Overwhelming demand for high-quality craft beer is, without a doubt, providing small brewers with large sums of money, right? Apparently not, according to Ian Fozard, Society of Independent Brewers (SIBA) national chairman and owner of Rooster’s Brewery.
Small brewers’ pockets are not as deep as some would think and Fozard, in fact, is comfortable saying he believes there are now more small breweries closing than opening. His predictions aren’t off the cuff though, he has a long history in the sector, giving him an enviable perspective on the state of things.
His career, however, did not begin in beer or pubs. Fozard actually trained as an accountant in London, before quickly deciding a life of paper pushing and numbers wasn’t for him. Instead, he “somehow” moved into a general management career in the then emerging private healthcare sector, before becoming operations director for a small provider.
Unfortunately, the company he worked for was bought by corporate BUPA in 1997 and Fozard jumped ship in 1998, having decided “a future with a very large corporate wasn’t for me”.
A time for reflection
This leap left him with the time to reflect on what to do next. Fozard had been a member of the Campaign for Real Ale (CAMRA) since 1975, attending the group’s first beer festival in Covent Garden, so his interest in beer goes back some 40-odd years.
As well as his love of beer, he was left with a “bit of a pay off ” after leaving the medical care industry, allowing him to launch a new venture. “I developed a pub with my wife in Knaresborough, North Yorkshire, and we did that because there was nowhere decent to drink in town,” he explains.
“Pubs were in my blood at that point because, back in the ’80s I’d dabbled in cask-ale pubs with a few CAMRA members.
“I decided to form a pub company using my tax knowledge from accountancy training, so I formed a small enterprise investment scheme company with shareholders and started a company called Market Town Taverns, which between 1999 and 2011 grew into a chain of 15 pubs. We weren’t just selling beer.
The idea was to move with the times and to sell good pub food and have a really good wine offer, with an ambience a bit higher than the basic pub offer.”
Pioneers of no smoking
Fozard compares the pub group’s offering to modern day pubs that follow a brasserie style. The group also pioneered no smoking, becoming the first in the county to ban the practice, as well as having a no music policy in place.
“So, that was very satisfying and hard work,” he continues. “By 2011 we had managed to build a good business and then we asked ourselves ‘where next?’, because the market was becoming more competitive.”
To take the portfolio to the next level, Fozard and his investors knew a considerable sum of money would be required, as well as a lot of effort. “I was pushing 60 at this point, so we decided with the shareholders to sell the business to pub group Heron & Brearley from the Isle of Man and enjoyed a healthy return.”
So, once again, Fozard found himself wondering what to do with his time when an offer to buy Knaresborough based brewery Rooster’s arrived out of the blue. He was familiar with the business, having stocked its beer in his Market Town Taverns pubs, and both of his sons were keen on the brewing sector – with one working as a brewer and the other having experience in beer retail. So, it made sense for the trio to run the brewery together.
Dealing with the big issues
Rooster’s was founded in 1993, with Fozard and his sons taking it over in 2011. At around the same time, the brewery owner became involved with SIBA, where his experience of the brewing sector would thrust him into the centre of the biggest issues faced by brewers.
“I became a director at SIBA five years ago when there was an opportunity to be regional representative for the north east. I had no ambitions to become the chairman, but last February I stood for vice-chairman to support the chairman [at the time Buster Grant],” explains Fozard. “But as you’re aware, Buster had to step down suddenly last May to focus on his own business and I was suddenly acting chairman.”
In this position, the now acting chairman felt he could make a difference and was voted into the top spot in June.
Two of the biggest changes he is keen to make are to tax and small breweries relief, both of which place the small brewers SIBA represents at an unfair disadvantage.
“It’s a complex area and there are a lot of paradoxes. The general public would perceive things are good because there are lots of small brewers, but there are more small brewers closing than opening – I’m confident in saying that.”
Many small brewers are struggling, highlights Fozard. “I say that because one of the things I want to do as chairman is to start a benchmarking system among our members.” This allows SIBA to look at brewers’ financial and production data, confidentially, and learn what the big issues are. “I’ve seen the data and just about every brewer is operating on tight margins and just about every brewer is struggling.”
Access to market
The main issue, he claims, is access to market. In some cases access to market is better than it was 20 years ago, but because of the likes of the micropub revolution, “a lot of traditional pubs have closed and the biggest negative is the big national brewers are fighting back”, Fozard claims. “They’ve all adopted their own ‘craft’ products and they’ve upped their game, and to be fair some of their beers can’t be criticised in terms of their taste, flavour and quality.”
Such issues are small in comparison to the two big ones Fozard and SIBA are aiming to make changes to – tax and small brewers’ relief.
“Tax in this country is far too high,” laments Fozard. “And if you couple it with business rates, then it can be crippling.
There is far too much money going to the Government, which leaves less for the industry, and when you compare that with the rest of Europe, it’s bad.”
Small brewer’s relief, however, is the biggest sticking point for Fozard and SIBA. The rate of beer duty rises too quickly from 50% for brewers producing up to 5,000 hectolitres (HL), to up to 75% for between 10,000HL and 60,000HL.
“Between 5,000HL and 10,000HL there’s a steep rise in duty and you get the situation where my own brewery for example is brewing between 8,000 and 9,000HL and we’re paying 30% of our turnover in duty, which is our biggest direct cost, bigger than staff cost,” he complains, adding that it “goes out every month by direct debit long before we get paid for any of the beer”.
Pockets of positivity
Tax and duty reform aren’t the only areas SIBA is looking at, however, and it is keeping its eye on the likes of the health lobby and Millenials who are drinking less alcohol. But, concedes Fozard, this has led the way to brewers creating low- and no-alcohol beers.
There are pockets of positivity in the sector though, including for Fozard who is about the embark on an exciting new chapter with Rooster’s.
“We took a decision last year to move our premises. The business has been at the same site for 18 years and has an old brew plant. We don’t have room for a tap room either. So we found a new site in Harrogate where it’s a significantly larger premises. We’ll be opening a tap room in the spring – that’s a big move for us – and we’re buying a big new brewplant,” he explains.
“The taproom came about because there’s a huge interest in provenance and that goes back decades to brewery tours, but creating your own outlet has to be the right way forward, given most of the issues come down to access to market.”
So important is the new site that Fozard is pumping £500,000 into it, which has been raised through personal finances and a commercial loan, he explains. When asked about going down the crowdfunding route, the brewery owner says it wasn’t for him.
“I’m not knocking those who do it because it’s a great way of getting followers for the business, but I’m a bit old-fashioned.
“When I had the pubco I ran it like a mini PLC and if you’re going to crowdfund properly you’re going to be accountable to lots of shareholders effectively and that means a cost in reporting to them. It’s easier for us to do it as a family.”
Many brewers – thanks to both his position in SIBA and as the owner of an important northern brewery – will be watching with interest to see whether Fozard can make the changes for which he is fighting so passionately.