Pulling pints on-line

Leisure procurement is worth £100 billion a year across Europe, but the market is fragmented among thousands of small suppliers and buyers. This makes it fertile territory for web-based virtual markets which are already transforming the face of other industries, such as cars.

At least two British-based sites are due to launch in the next few months. At one end of the scale is pubowner.com, an independent site set up by a former Bass and Punch Taverns man Andrew Younger, aimed at supplying the needs of the 42,000 tenanted pubs in Britain that are not managed by big breweries.

At the other end, a group of five rivals, Accor, Bass, Granada Compass, Hilton and Whitbread, have put aside their differences in order to work together to reap the benefits from a web-based exchange for buyers and suppliers.

Unlike the high-profile consumer websites, there are no well-connected Martha Lane Foxes or Toby Rowlands in the B2B worlds plugging their offerings.

First, B2B does not need a public profile. Second, the kind of industries that have pioneered virtual marketplaces are not particularly sexy to the general population - motor component and construction, for example. But despite the lack of headline appeal, B2B is clearly going to be the backbone of the internet revolution.

Merrill Lynch estimates that anywhere from 10% to 40% of business procurement will be conducted through online market-makers by 2005. "In terms of volumes of trade it will dwarf e-commerce," says Merrill's internet analyst, Peter Bradshaw. "The kind of sectors it will work best in are the very large, but very fragmented industries."

Pubs are a perfect example. Although it may seem that every pub in the land has been swallowed up by chains, many are still independently managed and form a sizeable chunk of the £9 billion procurement market.

Says Younger: "Lessees and tenants are tied for certain products such as beer but there is a whole area of goods from food to soft drinks, lightbulbs and insurance where they are on their own and aren't necessarily getting good deals."

He also plans to list all the available vacant pubs and tenant leases. Empty pubs are a constant problem for big pub groups such as Inntrepeneur, Enterprise and Punch, which spend thousands of pounds each year trying to find suitable tenants through advertising and roadshows. "Around 25% of leased pubs change tenants each year and around one in 10 are empty at any one time," he says.

Revenues will come from transactional fees paid by suppliers and advertising fees paid by pub groups. "We won't make money out of publicans," says Younger, who claims to have had an enthusiastic response from both suppliers and pub groups with whom he is currently formalising arrangements.