v) was approved (proposed by Neil Kellett, seconded (remotely) by Bob Martin.

8) Any other business – there being no further business, the meeting was closed. 

Nick Metcalfe l Company Secretary l 18 June 2020

CMIC AGM – Chairman’s virtual welcome address

I welcome members to this virtual Annual General Meeting and acknowledge the challenges you are all facing at this time. I hope that all are managing through this difficult period and recognise that many might be focused on matters other than investment ones.

I refer to my recently published report and would like to thank the Club’s service providers for the way they have navigated the challenges of recent months. Their resilience and flexibility has been both robust and admirable. In particular I thank Allens and Hadfields for producing and finalising the accounts and my fellow Committee members for their ongoing diligence and hard work.  I find it reassuring that contribution levels remain robust and that withdrawal requests have, so far, been relatively small, but I have concerns that the significant fall in predicted dividend income will act as a considerable operational constraint for the foreseeable future.

Looking forward, I think it unlikely that the speed at which the economy entered the crisis will be mirrored by the rate of recovery. Concerns over the possibility of a second wave of the pandemic, coupled with the uncertainty over the nature of the virus and its behaviour, will curtail the removal of lockdown restrictions and so it is imprudent, I believe, to expect a return to pre-Covid conditions any time soon.

However, with the prospect of some pubs looking to open as soon as early July, a sense of perspective is precious. As individuals, it is tempting to make predictions about complex and inherently uncertain matters, but it is presumptuous to do so. We tend to be better observing rather than concluding prematurely. It is also dangerous to focus too much on one event, however terrible, but that is what we tend to do. If we are not extremely careful we come to believe that the unusual is usual and that this is what the world looks like. In my update notes I suspect that I might be guilty of doing just that.

I would like to leave you with a couple of observations. Firstly, most sellers need to time the market twice: once on the way out and again on the way back in. To get that right once is difficult. Twice requires serendipity. The old adage about ‘time in the market’ rather than ‘timing the market’ remains as true as ever. However horrifying the cost of Covid-19 turns out to be, things will get better even if we don’t know when. It might be brutal to say this now in June, but to ask how our children and grandchildren will pay for it is not a question for now. Rather, we should continue to evolve and look forward to what the Swedish health guru Hans Rosling identified as ‘the secret, silent miracle of human progress’.

John Hattersley l Club Chairman l 18 June 2020

CAMRA MEMBERS’ INVESTMENT CLUB – AGM 2020

Minutes of the AGM held virtually on Saturday, 13 June 2020, as approved by the Committee on Thursday, 18 June 2020 and subject to approval by the Members at the 2021 AGM

Present: this meeting was held virtually via a series of telephone conversations and e-mails involving Committee members and the Company Secretary in the days leading up to 13 June.

1) Chairman’s welcome – the full text of the Chairman’s virtual welcome address will be posted to the website later this week and will also appear in the June edition of Club Matters.

2) Approval of minutes of 2019 AGM – these were duly approved (proposed by Iain Loe, seconded by John Westlake).

3) Election of Committee 2020-2021 – four members of the Committee were eligible for re-election (John Hattersley, Chris Excell, Dave Goodwin and Ian Brindley), and with no other nominations having been received all four were duly re-elected (proposed by Neil Kellett, seconded by John Westlake).

4) Approval of accounts for ye 31 March 2020 – it was noted that Hadfields had now finalised the accounts, which were duly approved (proposed by John Westlake, seconded by Neil Kellett).

5) Appointment of Reporting Accountants 2020-2021 – Hadfields, having expressed their willingness to continue in office for the coming year, were duly appointed (proposed by Iain Loe, seconded by John Westlake).

6) Members’ questions and observations – the Company Secretary reported that a small amount of correspondence had been received and that it was supportive of the Committee’s position. In particular, it seems there is appetite for a members’ ‘social’ later in the year, if possible.

7) Proposed rule change Resolution – the resolution to change Rule 3.v) was approved (proposed by Neil Kellett, seconded (remotely) by Bob Martin.

8) Any other business – there being no further business, the meeting was closed. 

Nick Metcalfe l Company Secretary l 18 June 2020

CMIC AGM – Chairman’s virtual welcome address

I welcome members to this virtual Annual General Meeting and acknowledge the challenges you are all facing at this time. I hope that all are managing through this difficult period and recognise that many might be focused on matters other than investment ones.

