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Budget day impact on beer money

Budget Day usually causes a little angst for the beer industry. Always fearful that the ‘old reliables’ would be hit, brewers and drinkers alike expect bad news. Recent budgets have eased this worry, somewhat. The only tax increase in Budget 2017 involved a pack of cigarettes going up by 50 cent.

Excise on alcohol is too high by European standards. Yet, it remains stagnant. This became a common theme throughout Budget 2017. It acknowledged a lot of problems but did little to solve them. This budget is very much the product of political circumstance than economic necessity.

Token but limited gestures were the order of the day. Minor cuts to the Universal Social Charge will do nothing for consumer spending. Issues around housing affordability and availability in large urban areas will continue to take an ever increasing slice of wages, hitting discretionary spending more and more. A ‘sugar’ tax appears to be on the way but it’s not expected until April 2018 by the earliest. Well, not until Britain introduces one first.

Of course there was acknowledgement by the Minister for Finance, Michael Noonan TD of the “real risk to the economy”, namely Brexit. Government judged it “prudent” to retain 9% VAT rate to continue to attract British visitors. More needs to be done to protect exports in light of this. Irish breweries have been increasing their sales in the UK but the strong Euro will only see prices rise in the British market. Sterling has lost 23% of its value against the Euro since the Brexit vote. The question is will we see more beers from Northern Ireland and across the Irish Sea making a big push here?

Another big disappointment for brewers came in the lack of positive changes for entrepreneurs. Yes, tax equalisation for the self-employed with PAYE workers by 2018 is well on the way with the credit being increased from €550 to €950. In addition, the 20% capital gains tax was reduced to 10% on disposal of assists up to €1m in chargeable gains. This would only come into play if craft brewers wanted to sell up. However, this is nowhere near comparable with the scheme in the UK where it’s ten times the Irish limit.

Talking of UK start-up schemes, Government gave a commitment to introduce a share ownership scheme in the next budget. This had been called for over the past number of years and the lack of progress has been contentious. Employee share ownership schemes have been a feature of brewing in the US, particularly for attracting and retaining staff, especially brewers. There’s a scheme in the UK so why does it take so long to introduce one in Ireland? There are a number of breweries likely to look at this scheme when it commences.

For craft beer, in particular, there was change to the excise duty relief. This had been flagged by Michael Creed TD, Minister for Agriculture, Food and the Marine over the past month. The qualifying limit for excise duty relief was increased by a third to 40,000 hectolitres.

The special relief reducing the standard rate of Alcohol Products Tax by 50% on beers produced in microbreweries which produce not more than 30,000 hectolitres per annum is being extended to apply to microbreweries which produce not more than 40,000 hectolitres per annum – Budget 2017

There are only a few breweries close to the 30,000 hectolitre threshold. You could probably count them on one hand and still have a couple of fingers left over. This increase may be symbolic and tokenistic. It is likely to have little impact on the sector, particularly in the short-term. Yet, it’s the third year in a row that the excise relief scheme has featured in the budget. It is official recognition by Government that the sector is growing and is an important part of our manufacturing base.

It’s not all about tax, however. Government could do much more to support craft beer in Ireland. It could tackle the issue of on/off sales on brewery premises by introducing special tap-room licences. Local authorities could look at removing planning and commercial rates restrictions to encourage manufacturing in their respective areas. They could also develop local food and drink marketing campaigns and festivals. Bord Bia could roll-out a specific craft beer marketing strategy to unlock export markets and identify mechanisms to allow Irish breweries to exploit them. Fáilte Ireland could assist in developing food trails that feature craft beer. These are just some ideas but no doubt there’s countless more out there.

Beer business

The Aldi Irish Craft beer Festival: Winning Over New Craft Beer Consumers

The Aldi Irish Craft beer Festival kicks off on Sunday, 2^nd October featuring 30 beers from across the island. This is the first time that beer has featured exclusively in promotional campaign run by the German discount supermarket chain in Ireland. Newspapers will be carrying the usual Aldi brochure but today’s features a two-page spread on beer.

