Category Archives: Beer news

Is Ireland ready for a 12-handpump Wetherspoon’s?

The two Irish beer fans lowered their voices and spoke almost in awe. They had been looking through the windows of the new JD Wetherspoon pub in the upmarket Dublin suburb of Blackrock, due to open its doors for the first time this Tuesday. “It’s got TWELVE handpumps!”, they said. That is twice as many as any pub in the Irish Republic has ever had before – and even that pub only had four handpumps actually working at any one time. Indeed, according to one (unverified) estimate, the 12 handpumps at the new ‘Spoons, the company’s first in the Republic, will boost the total number of working handpumps in the entire country by 33 per cent.

Is Ireland ready for a 12-handpump ‘Spoons? I was last in Dublin all of eight years ago, when the beer scene was still pretty dire. Since then, the country has seen a London-like explosion in the number of craft beer breweries, from a small handful to around 40 (indeed, one of the newest – N17 – actually sounds as if it ought to be in London, though it’s named after the road that runs from Galway to Sligo, and the brewery is in Tuam, rather than Tottenham).

Brew Dock Amiens Street Dublin
The bar-top line-up of craft beers at the Brew Dock in Dublin

Accompanying that has been a boom in the availability of craft beer: yes, Guinness, Budweiser and Smithwick’s are still ubiquitous, but if you’ve got the excellent Beoirfinder app, you’ve got a good chance of tracking a pub or bar with at least something more interesting on tap. And there are now bars, such as Brew Dock in Amiens Street, Dublin, near Connolly station, where the bar top has more than 20 craft keg taps, selling beers from the United States and Britain as well as Ireland.

If you can discover a working handpump anywhere, though, it’s likely to be just the one, and you could find, as I did in the Alfie Byrne bar in Dublin last Sunday, that the beer on the one handpump is almost irritatingly familiar – in this case Fuller’s London Pride. I can drink that 10 minutes’ walk from my house. Ironically, many great old Irish pubs still have a row of “policeman’s truncheon”-style handpump handles on the bartop, but they’ve not been used for 50 years. As soon as Guinness perfected the nitro-serve for draught stout, in the early 1960s, keg beer immediately replaced cask from Bantry Bay to the Derry quay, and from Galway to Dublin Town. (It was that dire situation, of course, that helped inspire them four fellas on holiday in the Republic in 1971 to form the Campaign for the Revitalisation of Ale.) Continue reading Is Ireland ready for a 12-handpump Wetherspoon’s?

PBD, the issue that splits British brewing

A model of a brewery constructed on a half of a barley seed made by Ukrainian miniaturist Nikolai Syadristy
Now THAT’S a microbrewery: a model of a brewery constructed on half of a barley seed, made by Ukrainian miniaturist Nikolai Syadristy

If you want to start a punch-up, gather together some brewers from small operations, producing less than 5,000 barrels a year, add some brewers from larger concerns, producing 60,000 barrels or more, clamp a steel helmet on your head and then ask them to discuss Progressive Beer Duty. Never mind about discussions over the exact definition of “craft beer”, or whether keg beer is a valid choice for an artisanal brewer, PBD is the issue that splits the British brewing industry. Smaller brewers eligible for the tax cuts that PBD gives them, which can be equal to as much as 24p a pint, insist these are essential to help them compete with larger firms, and that as a result the choice to the British beer drinker has been greatly widened since its introduction. Larger brewers insist that PBD distorts the market, and that it unfairly hampers them in competing for business from the pub companies, because the pubcos, naturally enough, go to where they can buy beer cheapest, which means from those brewers being taxed 24p a pint less.

After a couple of news stories last week featuring two brewers, Arran Brewery and Black Sheep, who talked about the adverse impact PBD had on their own businesses, I wrote a comment piece for the day job about the inevitable distortions PBD causes in the marketplace. All taxes cause distortions: that’s just how economics works, and tweaking or adjusting taxes so that some sections are treated more lightly than others creates more distortions. You may feel the distortions that PBD creates are worthwhile because of the boost it seems to give to very small brewers, or you may feel that PBD is unfair and needs either serious tweaking or scrapping. Views seem to pretty much fall either way depending on whether the person expressing an opinion is a large brewer or a small one.

After my opinion piece came out, there was a minor twitterstorm, with small brewers totally denying Paul Theakston of Black Sheep’s thesis that pubcos were turning to smaller, PBD-entitled breweries to, effectively, snaffle that 24p-a-pint tax rebate for themselves. I had the commercial buyer of one medium-sized pubco, with more than 1,000 pubs, contact me specifically to deny that his beer-buying was influenced by whether or not the brewer he was buying from was entitled to PBD and could therefore afford to sell to him more cheaply. I had one small brewer demand: “Is there really a significant volume of market-distortingly cheap beer coming from small brewers?” Well, Black Sheep lost 6,000 barrels of pubco beer sales in the last financial year, and Paul Theakston appears to blame PBD allowing smaller rivals to sell cheaper beer. Another small brewer declared that PBD “helps a less efficient brewery compete, which is the idea.” But I don’t think I’m alone in believing that business shouldn’t be a handicap race, with the best being forced to carry a greater burden so that those not so good can have a chance of crossing the finishing line first.

Anyway, here’s the original opinion piece in full: I look forward to reading everybody’s comments!

The unintended consequences of Progressive Beer Duty

It’s a bitter irony that Black Sheep Brewery, one of the most successful of the “new” small breweries, now finds itself badly hit by a tax regime specifically fought for, and brought in, to encourage new small breweries. The problem is that Black Sheep, which brews excellent beers at its home in a converted maltings in Masham, North Yorkshire, is, after 21 years, no longer small – or, at least, no longer small enough to qualify for Progressive Beer Duty.

PBD, brought in by Gordon Brown when he was Chancellor of the Exchequer in 2002, means any brewer making, currently, no more than 5,000 hectolitres of beer a year (a little over 3,000 barrels in old money) pays only half the normal excise duty, which, after VAT is taken into account, means an effective subsidy of 24p a pint. It gets complicated after that, as the tax relief slowly falls off with rises in production, but eventually full excise duty is payable on every pint once a brewer’s production goes over 60,000 hectolitres. The idea, as put forward by SIBA, the small brewers’ association (which had been campaigning for PBD since 1989) and the Campaign for Real Ale, was to enable small brewers to compete better, by removing some of the cost burden on them, and thus to encourage new entrants into the market and, as a result, improve consumer choice.

There is no doubt that new entrants have hit the market in a mighty tsunami: the number of breweries in the UK has boomed from around 450 in 2002 to some 1,150 today, a 155% increase. Gordon Brown has certainly had a lot to do with that explosion of new small breweries. But almost all those new entrants are competing in a minority segment of the British beer market, cask ale, and while cask ale may not be declining as fast as the overall UK beer market, it’s certainly not expanding. Those brewers under the PBD ceiling are, effectively able to sell their beer in a tight market up to 24p a pint cheaper than a brewer like Black Sheep, which finds itself having to pay full tax because it has been successful enough that it makes more than 60,000 hectolitres of beer a year. (It is not just Black Sheep that suffers from what many regard as an unfairly tilted playing field in this way, of course: so do almost all the old-established family brewers, from Fuller Smith & Turner to Adnam’s to Robinson’s.) The wholesale purchasers of beer (that is, the pubcos, mostly), naturally enough, go to where they can get it cheapest, and that is from those brewers who brew 60,000 hectolitres or less.

As a result, Black Sheep has found itself squeezed out, losing 6,000 barrels of pubco business in the 12 months to 31 March this year, and turning from profits of more than half a million pounds in 2011/12 to a loss of almost three quarters of a million pounds in 2012/13. Black Sheep’s founder, Paul Theakston, said: “Our Achilles heel has always been in our cask beer sales to the national pub companies, where … a policy of buying an increasing proportion of their cask beers from microbrewers, thus taking advantage of a significantly reduced buying-in cost through Progressive Beer Duty, has been the order of the day.”

What is happening, of course, is that the cost savings from PBD, instead of going to the small brewers, are going to the big pub companies, who can use the existence of a large number of alternative suppliers versus a comparatively small number of buyers (a condition known to economists as monopsony) to beat down the price of the beer they buy and pocket themselves a considerable slice of the 24p saved through PBD. This should not be a surprise to anybody. Indeed, it was specifically predicted in 2001, before Chancellor Gordon Brown even introduced PBD, in an article in the Journal of Small Business and Enterprise Development by three economists, Geoff Pugh, David Tyrrall and John Wyld, called “Will Progressive Beer Duty Really Help UK Small Breweries?”

It’s a firm rule in journalism that the answer to any headline with a question mark at the end of it is always “No”. That normally only applies to such tabloid-style headlines as “Did the SAS kill Diana?” and “Will your pet give you cancer?” But the answer to the question Pugh, Wyld and Tyrrall posed seems to be pretty much in the negative, too. After a great deal of economists’ algebra, they concluded that, in the short term, “The overall effect of PBD will increase the profits of individual breweries, increase distributors’ profit and increase the quantity sold on the final market [because of a lower price].” However, “Over time increased profit for small breweries will attract new entrants … for the distributor, the ability to spread or reassign orders among an increased number of suppliers enables the price to be renegotiated downwards … the distributor is able to transfer increased profits from small brewers to itself.”

In other words, PBD gives you lots of breweries all right, but all that does is increase competition, squeeze profits in the brewery sector back down to where they were before PBD came along, and boost profits for the pubcos. That’s great if you’re a pubco, but it’s pretty tough if you’re Black Sheep, because you are suffering all the pricing pressures PBD allows pub companies to put on brewers, without being able to take advantage of PBD yourself. It also discourages those really small brewers who find themselves becoming successful from growing too much: earlier this week Gerald Michaluk, the MD of the Arran brewery in Scotland, which produces that country’s best-selling bottled craft ale, admitted he was delaying expansion deliberately to try to stay below the PBD threshold: “We have modestly grown the business because of our not wishing to exceed the half-duty production threshold without first upgrading our brewery on Arran to make the savings necessary to be able to afford to pay the extra 24p per bottle in tax that an increase in production would bring.” Any tax regime that inhibits growth and investment is a bad tax regime.

Black Sheep’s answer to the problem of competition from those with a better tax deal is to shift over, in part, to a sector where very few of those 700 new small brewers since 2002 will compete – keg beer. Announcing the move, Robert Theakston, Black Sheep’s MD, said: “I am aware of the preconceptions surrounding keg, but the opportunity the keg market brings is not to be dismissed. It will allow us to reach into the types of venues that can’t justify cask beer. There are an awful lot of sports clubs, hotels and restaurants than can only take keg beer that we currently can’t trade in.” This cannot be the result Camra would have wished for when it campaigned alongside SIBA for Progressive Beer Duty: one of the best-known (and best) new cask ale brewers being forced into making keg beer because PBD has brought so much competition into the cask market.

The Bass red triangle: things AB-InBev won’t tell you

Bass pale ale labelThere are stupid marketeers, and there’s AB-InBev. The Belgo-Brazilians have decided to rename one of the oldest beer brands in Britain, Bass pale ale, a literally iconic IPA, as “Bass Trademark Number One”. It’s a move so clueless, so lacking in understanding of how beer drinkers relate to the beers they drink, I have no doubt it will be held up to MBA students in five years’ time as a classic example of How To Royally Screw Up Your Brand.

The move is predicated upon the red triangle that is found on every bottle of Bass pale ale, and on every pumpclip of the draught version, being the first registered trademark in Britain. The generally accepted story is that after the passing of the Trade Mark Registration Act of 1875, when applications to apply for trademark registration opened on January 1, 1876, a Bass employee was sent to wait overnight outside the registrar’s office the day before in order to be the first in line to file to register a trademark the next morning, and that is why the company has trade mark number one. There is no evidence for this story: but it is certainly true that a label with the triangle on it, and the words “Bass & Co’s Pale Ale” is indeed the UK’s Trade Mark 1, having been the first to be registered on New Year’s Day 1876.

So why now rename a beer that has been around since the 1820s, when Bass first started brewing a bitter pale ale for the Far East market, after an event that happened when that beer was already 50 or more years old? Because AB-InBev is flailing around for a way to rescue the beer, once the most famous in the world, from the miserable position it has been in since, to be honest, long before what was then Interbrew acquired the Bass brands in 2000. Some idiot marketing focus group got together and tried to think of a unique selling point for the beer: and the only one they could come up with was that it bore the UK’s first registered trade mark.

As Pete Brown has already remarked, this is pretty much a result of the AB-InBev mindset, which knows far more about trademarks than it does about beer. Bass pale ale is a beer with a fantastic heritage: it was, for more than a century, a hugely highly regarded brew, globally as well as in the UK (my grandfather told me that before the First World War, he and his pals would scour North London looking for pubs that sold draught Bass), so much so that it suffered more than anyone else from lesser brews being passed off as the red triangle beer. That was one reason why Bass was so keen to register its own trademark as speedily as possible.

Before we continue, here’s a panegyric on Bass from a book published in 1884 called Fortunes Made In Business which will show you how much Bass was an icon:

Continue reading The Bass red triangle: things AB-InBev won’t tell you

Revival of ancient barley variety thrills fans of old beer styles

Chevallier b arley
Chevallier barley, revived after seven decades

In a move that has thrilled beer style revivalists, a beer has been brewed from what was Victorian Britain’s most popular barley variety for the first time in at least 70 years.

What is most interesting for historians of brewing is the way the revived malt acts when used to make beer, putting a new slant on the interpretation of old beer recipes, suggesting they produced beers using the ingredients available at the time that were both fuller in the mouth and less bitter than the same recipes using modern malts, and also beers that needed longer to mature than those made using modern malts do.