I refer to my recently published report and would like to thank the Club’s service providers for the way they have navigated the challenges of recent months. Their resilience and flexibility has been both robust and admirable. In particular I thank Allens and Hadfields for producing and finalising the accounts and my fellow Committee members for their ongoing diligence and hard work.  I find it reassuring that contribution levels remain robust and that withdrawal requests have, so far, been relatively small, but I have concerns that the significant fall in predicted dividend income will act as a considerable operational constraint for the foreseeable future.

Looking forward, I think it unlikely that the speed at which the economy entered the crisis will be mirrored by the rate of recovery. Concerns over the possibility of a second wave of the pandemic, coupled with the uncertainty over the nature of the virus and its behaviour, will curtail the removal of lockdown restrictions and so it is imprudent, I believe, to expect a return to pre-Covid conditions any time soon.

However, with the prospect of some pubs looking to open as soon as early July, a sense of perspective is precious. As individuals, it is tempting to make predictions about complex and inherently uncertain matters, but it is presumptuous to do so. We tend to be better observing rather than concluding prematurely. It is also dangerous to focus too much on one event, however terrible, but that is what we tend to do. If we are not extremely careful we come to believe that the unusual is usual and that this is what the world looks like. In my update notes I suspect that I might be guilty of doing just that.

I would like to leave you with a couple of observations. Firstly, most sellers need to time the market twice: once on the way out and again on the way back in. To get that right once is difficult. Twice requires serendipity. The old adage about ‘time in the market’ rather than ‘timing the market’ remains as true as ever. However horrifying the cost of Covid-19 turns out to be, things will get better even if we don’t know when. It might be brutal to say this now in June, but to ask how our children and grandchildren will pay for it is not a question for now. Rather, we should continue to evolve and look forward to what the Swedish health guru Hans Rosling identified as ‘the secret, silent miracle of human progress’.

John Hattersley l Club Chairman l 18 June 2020

CMIC – 2020 AGM MESSAGE FROM THE CHAIRMAN

The Committee announced earlier this month that the planned AGM to be held at the Victoria in Beeston on June 13 would be adjourned. However, in light of present Government advice regarding public gatherings and travel restrictions, and it being unlikely that these will be revised sufficiently to enable the Club to hold a traditional meeting in the foreseeable future, it has been decided to hold a virtual AGM so that the day-to-day business of the Club can continue uninterrupted. This unprecedented decision has been made easier by the absence of any new nominations to the Committee. So, although Government advice and guidelines will continue to be monitored closely, the attached agenda will be voted upon by the Committee ‘virtually’ and the outcome posted on the website.

Members who wish to raise questions regarding the agenda, or who wish to comment generally, are asked to contact the Admin Office by email by no later than close of business on Thursday 11 June (citing ‘AGM question’ in the heading). Any questions submitted, and the answers given, will be posted on the website as soon as possible after the AGM. The Committee reserves the right to bundle together any like-minded questions when answering them, and also undertakes not to include the names of questioners unless specifically authorised to do so.

The Committee recognises that this is not ideal, so if circumstances subsequently allow and there is sufficient appetite amongst Members to do so, we would consider holding a lunch similar to that associated with a traditional AGM later this year, with or without a guest speaker and with no official business to transact on the day.

John Hattersley

MAY 2020

At the time that these musings are being put together there are hesitant signs that countries are beginning to emerge from lockdown. There is, of course, a difference between physical and economic lockdown as well as a time lag and in the UK details of the relaxation are still awaited. Nevertheless, it is worth trying to collate some thoughts about what might be coming our way.

There will undoubtedly be relief for the majority but there will also be a residual fear about future prospects and the possibility of a second wave of the pandemic. This pervasive anxiety will colour people’s experience and behaviour in ways unknown and might offset any euphoria those fortunate to have come through unscathed might feel. It is almost certain that the new everyday will include a fraction of life previously enjoyed which will be missing going forward. A world where the office is open but the pub isn’t will only emphasise that the society which emerges will be full of qualitative differences in the way that life feels from the one which preceded it.

Behaviours

The pub is, unfortunately, probably going to be an apt demonstration of that. Allowing pubs to open, irrespective of layout or adaptation to social distancing, will account for little if people do not want to visit them. Those who will need to leave the security of home to go to work could well feel less comfortable doing so to have a good time. People are likely to remain wary of crowds or travel. Research from  various organisations in the USA and Europe suggest that personal choice, rather than government policy, has been a major factor in the drop seen in personal spending and personal choices often prove harder to reverse. Drops in residual spending do not just reflect a desire for isolation but also the simple fact that a lot of people will have a lot less money in the post-lockdown world.

Pubs

So far Covid-19 has not been a full blown disaster for either the retailing or brewing arms of the UK drinks sector. Drinking alcohol is not just a way to celebrate good times but to endure bad ones as well. Sales for home consumption have boomed. Optimists argue that polls indicating that more than half of Britons are looking forward to visiting a pub – putting it third behind visiting friends and family – suggest that a swift recovery is likely. As one commentator described it: “a pent-up demand for social lubrication”. But I’m not so sure. It’s not just research like that already mentioned about personal habits changing that make me cautious but real concerns about the consequences of the continuing rationing of leisure space. Social distancing has not ended but is just being loosened. Any spike in new infections could see greater enforcement of tighter measures.  Without the swift development of a vaccine, which may take months to materialise, standing next to each other at a bar feels like history.

Brewers

One can write a book postulating on the various outcomes for town centre pubs dependent on way home from work or evening out trade to food led pubs abandoning waiter service for takeaways, for pubs with beer gardens and those tight for space but that is for another time. Now, I turn to the brewers because they, especially cask beer brewers, have suffered badly not least because it is not easy to switch from an on-trade to off-trade model, from draught to packaged. Even those that have innovated have not recovered anything like the loss of their former wet trade. The short term omens are depressing as well because during the financial crisis a decade ago, when beer and cider sales went from 6% growth in 2007 to 1% decline in 2009, it was brewers ( not vintners or distillers ) who fared worse. What does this mean for the industrial landscape? If they were struggling pre Covid-19 breweries are more likely to fail now than pubcos. Of these, the craft and microbreweries are most exposed despite the welcome upsurge in shopping locally and click and collect. Their premises and output are smaller and margins were already tight pre-pandemic. Going forward, complying with social distancing costs and with less leverage to get product on supermarket shelves, margins will not improve. Given that there were probably too many breweries in the UK already to sustain themselves many are likely to fail or to succumb to industry giants. Creativity and variety might well be lost. Even the big boys, some laden with debt, will find it difficult to manoeuvre and might end up promoting their affordable brands, rather than premium ones, in order to keep market share thus hitting already narrow margins further.

Demographics

I don’t want to overplay some longer term threats that loom on the horizon but I suspect that Covid-19 has brought the horizon closer. The most immediate of these is demographic change. UK peak alcohol consumption has traditionally been between the ages of 18 and 34. Even before this year it was clear that Millennials were drinking less alcohol and socialising in coffee shops as much as in pubs. I can only see that trend in youthful sobriety continuing because they will have less money and will need to think about saving in a way that they haven’t before.  Those born in the late 1990s and early 2000s are entering a job market which is going to be extremely hostile. They are naturally attracted to or required by lower paid sectors and according to the Institute for Fiscal Studies 30% of British employees aged under 25 worked in one of the lockdown sectors.

I hope that I’m not being overly pessimistic but I do think that those who are figuring in a quick bounce back are being naïve. We should be preparing ourselves for a marked drop in pub trade and beer consumption in the short term. There is an adage that it takes two months to form a habit. If that holds good the drinks industry that emerges will be different to that which we enjoyed in 2019.   I hope I’m wrong but there is still a lot of uncertainty out there.

29 May 2020

CAMRA MEMBERS’ INVESTMENT CLUB – AGM 2019

Minutes of the Annual General Meeting held at the Victoria, Beeston on Saturday 15th June 2019 proposed by the Company Secretary and approved by the Committee on 3rd August 2019 subject to approval at the 2020 AGM

Present:          Chairman John Hattersley, committee members Chris Holmes, John Westlake, Neil Kellett, Chris Excell, Bob Crumpton, Iain Loe, Ian Brindley, Sean Murphy, Ann Mace, Mark Howarth (Company Secretary) and approximately 100 members of the Club.

Apologies:       Colin Bodimeade, Dave Goodwin, Ken & Jan Holt, Colin Valentine

Welcome by the Chair

The Chairman welcomed all members to this year’s AGM.

Chairman’s Report

The Chairman thanked Howarth Associates for their administration of the Club and for the handover to Allens, James Sharp stockbrokers for their work during the year and Hadfields for acting as external accountants for the Club.

He then reported on the continued decline in membership numbers, a net loss of 90 in the year to 31 March, but monthly cash flow remained positive. He discussed the continued effort to recruit new members and the relationship with CAMRA, discussions with the NE and improving channels of communication. Coverage in What’s Brewing remained limited despite the Club’s attempts to improve it.