The Aldi Irish Craft beer Festival line-up. Prices range from €2.49 to €2.99

The beers offer a good introduction to the quality and range of Irish beers being produced today. Prices start at €2.49 per bottle and for this low price you can enjoy the likes of Carrig’s always quaffable Pilsner or its chocolate-laden Coalface IPA. The majority of the beers are on sale for €2.69 per bottle including Mescan’s Westport Blond and Westporter Stout. A few also come in at €2.99 per bottle, including Dungarvan’s Mine Head, the award-winning Francis’ Big Bangin’ IPA and Brehon’s Stony Grey IPA. It’s not all glass by the way. Luminous cans of Rascal’s Wunderbar IPA will be standing out, alongside the brewery’s Big Hop Red.

Supermarkets have tended to include beer as a bolt-on to their wine offers but this is slowly changing. SuperValu, for example, have featured craft beer in both print and broadcast ads. Craft beer sales are up with Aldi alone experiencing double-digit growth in sales over the past year. Indeed, its Irish beer has grown over the years with an accompanying drop in imports stocked, with the exception of the likes of Hobgoblin and the odd German, Belgian or French offering. However, a Marston’s exclusive range for Aldi may start appearing on shelves from November. This will be similar to the tie-up that the brewery-chain does for Tesco.

A snapshot of the beers on offer during the promotion, including Golden Harvest Pale Ale produced by 12 Acres for Aldi

It tends to be overlooked that Aldi has long-been a supporter of Irish craft beer. Its O’Shea’s range produced by Carlow Brewing has won a loyal following with customers. These beers happily sit alongside the O’Hara’s range on the shelves and given people a solid introduction into the world of craft beer. Aldi has followed this up with commissioning Laois’ 12 Acres to produce the fruity-finishing Golden Harvest Pale Ale. It remains to be seen if this will be a once off or will it be an ongoing collaboration.

Some orthodox craft beer snobs might turn their noses up at the thought of the large multiples, believing instead that independent beer should only be sold in independent retailers. This ignores the choice and freedom for the brewers to decide where their beer should be sold, whether on-trade or off-, independent or chain etc. Of course, it’s important that prices remain sustainable and they don’t seriously undercut other retailers.

Supermarkets remain an important sales channel for brewers wanting to reach new customers

Yes, these beers (with the exception of those brewed exclusively for Aldi) can be bought elsewhere. Thinking like that misses the point. The opportunity to access the widest customer-base for their products is nothing to be sneered at. The Aldi promotion will run across all its 126 in Ireland until stocks last. The beers will also feature in its media-buy. For the craft beer sector, a large client such as supermarket chain can buy a certain-degree of confidence with the banks or others in attracting finance, capital and investment. Brewing is hugely capital intensive, with pressures on working capital and the need to expand to satisfy a growing customer base.

Regardless, it’s great to see more attention on the sector.

Beer business

12 Acres, Abbey Stout, Aldi, Aldi Irish Craft beer Festival, Balbec IPA, Big Hop Red, Bo Bristle, Bo Bristle IPA, bo bristle pilsner, Boom, Boom IPA, Born in a Day Pale Ale, Brehon Brewhouse, Bru Brewery, Brú Darkside IPA, Brú Dubh, Carlow Brewing, Carrig, Carrig Pilsner, Coalface Black IPA, Cousin Rosie’s Pale Ale, Dungarvan, Foxes Rock, Foxes Rock India Pale Ale, Foxes Rock Stout, Francis’ Big Bangin’ IPA, Golden Harvest Pale Ale, Helvick Gold Irish Blonde Ale, Hop Adventure Series, JJ’s, Long Arm, McGargles, Mescan, Mine Head American Pale Ale, Notorious Red IPA, O’Hara’s, O’Shea’s, Pokertree Ghrian Golden Ale, Pokertree Ruby Ale, Rascals, s Autumn IPA, s Pale Ale, St. Mel, St. Mel’s, Stone Barrel, Stony Grey IPA, SuperValu, Ulster Black Oatmeal Stout, Westport Blond Beer, Westporter Stout, Wunderbar IPA

Unspeak the truth

Almost 10 years ago, Steven Poole published his book, Unspeak. The subject was the use and abuse of words. People think carefully with their use of words. Hidden meanings and politically-charged meanings can be hidden in the utterances. This can be true for the politician, journalist, PR hack or marketer. Seems obvious, doesn’t it?

