Cloudwater boss defends craft beer prices after £13 a pint uproar

In an interview with The Morning Advertiser​, Jones said too much attention was focused on consumers being “ripped off for a pint”, beer duty was too high and macro-producers should face more scrutiny over the money they make from the tied-pub model.

Jones’ comments come after the Rake pub, London Bridge, was criticised for charging more than £13 for a pint​ of Cloudwater Double IPA.

“A pint is a ridiculous measure to be serving a beer of that strength,” Jones said. “But if you spend £16 on four pints of bitter, or you spend £15 on three thirds of 9% DIPA you're getting the same amount of alcohol units for the same amount of money, so how is that controversial?”

“I'm not bashing anyone, but I am raising concerns that the national press latch on to the wrong things to worry about, such as people being ripped off for a pint. Sure, £13 is a big number but it’s actually the same value for money as your £4 pint it's just 2.5 times stronger.

“By spending so much time labouring this non-point we are missing out on the opportunity to have conversations that may actually offer a positive image of the industry.”

Profits reinvested

Jones confirmed that 100% of the money Cloudwater has made on the sale of its beer has been reinvested in the brewery business, and that “nothing has been extracted” from the company.

“We are trying to do OK for ourselves. We are trying to run a business where we pay staff the living wage and where we survive the next five years,” he said. “We pride ourselves on being open, honest and demonstrating that doesn't need to be a risk in itself.”

The brewery’s co-founder said part of the reason craft beer was so expensive was because of high duty rates, and warned that an end to small brewers’ relief (a duty discount paid to breweries that produce less than 60,000hl of beer per year) could cause an end to the craft beer scene in the UK. 

“The rate of duty we have to pay absolutely compromises my position to grow the financial stability of Cloudwater as a company, and it definitely curtails the reinvestment that I can look to put back into the brewery, making better beer and sourcing better ingredients,” he said.

“UK breweries are paying one of the highest duty rates in Europe. The rate of taxation on breweries purely for the production of alcohol, not including corporation tax or VAT, is four to five times more than our American peers.”

Small brewers relief 'needs protecting'

“There have been some murmurings that small brewers relief is to be challenged,” he continued. “If small brewers relief finished, micro-breweries would finish in the UK, I'm pretty confident about that.

“If our duty prices went up, we would have to change our entire outlook as a business. We would have to cut off wholesale in order to maintain the sort of potential and viability of the business. We wouldn't be able to make enough money in that situation without a massive price hike.

“Nobody is sitting on a comfortable enough margin to be able to absorb an increase in duty. The small brewers relief is the growth enabler and the marketplace entry enabler that it was designed to be and it needs protecting.”

Tied model scrutiny needed 

Jones said that more focus should be placed on how much money brewing giants made from tied pub model in the UK.

“How much money does AB InBev make out of all of the non-craft, non regional taps that exist in every single tied pub up and down the country?” he asked. “They are pouring Stella, they are pouring Fosters, Heineken etcetera. How much money is going to macro brewers out of the non-craft sector? That to me is a much more crucial question that whether the Rake is making enough money to keep the lights on.

“The Campaign for Real Ale's Good Beer Guide​ is full of businesses making the majority of their profits from macro products,” he continued.  “The fact we are not shining a light on that f**king massive elephant in the room, but we are scrutinising start-ups, is just a bit crazy to me. The scrutiny of our numbers is just not being levelled at 'the norm'.

“I'm not trying to say for one second that all those pub models should change overnight and they should all exist on cask or die, but there are graver concerns for me - such as the future of traditional beer being propped up by macro products. Maybe that is something we should be having a national debate about.”

Cloudwater was named the 5th best brewery in the world​ and the best in England at the 2017 RateBeer awards.