Turning us into a nation of beer sellers

The Government is stepping up its support for craft beer these days. On the back of the 50% increase in the excise rebate ceiling for brewers in Budget 2015, state agencies are looking to craft beer and cider to join the “usuals” food and whiskey to help sell Ireland. Earlier this year we had six breweries participating in Bord Bia’s Marketplace International 2015. Then in July, Tourism Ireland supported the participation of nine breweries and one cider maker in Toronto’s Festival of Beer. This week saw another high profile event where craft beer was showcased.

Blending beer, cider, music & food to sell Ireland
Blending beer, cider, music & food to sell Ireland

Sixteen Irish food producers were given the opportunity by Bord Bia to exhibit at the Speciality & Fine Food Fair in London. The event takes place in Olympia, well known in beer circles as the home of the Great British Beer Festival. In the weeks leading up to the fair, Ireland’s food marketing agency put in plenty of legwork drumming up interest amongst leading food and drink buyers from the speciality food industry.

Galway Hooker was the sole brewery representing Ireland and was given prominent space amongst the Irish exhibitors. From the looks of it there doesn’t seem to have been a lot beer at the fair – Crazy Mountain Brewery from Colorado; Delicias de Burgos and Pasion de Duero, S.L. from Spain; and a Scottish honey beer from Plan Bee. The lack of beer could be a sign that the work of winning over space on dining tables from wine is painstakingly slow. Regardless, the fair was a real opportunity for the Galway lads. Their beers are great for pairing with food. They’re not overpowering and are well-balanced. You only have to look at their eponymous pale ale and how versatile it can be thanks to its distinctive malt base. I can only hope that for Aidan and Ronan, the brewery’s first appearance at the fair proves to be a success in the long-term.

Can more be expected? We can only hope so. Food Wise 2025, the new national food strategy, has identified the need to develop a specific strategy to help craft breweries to go and views exports as key. Marketing support and attendance at international food events is a start but more can be done. We need to examine new ways of helping breweries to get products to foreign markets. Could brewers pool together to share space in containers? Are KeyKegs the best way of exporting draught or are there other ways that could be considered? Should canning be the choice for exporting packaged beers because they save on weight, more reliable for shipping and can more compact (i.e. more beer per pallet)? Given the desire of our enterprise agencies to prioritise exporting companies, they should examine areas like these and more in order to help Irish craft breweries grow.

What the European Central Bank has done to beer

In order to boost the Eurozone economy, the European Central Bank finally announced its plan for quantitative easing (QE), much to the chagrin of the Germans. Between now and September 2016, the ECB is to print some €1.14 trillion in new money to buy government bonds from banks and other investors. So what has all of this to got to do with beer?

Well quite a lot actually, the value of the Euro against other currencies has taken a significant dive over recent weeks and is expected to remain weak during the course of the QE initiative. This will make exports from Ireland cheaper. There’s a real advantage for Irish breweries (and indeed those from other Eurozone countries) to export to the likes of the UK and the US at seriously competitive prices. The likes of O’Hara’s, the Porterhouse and recent exporters to the US like White Hag and Rye River could really extend their reach in the US. But our near neighbours in Britain will also be a market that Irish breweries can be competitive in terms of price to match the flavour. We just have to ensure that craft breweries get the support they need through access to credit and support from enterprise agencies to take advantage of this.

German Chancellor Angela Merkel not happy with the ECB and taking the glass-half-full approach Photo: REUTERS/Fabrizio Bensch
German Chancellor Angela Merkel not happy with the ECB and taking the glass-half-full approach Photo: REUTERS/Fabrizio Bensch

It’s not all sunshine and roses though. Ignore that fact that Britain, the US and non-Eurozone countries will be now more expensive for beer trips. Imports from these countries will also become pricier. This is also potentially bad news for those that like beers from Northern Ireland. It’ll be hard for the brewers to absorb the exchange rate differences so they’re not passed on to customers. Will they forget exporting to the rest of the island in favour of focusing on Ulster and Britain?

Separate to the import and export of beer, are there any other things we should be aware of that could affect the price of beer and the craft brewing industry generally? Well the cost of imported raw materials will increase. Ireland is a small market and generally sources a lot of raw materials through the larger suppliers in the UK and elsewhere. However, this could be a further fillip to the indigenous grain industry. On the other hand, fans of West Coast or other US hops could be in for a shock as some are expecting the dollar to reach parity with the Euro in a few short months. Will brewers absorb these increases into existing prices or will we even see changes to offerings in the form of producing more European-style offerings using German hops for instance?

Only time will tell what the effects of Mario Draghi’s efforts will be. One thing for sure is that it will give a boost to Ireland and other Eurozone economies. This will boost consumer demand at home and no doubt help the further growth of the craft beer sector.