Thoughts on an Industry in turmoil
As if lockdown wasn’t enough, as if the low rent thundercat that is Tim Martin stealing from .gov to subsidise a pint of Ruddles wasn’t enough, small breweries now have yet another issue to contend with. That of the SBR (Small Brewer’s Relief) review which output some very worrying news last week.
Some 2000 breweries in this country, the absolute heart of the Craft Beer revolution, woke up to the news last week that a committee made up primarily of breweries whom are not affected by the lower limit of beer duty relief being at 5000HL (half a million litres), have lobbied to impact those small breweries nonetheless, cut their duty relief, and in effect – cut the margin all of those small breweries can make by c. 15%. To try their very best to put these brewers out of business.
What really wrankles about this one, is that a lot of the breweries on this list would have been at this size once upon a time, but are now out the other side of it. It’s the equivalent of using an electric bicycle to win a race, and then having them banned because they aren’t fair. It’s basically just horrible business practise.
But what is SBR and why do you care?
As stated by SIBA (https://www.siba.co.uk/the-futue-of-small-breweries-relief/), SBR was introduced in the 1980s because of:
- The poor profitability of small breweries relative to larger breweries which enjoy better economies of scale of production;
- The difficulties faced by small breweries in bringing their goods to market and in competing with larger breweries which could offer bigger discounts to wholesalers; and
- The importance of maintaining diversity within the beer industry and preserving choice for the consumer.
So, what are scale economies? Think macro. Think carling. They buy ingredients in bigger batches, they need less manpower per litre of product due to the vast scale of their kit. They can cut out links in the supply chain and buy from source, they can negotiate incredibly good contracts on ingredients, because (like the Wetherspoons effect) sellers are prepared to cut their own margins for the guarantee of a very large, contractual, consistent order.
“Many large family brewers like Hogsback, Fullers (no longer considered a family brewer), Harveys, Tim Taylor and others, all used SBR to fight the might of the largest Macro producers. They levied SBR to grow, and are now so big, that the rules no longer help them.
So basically, now, f*ck anyone smaller than them, they’ve got what they needed: But they don’t want all the new guys, with beer now being more approachable to get into than ever, with more knowledge, cheaper high quality chinese kit and better education, to follow them. To use the advantages they themselves used, and eventually erode some of their market by doing exactly what they did.
The list of breweries that attacked the lower threshold of SBR is a horrifying tale, basically a list of all the breweries that helped CAMRA save cask beer, and pushed against Macro and it’s fizzy lager. We wouldn’t have craft without them. We owe them a lot. But they’ve gotten confused. They’re attacking the wrong people. They’re fighting the wrong fight. Because it’s easier to use your might to crush from above than it is to group together against those even bigger than you are. But it’s also morally abhorrent.
Replace banker with Macro brewery, worker with family brewer, and immigrant with craft brewery.
THEY TURK UR JERBS!
Again I’ll quote SIBA:
SIBA does not believe there exists an economic, political or moral rationale for withdrawing any relief to any brewer below 5,000hl and we will continue to defend SBR at current levels below 5,000hl. To remove relief for brewers below 5,000hl would result in the closure of many brewing businesses across the UK. This would be unacceptable to both politicians and consumers, and be contrary to the original intention of SBR
How does this affect you, the consumer?
OK. I’ll get to the point. MOST OF US are old enough to remember a time when all you could find on a supermarket shelf was Macro lager, and a couple of very traditional ales. Many of us are also of an age to recall how close we came to losing cask product, and having genuinely nothing but macro keg. Many will recall that in the USA, by 1979 there were just 44 breweries left in the country. There are now over 7500.
Macro producers using government legislation to modify their environment is nothing new, but this is so transparent. So laughable that we MUST vote with our feet.
I am asking you all to NOT buy beers from these family brewers. With Tim Martin lying about the price of ale on the one hand, and legislation that could genuinely put thousands of UK breweries out of business on the other, it’s damned important that the kind of people that read my nonsense MAKE A CLEAR STATEMENT, and support the craft breweries this legislation is designed to damage.
Do so, or you may find that our craft beer revolution is just a flash in the pan, and that a decade from now – our choices are Doombar or Carling. Your choice.
So yeah, buy beer from us, and the breweries we support. Tim Taylor’s Landlord? I’ll miss you, but there’s plenty more good beer available…
We’ve also joined the CAMPAIGN FOR PUBS this month.
This campaign looks to focus on the singular goal of protecting breweries, and the establishments that buy beer from them. They’ve done fantastic work explaining the reality of the Wetherspoon’s press, have fought incredibly hard on the #NoPubNoRent initiative to protect landlord during lockdown, and how now taken up the mantle of organising a collective response to SBR.
At time of writing over 300 small breweries have signed their letter to parliament, and if protecting microbreweries and the pubs that stock their beer interests you – we recommend you check them out.