What prompted this post was a certain furore over a certain large brewery finally laying claim to trying to pass off some products as local, craft offerings. This is getting attention elsewhere so there’s little new that I can add to this.

What caught my eye, however, was a particular comment used by said breweries PR team. So what somewhat starting statement? It was none other than “low-volume high-quality draught products” being used to describe their small batch trying to be crafty offerings.

If this is how they describe these beers, how then to they describe their mass-market product? Those familiar with the dark arts of Unspeak could read this as as tacit acknowledgement of their big-selling and category leading brands as “high-volume low-quality”.

Accidental and careless, perhaps. Dangerous and charged, indeed.

Brews International

Up for the match: Craft beer on and off the pitch

Guinness announced a few weeks ago that it was extending its current sponsorship of rugby’s Pro12 tournament for a further four years. The company clearly hopes that this new commitment will give it added exposure and convince people to stop referring to the tournament as the Magners League. This is a similar problem to rugby’s European Cup as people long associate it as the Heineken (or simply ‘H in France) Cup. The new Guinness tie-in follows an unsuccessful attempt to become title sponsors of the English Premier League. Carling has made a return as the official beer of type-flight football.

Of course these sponsorship arrangements are important sources of funding of sports. Breweries will try to snap up as many competitions as possible to keep them out of the hands of competitors but also to respond to a more imminent concern – a blanket ban on alcohol sponsorship of sports. It already happens in France for example. Now the Irish Government and others are expected to follow suit. This undoubtedly will cause problems for the likes of the IRFU and GAA.

One of many Dublin GAA themed ads from Five Lamps

In addition to the sponsorship money forked over, sponsors can be typically expected to pay anywhere up to 50% of the amount paid telling consumers that the sponsor said team, league or event. This can range from exclusive bars inside stadia, branding pubs, competitions, TV ads, instore promotions etc. However, they are particularly exposed on their flank to one particular threat – ambush marketing; other companies getting in on the game with little to no money down.

In the run-up to the All Ireland Football Championship, Five Lamps Brewery hosted a couple of GAA-themed events. Other breweries have released sports-themed beer names such as Western Herd’s Danger Here. Rascals Brewing Co.have had a few like Holy Schmidt Pale Ale and 13 Seconds. Such approaches fit in with a sector that sees itself in the midst of a revolution, trying to usurp control from the larger, macro breweries. Attention-seeking from the likes of BrewDog and others is key to a sector that has minimal money to spend on advertising.

Beer names have long been a popular tool to pay tribute to sports but even more importantly, they attract attention in and around major events

Ambush marketing is perhaps a little too harsh a prism to view such actions. It’s not like infamous battles of Coke versus Pepsi or Addidas versus Nike to claim hearts and minds of consumers. Craft breweries are using other tactics to reach out to consumers through sport. Trouble Brewing has hosted craft beer nights in Dalymount Park. Kelly’s Mountain have been involved with their local GAA club.

Craft breweries are approaching sponsorship opportunities strategically. Sweetwater Brewery was launched by Rye River in Ireland the week of Boston College-Georgia Tech American Football game. As if that wasn’t enough, SweetWater was available draught at The Trinity Welcome Village at Trinity College Dublin, the official tailgating venue for the Aer Lingus Classic. Over in the west, Wild Bat brewery has collaborated with Oughterard RFC on a limited edition rugby jersey.

Wild Bat taking it one step further with this limited edition Oughterard RFC jersey

It seems that craft beer is prepared to take on the larger breweries head on in their traditional domain – sponsorship in marketing. However, they’re doing it in their own special way. Sure, what else would we expect from them.

Brews International

Trapped in Tilburg

Twenty-four hours in Tilburg isn’t on many a traveller’s bucket list. The small southern Dutch city does not attract much attention. Only the most ardent football fan would recall that it was in Tilburg on 20 April 1994 that Ireland’s Tommy Coyne scored the solitary goal against Holland. It was a warm-up ahead of USA ’94 and it was highly likely the last time the city was mentioned on Irish TV.