He then reported on the meeting with the Board of Fuller’s in London after the announcement of the sale of the brewing business to Asahi prior to the EGM and that members of the Committee had attended the EGM and that the Club voted against the resolutions.

The Chairman said a few words regarding the recent passing of former Campaign Chair and Committee member Jim Scanlon.

The Chairman then took a few minutes to introduce the new administration team from Allens in Stockport.

The Chairman floated the idea that the Club might wish to explore the possibility of removing the requirement to be a CAMRA member in order to join CMIC. After discussion the suggestion that the idea be investigated was put to the meeting and the show of hands was slightly in favour. This would be discussed further at future Committee meetings.

The state of the markets and the Committee’s attitude to risk was then discussed, in particular the subject of crowdfunding. The Chairman detailed two small investments which had been made in Loch Lomond and Nethergate and the fact that the Committee was also looking at future possible investment opportunities.

The Chairman then opened the meeting to questions from the floor. First to raise a point was John Cryne who discussed the Committee’s attitude to the Asahi takeover of Fuller’s. Iain Dobson then raised the possibility of taking out a paid advert in What’s Brewing to try to assist with recruitment.

Brewery Visits

The schedule of future visits was detailed along with the proposed trips to Butcombe which had been cancelled at short notice by the brewery and to Belhaven which would probably take place in November.

The Chairman then asked members for any other ideas for brewery visits for the 2020 programme.

Approval of the Minutes of the 2018 Annual General Meeting

These were approved.

Approval of the accounts year ended 31 March 2019

The Chairman asked for the approval of the accounts. It was proposed and then seconded that the accounts be approved by the meeting.

Election of Committee

Four members of the Committee (Bob Crumpton , Chris Holmes, Neil Kellett, Ann Mace ) were eligible for re-election. All four expressed their wish to stand again and, as there were no other nominations, they were duly re-elected.Appointment of external accountants

It was proposed, seconded and approved that Hadfields be re-appointed as external accountants to the Club.

Any Other Business

There was no other business.

The Chair then thanked Castle Rock for their sponsorship, all members for their attendance and hoped to see everyone same time next year.

The meeting was formally closed at 12:05.

AGENDA Annual General Meeting, to be held virtually on Saturday, 13 June 2020

1) Chairman’s welcome

2) Approval of minutes of 2019 AGM

3) Election of Committee 2020-2021 (note 1)

4) Approval of Accounts for ye 31 March 2020 (note 2)

5) Appointment of external auditor for 2020-2021 (note 3)

6) Members’ questions and observations (note 4)

7) Proposed rule change Resolution – deceased members (note 5)

8) Any other business

Nick Metcalfe | Company Secretary

Notes to the Annual General Meeting Agenda, to be circulated with the Agenda

Note 1) No nominations for election to the Committee had been received at the Admin Office by 15 May. Under Club rule 4), four existing Committee members are due to retire by rotation (John Hattersley; Chris Excell; Dave Goodwin and Ian Brindley), all of whom have expressed their willingness to continue in office.

Note 2) When the accounts to 31 March 2020 were circulated to the members with the year end material, they were still in DRAFT form. Hadfields, the Club’s external auditor, have now been able to review the figures and, accordingly, these figures are now FINAL.

Note 3) Hadfields have expressed their willingness to continue in office.

Note 4) Questions and observations were solicited from the members via a ‘Message from the Chairman’ posting to the Club’s website on [28 May 2020].

Note 5) Membership of CAMRA has always been a pre-requisite of CMIC membership – you cannot join CMIC unless you’re in CAMRA first, and if you leave CAMRA you have to exit CMIC at the same time. There are no plans to move away from this fundamental principle. However, and following feedback received from the membership, the Committee recognises that in one particular situation – the death of a CMIC member – this rule is somewhat inflexible and not always helpful to those trying to settle a deceased’s estate, often a close family member with other things on their mind……

The position at the moment is that the repayment of a deceased member’s units is based on their value at the end of the month in which the death is reported to the Admin Team, and the monies due at that point are set aside pending probate, at which point they are paid out. We would now like to introduce a further element of flexibility into this process by giving executors the option of a 12-month ‘standstill’ arrangement so that they can have more time to decide what to do with the units, eg market conditions might be considered about to improve; an entitled beneficiary might decide to join CMIC themselves and take over the holding etc.

