Prices Peek-ed

The college bars have been a hot conversation topic lately due to the increase in prices of beers and rumours over their future existence. We have 9 bars, and until relatively recently they were the hive activity with prices cheaper or at least competitive with town. However over the last few years this seems to have greatly changed, with some of the bars becoming almost empty and students taking their custom into the city centre where it is cheaper to have a night out (bus fair included). Lancaster University is part of the NUSSL deal (as is many other universities) which, by its own admission, ‘Create, develop and sustain competitive advantages for member Students’ Unions – reducing costs and maximising commercial revenues’. At present the NUSSL deal is made with Scottish and Newcastle who have taken over from Coors this Easter gone. Naturally bars have to make a profit, and the average (which includes normal high street pubs, clubs and university bars) is between 40 and 60 percent. However (another word) unlike other bars it seems that here we have broken the national norm unless you are a London nightclub such as ‘String fellows’, having a 65% profit margin, though David Peaks who is Commercial Director for Conferences and Catering and his colleague in crime Ted Gaskill who is ‘adviser’ to bars looking for a 70 percent profit, i.e. normal pint of beer might cost you an eventual £2.70. To quote someone who works behind one of the college bars:

‘The bars are set up to fail’…‘the 65% desired gross profit is an unachievable amount ‘.

Our source, who wishes to remain anonymous, claimed that David Peaks, who had set the 65% target, wanted the bars to fail, so they could take them over on the pretence that they would do a better job than the current licensees. (He has made this clear to others on numerous occasions) ‘The Bars make money, Catering don’t. They have lost the Fresher’s Ball and Graduation Ball; they need the bars to break even’. We are in no position to say whether this is indeed the case but by looking at Mr Peaks own figures this could be a logical deduction. Mr Peaks new target for bar sales is a 70% gross profit margin on drink sales and 23% on food sales to fit in with his ‘industry standard’. However, I would question his reasoning behind the industry standard of only 23% profit on food. From my experience I would suggest that pubs put a higher mark-up on food than they do on drinks. Could it be that the target for his department is so low in an attempt to make his department look successful and the bars failing?

Our sources went on to say that had Mr Peaks done his research he would have realised that his target is unreasonable taken the products they were trying to sell and the industry standard in this area. ‘Real Ale is a high waste product. Although profit can be made, 65% profit is unachievable. No pub in the town centre achieves this amount of profit, why should we?’ Having gone around the local pubs in town taking a broad cross section we found that none reached a 65%, with more often than not achieving no more than 55%.

With the recent decision to cancel the a long established university event: the Grad Bar Beer Festival, due to the inability to reach the target set, what can we see in the future from the on-campus bars? With the priority being lots of money over lots of sales it would seem logical that it is all downhill from here. One would assume that Furness Beer Festival will follow Graduate out of the door leaving Campus with no Real Ale events at all. Are we to see Catering succeed in their quest to take control of the bars and run them in the same style as their other establishments – i.e. at a loss. With a member of the Catering staff already the license holder for Lonsdale and Pendle bars, is this a matter of two down seven to go? Will Mr Peaks achieve his goal of closing six of the on campus bars? The college bars are key to life at Lancaster University; they are the social centres that make the collegiate system add something special to the Lancaster experience. I am sure we all remember the uproar that was caused when Pendle Bar, ‘the flagship of failing bars’ was put under threat; it now appears that this was merely the tip of the iceberg. We must also ask the question of what kind of bars would Mr Peak run? We only have to look at the catering establishment to get a rough idea, i.e., lack of possible quality and good service. Talking to one former Venue employee, they stated that the establishment had always asked for decent coffee and other beverage supplies but got it seemed the most basic and cheapest, though with the price you would never have believed so. Similarly as we have seen with the bars, Mr Peaks is not known for his communication and accountability skills or his grass-roots knowledge of the industry as this particular sources describes: “I recall when the manager was away on holiday, and Peaks just came down and totally altered the layout behind the bar, with the large soup bowl moved to right next the counter, making it a public health hazard. Apart from totally not consulting the boss, my estimation of his catering knowledge, was like putting a chimpanzee in charge of number 9 bus, i.e. its going to bloody well crash!!’


Which such management tom-foolery, misinformation and secret agendas, then it is surprising that Mr Peaks has lasted nearly 8 or 9 years, and no one has exposed these antics properly before. What is more worrying is that a man earning £60,000 a year is not just taking the university down the swany and possibly lining his own pocket on the bonuses he makes, but that he has seem to have sweat talked the Vice Chancellor into accepting his advice.

To put some meat on this story, then we decided to investigate a little more. Mr Peaks talks a lot about the ‘industry standard’ when he is talking about how much to charge in the bars so we carried out some research into other Universities which are part of the NUSSL deal and the price and profit margins for bars in Lancaster. St Martins College in Lancaster sells a pint of Tetley’s at £1.60 as opposed to our £1.90, a mark up of only 61.8%. Taken into account the average cost of a pint of ale in a normal town pub in this area is £2.30, St Martins seem to be benefiting from the NUSSL deal as there drinks are cheaper on campus. We also looked at the price of Tetley’s at Durham University, which also has a collegiate set up so is a fair comparison for our University. To our amazement, the charge for a pint of Tetley’s was a mere £1.45. A mark up of only 57.9% and a full one pound cheaper than the drinks in the city centre. Both these Universities are benefiting from the NUSSL deal as they are able to compete with the bars in their respective town centres. Why is it that we are expected to pay more than the students of these Universities for the same product? And why is it that someone with Mr Peaks business background can not see that such a high mark up is defeating the point of the NUSSL deal?


To sum up, someone (i.e. this University) is being taken for a fool, the staff see it, the students see it, the principles are aware of it, it seems that those who employ Mr Peaks and are maintaining the 65% are still blind to it. As one student commented ‘I would not trust Peaks or that other one who does university hostilities (hospitality) with him [Ted Gaskil] to run a bath/raffle (other simple task requiring low levels of judgement).’ It would seem an undesirable future, yet one we are moving towards with great speed.

I would like to point out that Mr Peaks was contacted on a number of occasions on this issue to ask his opinion on the bars situation and he felt that, and I quote, ‘it is inappropriate for me to comment’. May his silence on the issue say more than words could ever do.