What brought me to Tilburg was an invite to a 25th wedding anniversary party. I had gotten to know Willem through my beer tastings. He was a regular fixture in Probus Wines. A group of us from there travelled over for the laugh. It appears that if you’re having a party, the local butcher throws in the bbq, bar & kegs, gazebos, the lot just for buying the food from him. It’s a good deal, even if the beer choice is limited to Jupiler. We did manage fortunately to try some Dutch beers from the local supermarket earlier that day.

We were keen to have a look around the city the following day. Lonely Planet listed only two sights for the city, a textile museum and a modern art gallery. We were also apparently only 5km away from the ‘Dutch Disneyland’. Talking to locals the night before, it was suggested we take in the highest point in the city, no more than a larger-than-normal hump in the road. If we wanted, we could also visit tallest apartment block in the country. Well it was the tallest until the rival city of Breda built a taller one. This had all the hallmarks of a Springfield-Shelbyville sized rivalry. Willem had other plans. As it was a Sunday, he suggested we take a trip to a nearby monastery in Berkel Enschot.

The Abdij Onze-Lieve-Vrouw van de Koningshoeven is situated on the outskirts of the city in a quiet, wooded area along a canal. This it seemed was the place to be on a Sunday. It’s a popular destination for cyclists and the whole families come trundling along. This particular monastery is better known as the home of La Trappe beers (Koningshoeven in the US) and at one time was the only non-Belgian Trappist brewery. There are now two in the country and others have commenced operations in the US, Austria and Italy.

La Trappe is the black sheep of the Trappist breweries. It lost and subsequently regained the right to use the “Authentic Trappist Product”. In 1999 the monastery sold control of the brewery to industrial powerhouse Bavaria. They took this tough decision because the monastery could no longer support the brewery. We tend to forget that they are religious establishments first and breweries second. Trappist monks are reported to say that they brew to pray, not pray to brew. Thankfully six years later, following a new arrangement where monks would have a greater role in the production process, the brewery was allowed back into the hexagonal club.

This wasn’t the first time that La Trappe had a flirtation with other breweries. They licenced their beer to Stella Artois in the 1970s. At one point, they themselves brewed a wit beer for Chimay. Imagine if that occurred today – a Belgian Wit produced over the border! This would attract scorn, derision and protest, well in the dark web of the beer world at least.

Set in the gardens of the monastery, the brewery bar has the look and feel of an oratory. It’s a modern, simple and modest design. Rather than having an altar, a bar immediately faces the congregation of beer drinkers as they enter. The beer garden is extremely popular, which is hardly surprising given the number of smokers about. Beer and traditional Dutch snacks like Buitterballen were plentiful.

One of the remarkable things about La Trappe beers is their value for money. 750ml bottles of the Blonde and Dubbel can be purchased in Ireland for around €7. Here at the monastery was no different. Cars were pulling up at the shop, complete with monks behind the till, to purchase cases of their favourite local beer. The Wit beer in the local supermarket was 70 cent a bottle.

Unfortunately, my time in Tilburg was coming to an end. I was getting the train back to Brussels National Airport. However, it would’ve been bad to have left here without having tried La Trappe Quadrupel Oak Aged. Batch 19 is the Quadrupel aged in banyuls barrels. I’m generally not a fan of this French fortified wine but could imagine how the sweetness could compliment the rich, dark fruit character of the beer. A bottle and glass were quickly sourced from the kloosterwinkel or brewery shop. This was set to be one indulgent train beer!

The beer poured cloudy with an appearance of mahogany. Strong oak wafted from the bottle once the cork was popped. This aroma was not only immediately apparent to me but also to a fair few fellow passengers. It didn’t help that I was standing between the carriages, trying to pour this beer carefully into a glass.

Once the oak notes had settled down somewhat, the aroma took on a plum, raisin and sherry-like character. This continued into the flavour. This beer was pleasantly smoother and creamier than you might expect. It’s unmistakably a Quad but it has an exceptional complex finish. It’s a blend of desiccated coconut, honey and sherry. All of this is on top of a warming alcohol finish. It was certainly an interesting sipper and helped the journey pass by.

Tilburg was certainly worth the visit. A number of beer bloggers will be touring La Trappe this week as part of the European Beer Bloggers Conference. Unfortunately, I will be unable to make this year’s conference in Amsterdam and excursions. I was registered to attend but other matters have gotten in the way. I’m already looking forward to next year’s event.

Travel