Feb 9 2019
The Vultures Are Circling. Again.
“Just when you thought it was safe…….” Here go the Small Brewers Duty Reform Coagulation. Again.
Forget the ABInbevs, Molson Coors of the world. In a UK context THIS is Big Beer. Big Beer with all of the PR and spin merchants that it can throw money at. All with the aim of increasing market share. In a declining market.
And using their access to the ear of Government to state their “case”.
If I hear the phrase “level playing field” one more ******g time I might just howl.
You have to admire “Big Beer 2019”. With its pretty websites and finely “crafted” phraseology. All with the ultimate aim – openly stated or otherwise – of closing down the competition. The small guys. The Micros that you and I know and love.
In the name of shareholder dividends and balance sheets.
This is about Progressive Beer Duty. And Big Beer UK’s simultaneously shadowy yet naked attempt to grab a bigger piece of the pie. At the expense of – what I regard as – the golden age of choice and beer diversity.
So. Let’s look at the Small Brewers Duty Reform Coalition
You’ve got to admire their transparency….. Oh. Hang on a minute……
When this all kicked off last year, there was a list of breweries that signed up. Very quickly, some of the breweries who signed up – not knowing the full agenda – quickly withdrew. Recognising the effect that “pulling up the ladder” would have on others (including many friends) who were on the rung that THEY were on not too long before.
Then I saw a list. A copy of which is in this post.
Having been privy to the letter at the top from H M Treasury (received by brewers this week), I thought I’d have a look on the SBDRC website, just to see who the members were now. Now that their true colours are revealed.
Nothing.
So. Being a cheeky wee scamp, I followed the trail of breadcrumbs to a contact email address….
As you can imagine, I can count the number of replies on 0 fingers. That’s almost 3 weeks later.
(Just double checked – to avoid embarrassment. Still zero)
Some of their PR /Propaganda is quite shameless and – to put not too fine a point on it – so far from the truth to be actually l… (am I allowed to say “lies”?)
“Its unfair to ALL small brewers…..” (I left the apostrophe out)
EH? WHAT???
SIBA published a study in 2017 (sponsored by them but independently researched and written) by CEBR
I don’t mind saying that this is a right dry bastard of a read. (If you – like me – are an insomniac, type “Small Brewers Duty reform report” into Google, you’ll find it. Sleep well!) But my inner stats geek loved an hour staring at pretty graphs and tables….
In essence, this table demonstrates the cost of making beer relative to the size of brewery. And demonstrates the economies of scale that larger brewers have. That it still costs more – even including the reduced duty rate – for small brewers to produce beer.
But no. Our friends in the “Coalition” won’t, can’t, say that. That would demonstrate a levelling of the playing field. Precisely their argument, but thrown back.
Last year, the “Coalition” were talking about reducing or removing the relief from duty for brewers above 1k hectolitres – a hectolitre being 100 litres. Or 2 1/2 9 gallon casks.
Do the maths with me here.
If an average (let’s say 6 or 7bbl) brewer brewed 3 times a week at full cap. Giving a 4 week break (yes brewers, I know that it’s dreamland in terms of hols, but…) that equates to just over 1612hl. If that brewery brewed 4 x per week that is near 2200hl.
Under those terms, that brewery would be paying 50% more duty on those 1200hl above the original SBDRC level.
Take a 10bbl brewery. 3 brews per week… Christ! That’s 2304hl…..
Now they talk about the differences between 500hl and 5000hl. 500hl!
Let’s be clear. Some breweries that YOU know, will be at THIS moment, clinging on. Getting beer into pubs is NOT easy, especially in a market dominated by big pubcos that demand beer at the lowest possible prices. Prices that “Big Beer” can (and do) supply at. Just look at any Wetherspoons bar….
This relief was introduced by Gordon Brown (as Chancellor) in 2002 in order to provide a boost to growth in the Micro Brewing sector. The stats don’t lie. And we have all seen the explosion in numbers of breweries in the last 6 or 7 years. This growth of numbers would not have been possible without SBDR. I quote the CEBR report again….
But that net growth has slowed massively.
I must confess that I worry about new market entries in brewing. It’s very difficult to make a “splash” in this market. For every standout opening like Pomona Island, there are many who don’t make that reputational impact.
And making a reputational impact is all well and good. You still have to sell beer. And compete at the bar, with those very breweries that are seeking to “do your legs” with their ability to sell beer cheaper into the chains and into wholesalers.
And I’ll never forget looking at a young enthusiastic and ambitious brewer in Manchester a few years back – one that was seeking to expand – and asking “Why would you do this?”
I hated not being more positive. I truly did.
