Competition no bar to success for big pubs

From left: Ben Elias, Catherine Harris and John Singleton at the opening of The Workers in Balmain this week. Photo: Tamara Dean

The co-owner of a new 350-capacity bar in Sydney’s inner west says the small bars proliferating nearby might be competitors on one level, but they also act to improve his margins.

The Workers opened in Balmain this week (the name is a nod to the Australian Labor Party which was formed on the site in 1891) but it is not the first watering hole to set up in the suburb lately. At least two bars, the Cottage and Cantina, have opened nearby under NSW small bar laws that slash red tape and application fees for taverns accommodating 120 patrons or less.

Rod Kelly, however, co-founder of the Riversdale Group which owns the Workers and seven other hotels in Sydney, says small bars improve the drinking culture of a suburb and lift the entire liquor industry.

“I love having small bars nearby,” he says. “They educate people about a better quality experience.

“If we were trying to replace a $5 vodka with a Ketel One [vodka] or whatever, and doing it in isolation, we might get pushback. But people who’ve also been to the small bar up the road are likely to embrace it.”

Buying pubs in the “best location in the best suburbs” is the strategy of the Riversdale Group, which also counts ad man John Singleton, Tourism Australia chair Geoff Dixon, investment banker Mark Carnegie and Mojo ad agency founder Allan Johnston among its partners.

The dress circle locations, such those of the Toxteth Hotel on Glebe Point Road and the Marlborough on King Street, Newtown, lend themselves to having small bars already competing nearby. The fact that Riversdale specialises in buying pubs that have been struggling financially after being overcapitalised before the global financial crisis, makes competition doubly likely.

However, Kelly’s positive attitude toward small bars taking their share of the drinking dollar reflects Riversdale’s departure from the pub landlord norm on several fronts. It operates the pubs that it owns, it has introduced live music to several (including the Workers) at a time where many Sydney gig venues are being shuttered and it won’t allow pokie revenue to exceed one-third of its total income.

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