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EDITORIAL: The State Of The Tavern Market

Posted On: 5/10/2007

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The U.S. tavern market can be described the same way Winston Churchill described democracy: it's the "worst...except for all the others." In city after city, and state after state, bars and taverns are under attack on all sides. Lawmakers pass stronger and stronger smoking bans. Urban renewal planners make fewer and fewer on-premise licenses available. Police and politicians institute ever-tougher DUI enforcement programs. MADD pushes for ever-stricter blood alcohol concentration standards. Traditional venues face growing competition from casino gambling, whether at a racetrack, resort or reservation.

Mom-and-pop bars have it tougher than the major chains, hotels and resorts. The big boys have enough money to win exemptions to unfavorable regulations; mom-and-pop taverns must often fend for themselves. That's how we get such patent inequities as in Nevada, where smoking is legal on the slot machine floors of big casinos but is illegal in smaller places.

The state of the cashbox in the "Great American Tavern" is another mixed picture, and it's no secret why. The Distilled Spirits Council of the U.S. recently noted that this is becoming a rich country where 41% of prime-working-age adults enjoy an annual household income of $75,000, or more. More than 20% earn $100,000 or more annually. Result: traffic is declining in the mom and pops, but rising in branded chains. Americans are drinking less beer and more hard liquor...fewer house brands and more premium brands.

So what's the good news? Neighborhood taverns, which have been called the "workingman's country clubs," remain viable nationwide, and are extremely stable in many markets -- for now. The question is how to keep them viable in the face of these legal, competitive and demographic challenges. Well, we all know the answer: organize, lobby and fight.

This response is not new, but in this issue you'll find fresh evidence of its power. The most dramatic and encouraging example comes from North Dakota, where a close-knit coalition of bar owners and operators won a resounding victory against a proposed smoking ban. Clever and agile operators and bar owners argued that they were pro-smoker, but anti-smoking; pro-health, but anti-regulation; and pro-freedom, but anti-Big Tobacco. The proposed ban went down in flames.

Close cooperation also flourishes between bars and operators from Illinois to Pennsylvania. "Mom-and-pop bars don't have the deep pockets enjoyed by corporate chains, but we can have an impact if we work together with each other and with operators," said Amy Christie, executive director of the Pennsylvania Tavern Association. PTA's lobbyist, John Milliron, is also executive director of the Pennsylvania Amusement and Music Machine Association. You can't get much closer cooperation than that.

More good news is that taverns' interests in amusements and music is as strong or stronger than ever. The American Amusement Machine Association hosted a 10,000-sq.ft. pavilion at the Nightclub & Bar Show in March; exhibitors reported that location interest in coin-op equipment was intense. As patrons drink less and spend less time in bars, locations need more reasons to attract them and more ways for customers to spend money. AAMA walked away with more than 100 leads from the show's heavy traffic flow, and the association will host another pavilion at the next bar show, slated for February 25-27, 2008, in Las Vegas.

It's worth remembering that taverns have existed for 3,000 years and will exist for 3,000 more in one form or another. "While the faces of bars and taverns may have changed with the times, one thing that has not changed in so many places is the warm smile, the comfortable stool, the familiar company and the fulfilling meal and drink," said the executive director of the American Beverage Licensees. He might have added: "...and the jukebox, the pool table, the countertop, the pinball and the dart game." For all their challenges, amusement and music vendors still find bars, and especially nonchain venues, among the most congenial and natural places to do business. That won't soon change, either.