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22-01-2017, 14:29
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I've oft raised concerns regarding SIBA (http://siba.co.uk/), the trade organisation of independent brewers. Over the past two years or so I have moved towards a position of working closely inside SIBA to achieve change through engagement rather than shouting from the sidelines. Arguably this is a more responsible and constructive activity1.


I am a member of the Policy Committee, which is currently looking at various issue that are becoming more public, notably progressive beer duty(PBD)2, and access to market3. These two issues are extricably linked in many ways.

SIBA originally started out life as the Small Independent Brewers' Association. It was decided some time ago to change the name to Society of Independent Brewers, but for the sake of simplicity retain the original acronym. One can have a view on the appropriateness of the change, and the subsequent closer working relationship with the likes of BBPA, regional brewers and even major multinationals.

Things are coming a little bit to a head. There is the recent formation of a coalition of brewers named "Small Brewers Duty Reform Coalition" (SBDRC) who are now looking to change the duty scheme to favour what is called "The Squeezed Middle". See the details here (http://cask-marque.co.uk/cask-matters/small-breweries-reform-coalition/). I believe this to be a threatening and aggressive move, especially as many of the protagonists are SIBA members. It does not help us to work sensibly to produce a fair and cohesive strategy for the future of PBD.

If you have been following this blog so far this year you will note that I am greatly concerned about overall saturation of the beer market; great for beer drinkers, but not so for brewers large and small. The whole market is being squeezed significantly. Indeed, we feel like we are the squeezed bottom4.


The basic premise for the perceived need to change PBD is that there is a barrier to growth and there may be some merit in looking at that. Without going into detail, it is difficult to grow beyond 5,000hl due to the structure of relief as the increase of duty at 5000hl is very sharp. There is another much less convincing argument that it is unfair that brewers over 60,000hl get no relief at all, as they still fail to have economies of scale. Frankly, it is complete nonsense to imagine a muti-muillion pound businesses see similar diseconomies of scale compared to micro-brewers and to conflate the two issues is dishonest.

SIBA have nicely and robustly countered the SBDRC announcement with its own press release (http://siba.co.uk/2017/01/siba-responds-to-calls-from-the-small-brewers%E2%80%99-duty-reform-coalition-for-a-review-of-small-breweries%E2%80%99-relief/).

I want to voice here my own Hardknott centric view on all of this. Micro-breweries are going out of business. I hear of one gone into receivership just this week. Other micro-brewers are either activating or considering significant retraction of activities. Much of the reason for this is because the "squeezed middle" are driving down prices, and significant to all of this is recent huge mandated price drop for SIBA members into Enterprise Inns.

If we change the nature of PBD significantly we will see the "squeezed middle" using any duty benefit to further drive down the price in the market increasing damage to an already struggling micro-brewery industry. The only true benefactors will be PubCos and brewers with significant pub estates. There is already significant evidence to suggest that the vast majority of duty decreases of any sort are simply demanded by retail chains to improve their bottom line.

The work done behind the scenes to deal with these issues is complex, sensitive and contains significant alternative perspectives. I simply put my point of view across here, but it is one that I would expect most brewers of our size (1200hl/yr) to agree with. It is also worth noting that I represent around the average size for SIBA members, and therefore would expect SIBA to take as much notice of me as they would of any brewer bigger than me.

Further more, very few SIBA members are above 5000hl, over 90% of SIBA members are below 5000hl and benefit from full duty relief, essential for their very existence. The remaining 10% or so appear to be significantly more powerful in shaping SIBA policies and certainly carry more weight and have more resources to help influence policy.

One would expect SIBA to defend PBD completely and utterly. Up until recently this is exactly what has been happening, and I am hopeful that this will continue to be the case. I am significantly scared that this may change if we do not fight very strongly against SBDRC and some of the noises being made by larger organisations.

Part of the problem is that SIBA has grown now to include some fairly big brewers. Brewers can now be a member of SIBA even if they brew a colossal 200,000hl per year. This represents businesses that turn over tens of millions of pounds per year. They are huge. It is inconceivable that they can relate to the difficulties faced by 90% of SIBA members.

Now, SIBA is a democratic organisation, which in itself begs the question as to why we have allowed ourselves a position where we have such giants in our camp. I believe there is a core reason behind this, and my main reason for writing this post. Change is made via regional meetings, representation is sent via trusties to the board. Additionally, there is a route for major changes to be made via motions to the AGM. If I understand correctly, these motions have to first be approved at regional level for onward consideration by the board before finally being presented at national AGM (BeerX) for a vote.

I see there being some significant flaws in this process. Firstly, many of the brewers below 5000hl are working their butts off just to stay afloat and cannot afford the time or fuel to travel and engage with this process. I believe the direction SIBA would take would be significantly different if many more members engaged.

This is the key message behind this post. I am considering two motions to the AGM. One that ties any change to PBD to a significant, meaningful and proactive change to access to market for brewers below 5000hl. The second motion would question the rationale behind having membership over 60,000hl and the associate membership category, perhaps demanding a referendum on the policy to determine if the membership is happy with the status quo. My reason for this second motion is that I believe members over 60,000hl significantly compromise SIBAs ability to act for the majority of the membership.

For these, and other motions from other breweries to be successful we require as many sub 5000hl brewery representatives to attend both regional AGMs and the National AGM at BeerX in March.

If any micro-brewery cannot attend then there is an option for proxi-voting, which I would strongly urge members to activate.


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1Although sometimes frustrating from the point of view of this blog, as to write publicly regarding some issues would be unprofessional. Equally, there are comments I'd like to make from a Hardknott perspective that would be in disagreement with a broader view of SIBA in general. This part is hugely frustrating. Hardknott has a unique ethos towards beer and it is important to get that message out.

2Progressive beer duty is the scheme whereby small brewer's diseconomies of scale are partly helped by a reduction on the amount of tax we pay. Without this duty us small brewers would have an incredibly difficult time competing in the market and there would certainly be much less choice in the beer world. If we lose this relief many brewers will find it difficult to continue and we would see significant shrinkage in the micro-brewery market.


3A significant proportion of the pub market is tied to particular brewers. This might be through ownership of the freehold of the pub, or it might be through less obvious barriers through ownership of dispense equipment.

4With apologies, we know who to blame for this phrase, and suitable admonishment has already been administered.




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