The new-old beer, a nut-brown bitter ale made using Chevallier barley, which once went into the vast majority of pints sold in Britain, will be on sale at the Duke of Wellington pub on Waterloo Road, Norwich this coming weekend in time for Camra’s annual members’ meeting in the city. But hurry: there’s only one firkin available.

Chevallier barley was revived by Dr Chris Ridout of the John Innes Centre in Norwich, an independent grant-aided plant and microbiology research centre, which hold seeds from 10,000 varieties of barley at its genetic resources unit.

Dr Chris Ridout growing Chevallier barley at the John Innes Centre
Dr Chris Ridout growing Chevalier barley at the John Innes Centre

The reason for reviving Chevallier was to look again at its malting quality and yields, both of which were good enough to see the variety dominate British barley growing and spread around the world. Dr Ridout and his team have now discovered that Chevallier also has resistance to Fusarium ear blight, which, if it can be cross-bred into other varieties, could be very valuable in the fight against a fungal disease that can devastate grain crops.

Continue reading Revival of ancient barley variety thrills fans of old beer styles

Wells gets Younger – which isn’t as old as claimed

Excellent news, I think, that Wells & Young’s has acquired the Scottish brands McEwan’s and Younger’s from their current owner, Heineken.

The announcement last week that W&Y was bringing back Courage Imperial Russian Stout genuinely excited me, and not just because it’s a fantastic beer. It showed that the Bedford company has a shrewd understanding of the sort of niche a medium-sized brewer can exploit with the right brands, and it has cottoned on to the growing desire of drinkers in the UK, the US and elsewhere to drink authentic, heritage beers again. McEwan’s and Younger’s have plenty of heritage – Younger’s No 3, for example.

But I’d like to make it clear, now, that if I notice ANY references by the brand’s new owners to Younger’s being “established in 1749”, I shall be driving up to Bedford and administering a few slaps. Because it wasn’t. This claim of a 1749 foundation date has been around since at least 1861, making it 150 years old, or more, and it still regularly pops up. Only yesterday the Scotsman newspaper printed this rubbish

“William Younger founded Edinburgh’s historic brewing industry when he set up his firm in Leith in 1749.”

There are two big errors in that one sentence: Edinburgh’s brewing industry is, of course, far older than 1749: the city was stuffed with breweries long before, so much that its nickname, “Auld Reekie” (“Old Smoky”), is sometimes said to have come from all the smoke that came out of the brewery chimneys. In addition, William Younger never started a brewery in Leith, in 1749 or any other year. In fact he was almost certainly never a brewer at all.

Continue reading Wells gets Younger – which isn’t as old as claimed

What it means now it’s Miller Time at Meantime

Alastair Hook, left, and Nick Miller

The news that Meantime Brewing Company has appointed Nick Miller, former managing director at SAB Miller UK’s operating company, Miller Brands, as its new chief executive is the most significant event in the UK brewing industry this year.

(Incidentally, I love the iconography of the photo of Nick and Alastair Hook, Meantime’s founder and brewmaster: “We’re not suits, but we’re still serious working dudes who love beer …”)

Don’t, please, lazily assume this means SAB Miller will be acquiring Meantime, the way Molson Coors bought Sharp’s back in February. Meantime is a company with ambitions: it has already announced that it wants to increase production fourfold at its new brewery in Greenwich, south-east London from 25,000 hectolitres a year to 100,000hl in the next five years – that’s a little over 60,000 barrels a year, UK, for the non-metric, about as much as a medium-sized family brewer such as Hall and Woodhouse produces.

If you brew it, they won’t necessarily come, though: hence the appointment of Mr Miller. He is, as far as I can find out, the first real sales and marketing heavyweight ever to join a UK craft brewer. He had 20 years of experience in sales, strategic projects and marketing with Coors UK (formerly Bass), where he was director of sales, before he joined Miller Brands as sales director in 2005. His new employer boasted then that Miller had “a history of consistently delivering improved customer relations, sales and profit”, and he rose to be MD at Miller Brands in 2008.

He certainly seems to know how to sell beer, even in a recession. For example, Miller Brands saw UK sales of Peroni rise 29 per cent in the 12 months to the end of April, 2010. And if you think: “Peroni – pfff”, you’ll probably be surprised to learn that UK sales of the Italian lager are equal to more than 300,000 barrels a year, about as much as Fuller, Smith & Turner’s entire output. It’s the number one “world beer” brand in the UK on-trade and number two in the off-trade.

Continue reading What it means now it’s Miller Time at Meantime