SUBSCRIBE

News > Property law

Read more breaking news

 

 

How to turn your function room into a distillery

By Ben Winstanley , 15-Feb-2016
Last updated on 15-Feb-2016 at 17:49 GMT2016-02-15T17:49:45Z

How to turn your pub function room into a distillery

Overcoming the logistical and bureaucratic nightmare of opening a commercial distillery, the Fat Pig in Exeter has created a unique proposition. Ben Winstanley discovers how more publicans can follow suit and create a new breed of distilling pubs

When Hamish Lothian first sat in front of HM Revenue and Customs to apply for a distilling license 12 months ago, he was met with puzzlement: a pub opening a tiny distillery? That simply isn’t viable.

Undeterred, he pushed on to get the appropriate legal documentation and, earlier this month, the Fat Pig finally launched Exeter Distillery with four small batch products: Bad Fagin’s Gin, Exeter Five Grain Whiskey, Exeter Vodka and Apple Pie Moonshine.

Produced in a former bedroom above the pub, Lothian’s story is one of entrepreneurship, perseverance and patience.

“When you think of where we are in the pecking order of distillers, we are the lowest of the low, we’re plankton, not even registering on the scale. I am the fly on the a*** of the distilling industry but we’ve been brave enough to jump into the big pond and that’s a big step,” he says.

“If, like me, you’re the kind of person that likes the thrill of the chase, who is prepared to stick his neck out and live out his dreams then you’ve got to make it happen. Do you have the cajones? That’s the real question.”

The Fat Pig is certainly no stranger to pushing itself, it already has a smokehouse and an on-site brewery in the basement — for Lothian, the distillery was a natural progression.

“When we made the decision to go for it, the first consideration was how much this was actually going to cost us. My advice for anybody who wants to follow in our footsteps is to make sure you have a minimum of £10,000 you can afford to spend, and be prepared for the hell customs will put you through.”

Legalities assured

HMRC proved difficult to navigate for Lothian and his team

With a 26-gallon pot still ordered from Kentucky-based company Hillbilly Stills, the next step was to get all licensing in place to sell the alcohol, as Lothian explains: “HM Revenue and Customs needs to ensure you’re not a pillock before they give you permission to have a bonded warehouse, which is fair enough, but the process involved seven different departments — that’s an awful lot of bureaucracy to wade through.

“They start by asking completely hypothetical questions about production levels. Our still hadn’t even arrived yet and they wanted to know not just what spirits we were going to make but how much spirit the still would produce and at what ABV.

“All we had was books and tables to try and approximate what’s going to happen so you have to get your b******* hat on.

“Next step they’ll check is that you’ve always paid your taxes, whether they were always on time, basically, whether you are actually a worthy person to have a bonded warehouse.

“Once that’s approved, you can start distilling, but every time you take the finished product out of your bonded warehouse you need to fill in a form that needs to specify how many bottles of each product you’re moving, at what percentage and how many litres of alcohol that equates to in 100% pure alcohol.

“It’s mad, given that we’re only producing 15 litres of distilled alcohol a week, but I genuinely think it’s worth it.” 

Down to distilling

Lothian named the Hillbilly Still 'Bad Fagin' after Ron Moody's character in Oliver Twist

Like all other commercial stills in the UK, the Fat Pig’s must be legally named — an archaic tradition but one that produces some excel-lent stories.

“We’ve called our still Bad Fagin after Ron Moody in the 1968 rendition of Oliver Twist. In the film, he says to the boys: ‘Shut up and drink your gin’, which we thought was a pretty good premise to go on!”

In terms of the practicalities, the distillery is small enough to fit in a storage room or bedroom, but considerations must be made for the additional stock of ingredients, as well as the space for a mash tun and fermenter.

“Unlike some distillers, we start with the grain product and make everything from scratch. Some people choose to buy a distilled neutral alcohol and then ‘flavour’ it but we weren’t interested in that because it’s simply not proper distilling.

“We take the barley, wheat or apples, depending on what spirit we’re making, and start from scratch to make the whole thing. The process is three weeks long to make the product, two to produce the mash and one for the distilling process.

“It’s a full-time job, starting from 6am each day, all for 30-odd bottles a time.”

With minimal economies of scale, Lothian warns any prospective publican-distillers from entering the spirits game for money.

“At the levels we’re talking about, it simply isn’t a commercially viable business other than as a distinguishing stamp from any other pub. We’re not greedy, we do this for the people of our town and to take pride in our craft.”

The various products are sold at £3.50 a shot on the bar with a limited release of bottles at £37.50 for 50cl.

“Out of your cash, we get back no more than £10, which mostly goes towards the costs of all the stupid things we’ve done to make this happen in the first place,” Lothian explains, “I mean, if we sold a bottle for £30, HMRC would take £20 for duty and £6 for VAT — we can’t stand in that distillery all that time to make £4, it just wouldn’t work.

“The great thing is if you get your hands on the books, educate yourself and are then brave enough to actually buy the gear, it can be done! Hey, you might fall on your a*** a few times but you’re going to make headway and be a skilled, satisfied individual.”

Is it all worth it?

Exeter Distillery launched at The Fat Pig in early February

Lothian’s ‘why not?’ attitude seems to fly in the face of the many hurdles that he and his business have triumphed against.

“To me, it’s not about what we’ve achieved or the fact that the spirit tastes bloody good but I want to see lots of other tiny distilleries popping up in pubs across the country — we know there’s demand and I know now that it can be done.”

For those properties where space isn’t a premium, and there are many where a storage room or disused bedroom could be converted, the ambitious publican believes there is every opportunity for people to make their mark on the industry.

“Come on, f*** the establishment, why should it all be the big drinks companies, let’s make it about people! Screw them, we can make gin, vodka, whatever. We’re not muppets.

“I know that seems a bit aggressive but, Christ on a bike, we publicans are under enough pressure in our industry to keep going and the smaller, less diverse and less entrepreneurial we are, the more likely we’ll lose what we cherish so dearly.”

Property of the week

Granary Wharf Pub

£1,000,000.00 - Leasehold

Leeds Granary Wharf Pub.£1,000,000 Leasehold + SAV. Turnover in excess of £1.2m net.High profits, 75/25...