I’m not a writer. “I’ve never took a paper or a learning degree” I’ve got no stake in any brewery, other than emotional. The only self interest I have (if any) is the ability to source fabulous beer from the best available independent breweries in the UK for #ISBF6….. #ISBF7…… But be under no illusion, by their own words (re “mergers and acquisitions….”) the Vultures of “Big Beer UK” are Circling.
If the Vultures of the SBDRC get their way – and the Treasury reduce or remove the level of relief for those breweries below that magic 5000hl – the brewery landscape that YOU now love and treasure, those breweries whose excellence allows me to put on #ISBF, will be picked clean to the bone.
What I, WE, love, this “Golden Age” of beer, is under threat.
Them Damn Vultures. Circling. Again.
Feb 14 2019
The Vultures Are Circling – “The Squeezed Middle”
Jesus Wept.
I thought I’d heard it all. But obviously not. Not yet. Not by a long chalk.
Communication tip. If you want to sound sincere, don’t deploy the “cut & paste email”.
Progressive Beer Duty. Launched by Gordon Brown in 2002 to support Micro Brewers and to give them the financial wherewithal to compete. Big Beer UK hates it. They think they’re “The Squeezed Middle”, between the international behemoths of Heineken, ABInbev, Molson Coors & Diageo.
And the little guys. Making the beer I love.
They are obviously struggling to make ends meet, whilst Micros deliver beer from the boots of Bentleys. You think?
Whilst Micros are working out what this Treasury review of Progressive (remember that word) Beer Duty actually means, Big Beer UK has not been resting on its arse.
Oh no. They’ve been mobilising.
And Micros – be it via SIBA or some other entity or grouping – need to do the same.
Enter the IFBB.
Who???
The Independent Family Brewers of Britain. That’s who. Check that membership list! (click the hyperlink) And they are gunning for Progressive Beer Duty. Alongside the SBDRC and BBPA
BBPA? Who???
The British Beer & Pub Association. AKA Big. Beer. Business. UK. That’s who. Check that membership list! (click the hyperlink)
More then. You may (and I encourage you vigorously to do so) have checked each membership list. It’s certainly worth while. There are certain discrete similarities.
Bollocks. They’re a lift and shift. With exceptions of the multinationals and the Pubcos, they’re virtually identical.
Then, THEN compare with the list from last year for the SBDRC…… Oh, go on. Please. It would be amusing if it wasn’t so sinister.
Noticed any similarities yet?
OK. We’re at base camp now.
So. You have 3 “industry bodies”, jointly and severally lobbying The Treasury, to review / reform Progressive Beer Duty.
In their favour. And their memberships are practically identical.
Collaboration is ace innit!
Now then, where was I? (Even I’M getting muddled here!)
Let’s look at the IFBB in more detail.
Richard Fuller. Secretary of The Independent Family Brewers of Britain.
Hang on. Fuller. As in that brewery that is no longer “Independent”? Hmmm
And…..
Yup. That’s him. A director of a pub and hotel company having sold the brewery business. Acting as the Company Secretary of an organisation representing “family breweries”. I trust he’ll relinquish that role soon.
The company as a whole (Fullers) is doing alright. And was only declaring 8 months ago that they had “solid plans in place” for the brewing business…..
Sounds like a sales prospectus…..
However you cut it, £43M Profit isn’t shabby.
Another member of the IFBB, BBPA & (last I saw) the SBDRC is J W Lees
Later results for 2017 & 2018 dip slightly on profits with the dip between 2017 & 2018 attributable to higher investments expenditure.
If I’ve got the figures wrong, please advise, I’m a bit thick at the moment.
Now. Like a lot of the family brewers, they’ll say – with some justification, no doubt – that a sizeable proportion of this profit is due to the tied and managed estates. Sales, rather than simply brewing. But this is still profit.
The tied estates of the family brewers have been acquired over hundreds of years. The Micros of this current period won’t get the chance to gain ANY tied estates – however small – if these 3 (almost identically comprised) pressure groups get their way.
I could go on. I’m told that I do. But this whole Independent breweries sector feels like “family” to me. These people have helped me through some ******g dark times.
If – in whatever small way – I can have an input into fighting off these vampires (don’t forget that comment on SBDRC website about Mergers & Acquisitions), I could hold my head high.
And – to The Small Brewers Duty Reform Coalition – if you want a proper debate, come out into the light. Where we can see you.
As I’ve said, I’m no writer, this is emotive to me. I give a toss. Others can – and will – put it better, more eloquently. I can’t wait to read them.
And one more question. There are a lot of professional journalists writing about beer, for a living.
Where are their voices on this?
Big beer is mobilising its troops. Little beer (and those of us who care) ought to do the same.
Before it’s too late.
By BeersManchester • Uncategorized • 1