Independents' day

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Last week saw the Society of Independent Brewers' annual conference take place in Southport and it showed an organisation that really has come of...

Last week saw the Society of Independent Brewers' annual conference take place in Southport and it showed an organisation that really has come of age.

Beer drinkers expecting a cheaper pint as a result of the introduction of progressive beer duty (PBD) in June 2002 were cruelly disappointed. But the impact on small brewers has been dramatic. The extra cash generated by the duty reduction for brewers producing less than 30,000 hectolitres (18,330 barrels) a year may not have cut the cost of beer for the consumer or the trade, but the micros have ploughed the windfall back into their businesses.

The Society of Independent Brewers' (SIBA) conference reported that half its members expanded capacity in 2003. Nearly 60 per cent took on more staff and over 70 per cent replaced old kit. Small brewers were also able to clear debts and new set-ups were encouraged into the market. There are now well over 400 microbrewers in operation in the UK, 300 of them members of SIBA.

The doubling of the PBD threshold to 60,000 hectolitres announced in last month's Budget may only benefit a handful more brewers. The British Beer & Pub Association wants a 200,000-hectolitre threshold to pull more regional brewers into the scheme. But the mood at the SIBA annual conference nevertheless verged on the euphroric.

Keynote speaker John Grogan MP, chairman of the Parliamentary Beer Club, not only pledged practical support for SIBA's campaign to open more routes to market for its beers (The Publican, April 5) but congratulated the organisation for lobbying on PBD that was "on a level with the big multinationals".

The point that Mr Grogan thought SIBA got across so well was that the 30,000-hectolitre limit would deter small brewers from expanding their capacity beyond that. And it is clear from the latest production figures that this is no mere academic argument.

SIBA's members expanded their production by an average nine per cent in 2003 - and many of them are galloping away. A third recorded growth above 20 per cent.

Whether that kind of growth can be sustained depends of course on SIBA's success in opening up a route to market through the giant tenanted pub groups. It reckons only about five per cent of pubs in these companies have access to a small brewer's beer, the main problem being that it is uneconomic and impractical to deliver local brews to local pubs through a convoluted national distribution network.

But there has also been a breakthrough here. A direct delivery scheme, by which a brewer can take its beer straight to pubs that want it in its locality, has been trialled with Avebury Taverns and, in recent weeks, taken up by Unique Pub Company. That deal, which involved Scottish Courage agreeing to small brewers making their own deliveries, has already trebled the number of licensees who were previously in the group's Cask Ale Club and alone is worth an estimated 6,000 barrels a year to SIBA members.

And Enterprise Inns, which, when it takes over Unique will have 9,000 outlets, is apparently giving serious thought to extending the scheme to its existing estate.

A buoyant Nick Stafford (pictured), SIBA's belligerent commercial director, is not going to stop there. He wants to approach every pubco with a direct delivery scheme and is more than happy to tell who's on the top of his hit-list. "My sights are set on Giles Thorley," he said, referring to Punch's chief executive. "I totally believe beer from small brewers will provide added value for Punch's shareholders."

And he also believes, of course, that it can benefit pubs. Indeed, SIBA's goal in the year ahead is not only more direct delivery but a closer relationship with licensees. "It's retailer time," says Nick. "I want SIBA to become the number one source of support for licensees and that's another reason why direct delivery is so important. It enables us to have direct contact with the pubs. There are 300 members of SIBA, and that means we have 300 experts in running microbusinesses."

SIBA will also be initiating a Centres of Excellence project which will involve inviting publicans and their customers to a local brewery to learn more about beer. It is likely to kick off in June at Titanic Brewery in Stoke, home of SIBA chairman Keith Bott.

SIBA members output 2002 v 2003

20%+ growth - 34%
10-20% growth - 29%
5-10% growth - 10%
0-5% growth - 21%
Decline - 6%

A decline?

Though nobody at the SIBA conference believes it, the cask ale market is, according to the statisticians, in double-digit decline. That may not match SIBA's experience but the overall figures for cask ale include the national brewers which are steadily pulling out of the market in favour of lagers and nitrokegs.

Take them out of the equation, says SIBA, and we'll see the true state of the market. AC Nielsen, the research company with the best handle on sales through pubs, has promised to break down its stats in future to show regional and small brewers separately. "Small and regional brewers are driving a resurgence in cask ale and it's time for everyone to take notice," said Nick Stafford. "We are tired of being sidelined."

Sea change for SIBA

SIBA's annual conference, which took place in Southport, marked something of a sea change in the fortunes of the organisation.

Not only was it comfortably larger in terms of attendance than previous conferences, the mood was professional and confident. This was no mere gathering of hobby brewers but an organisation which, as commercial director Nick Stafford put it, "has shown it is willing to challenge the accepted norms and has the influence to change government policy".

"It's been a fantastic last 12 months," he continued. "We have all benefited from progressive beer duty, which we won after a 20-year campaign - but winning is what small brewers are all about."

The conference drew an impressive line-up of speakers including Cobra Beer entrepreneur Karan Bilimoria, Rupert Thompson of Refresh UK and the Beer Academy, the Campaign for Real Ale's Bob Jones and Martin Breading of The Beer Seller.

SIBA statistics

Nine per cent average increase in output by SIBA members in 2003
50 per cent of small brewers expanded their capacity
17 per cent of cask ale in pubs comes from small brewers
10 per cent of the brewing industry's workforce are employed by small brewers
160 million pints a year are brewed by small brewers.

SIBA National Championships

Frog Island Brewery in Northampton scooped the title of Supreme Champion in the SIBA National Championships. Its strong ale, Croak & Stagger, beat dozens of finalists selected in regional heats.

Here is the full list of winners, who received trophies from John Grogan MP: