With 2017 almost here the Financial Times (28.12) raises an interesting perspective on beer and brewing.
We are used (not least on this blog) to reading about the activities of multinational brewers ABInBev and of course about craft and microbreweries. The FT piece focuses instead on what it terms the ‘squeezed middle’ brewers between the two. Sometimes family owned the FT cites Black Sheep, Camerons, Thwaites and Moorhouses.
Gordon Brown when Chancellor halved beer duty for breweries that make less than 880,000 pints a year. The FT estimates that the tax advantage saves smaller brewers around 20% in costs. It goes on to quote Ian Parkinson of Moorhouses to the effect that medium sized brewers have neither the efficiencies of scale of giant brewers or the tax break of small ones. Parkinson claims the latter have a 25-30% price advantage and argues it is an ‘unfair playing field’. One wonders how strong an influence the Beerage now has in the Tory Party and if it plans to lobby Hammond for a tax change?.
The FT notes that medium sized breweries do in fact have advantages of scale over smaller one and cites beers produced in association with bands like Iron Maiden, Motorhead and New Order in amounts no micro could envisage. It concludes that even if small brewers have a tax advantage it is an increasingly crowded market where selling the beer that is produced can be an issue.
There may be some interesting pointers here about what will happen in beer in 2017. It is always worth reflecting that things cant always get better even if we hope that is the trend that is apparent.