So, the Resolution for the meeting to consider and vote on is the Committee’s wish to put the above into effect by amending the present Club rule 3.v) Deceased Members such that, henceforth, it would read as follows:-

In the event of the death of a member the default position is that repayment of units will be based on the current value at the end of the month in which the death is notified to the Club. The amount due, together with late contributions, will be placed in a separate account pending the finalisation of the claim by the estate of the deceased member. Alternatively, and upon request by the estate when the death is notified, the units can remain invested in the Club for a period not exceeding 12-months from the end of the month of notification.

The relevant FAQ surrounding this point would also be amended/expanded to further explain the position, including a ‘hold harmless’ statement on any tax consequences.

Nick Metcalfe | Company Secretary | 28 May 2020

Notice of 2020 Annual General Meeting

The 2020 AGM was scheduled to take place on Saturday, 13 June at the Victoria Hotel, Dovecote Lane, Beeston, Nottingham NG9 1JG. In view of the difficulties presented by Covid-19, however, and as predicted in the Chairman’s Report above, a decision has now been taken to postpone the AGM until a later date, ideally before the end of September. PLEASE LOOK OUT FOR UPDATES ON THE WEBSITE.

Nick Metcalfe – Company Secretary – 31 March 2020

Please note that any members who have already paid their £16.95 for lunch and refreshments at the AGM who now wish to receive a refund should please contact the Admin team to progress this. Otherwise, payments will be carried over to the rearranged AGM.

Committee Nominations

The postponement of the AGM notwithstanding, Club rules are such that any member wishing to be a candidate for election to the Committee should still please forward their nomination (by mail or e-mail), clearly marked ‘’Committee Application’’, to the Admin office at Stockport as shown below by 15 May 2020. As noted in the Chairman’s Report, the four Committee members retiring by rotation this year have all expressed their willingness to continue in post.

Website

As most members will already know, the Club’s new website is now up and running – please keep checking it for updates on all current matters. The Admin team is striving to maintain normal service throughout the present crisis, but Government guidelines on social distancing etc are such that this isn’t always possible. Please bear with us if certain matters take a little longer than usual to process, and please all take good care of yourselves out there.

Accounts

Finally, please note that because of the social distancing regime presently in place the Accounts enclosed herewith to ye 31 March 2020 have not yet been subject to the usual scrutiny by Hadfields, Chartered Accountants.

Wetherspoons

The Club has received some comments from members regarding the reported actions of Wetherspoons towards their staff and suppliers in response to the Covid-19 lockdown. The early reports, principally published by Forbes magazine and The Times, but later recycled by other parties, suggested that Wetherspoons had stated that staff would not be paid immediately and that some ought to seek temporary employment elsewhere. These comments, not surprisingly, attracted adverse criticism.

The Club is aware that members share different views about Wetherspoons, reflecting the diverse feelings of CAMRA members. All of these views are represented across the membership of the committee, who have spent some time considering the issue.  Whilst Wetherspoons is the largest retailer of real ale, a keen supporter (if tough customer) of many smaller breweries and has forged strong links with the Campaign, not everybody is of the view that the company is a strong supporter of pubs per se. Moreover, it can be argued that the company’s corporate governance sometimes falls short of the standards expected of a listed plc.

The company responded robustly to the reports, and subsequently corrections were published through the London Stock Exchange and by The Times. The following lines have been extracted from the published corrections. :-

An email, sent out with the video, said: “All hourly paid employees will be paid as normal on Friday 27 March for all hours worked up to, and including, Sunday 22 March 2020.”

Staff were paid on that Friday and have been paid on every Friday since.

The statement in Forbes that staff were told they could “trot off to get a job in a supermarket” is misleading.

The video actually said “If you’re offered a job in a supermarket, many of you will want to do that. If you think it’s a good idea, do it…I promise you, we’ll give you first preference if you want to come back.”

Furloughed pub and restaurant staff are legally allowed to receive extra income if they work for supermarkets as well.

Forbes also said that the company “announced that… pubs WILL (Wetherspoon’s capitals) open sometime in June.” That is also incorrect.”

The company has also stated that Wetherspoons has consistently paid a sum equivalent to about 50% of its net profits as a bonus to staff, 88% of which is paid to pub staff. In addition, the company has over 10,000 employee shareholders, who have received free shares over many years.

In this case, it does appear that the company has been the victim of poor reporting. Given the company’s standing in the industry and its policies towards cask beer, the Committee continues to believe that its shares ought to be held within the portfolio. Nevertheless, the Committee will continue to monitor the situation, and is pleased to receive feedback from members on this or any other of the club’s investments.