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SIBA managing director Mike Benner speaking at BeerX: signs that growth is slowing with more business failures

SIBA AGM finds members at crossroads

SIBA managing director Mike Benner has warned of the dangers of division in the ranks of the independent brewers’ society as a maturing craft beer market threatens to squeeze out smaller players.

Unveiling a new strategy to delegates at the organisation’s annual conference in Sheffield, Benner said that global brewers are moving into craft beer and restricting access to market through “predatory pricing”. Profitability had declined, there were signs that “growth is slowing” and “we are seeing more business failures”.

He continued, “In 2015 we said we wanted to become the Voice of British Brewing. It was a big and bold statement, and I do think that’s now under threat. The temperature has risen and division is threatening out unity.”

A record number of delegates witnessed the signs of a potential split in an unprecedented number of motions put to the conference.

Arguments coalesced around Small Brewer Duty Relief (SBR) and qualifications for SIBA membership, with some believing that SBR was disincentivising growth and others that SIBA should focus on representing the smallest brewers that make up the bulk of its membership.

Hogs Back Brewery’s Rupert Thompson’s proposal that SIBA support the Small Brewer Duty Reform Coalition’s call for an independent review of the tax thresholds was lost, and while conference agreed to review membership structure, Hard Knott’s Dave Bailey’s bid to exclude larger brewers fell.

Benner hopes to maintain unity through a ‘2020 Vision’ that over the next couple of years see SIBA’s activity focus on ‘four pillars’: increasing members access to market; fighting for a fair tax regime; promoting SIBA members through its Assured British Independent Craft Brewers initiative; and driving beer quality.

He announced that £100,000 has been set aside for the campaigns, which will include research into the problems smaller brewers face in gaining access to market, to be carried out over the next few months.

SIBA will step up its lobby against lower duty on cider and look at a preferential duty rate for draught beer, which may be possible post-Brexit.

Benner said the ‘Assured’ scheme “needs to be harder hitting with retailer support to differentiate members’ beers”. That will be backed by a requirement for all SIBA brewers to be enrolled in the organisation’s Food Safety & Quality Assurance scheme or have a higher level of audit.

“There is fierce competition in a very crowded marketplace. “There are threats to quality and from restricted access to market, increased costs and legislative and regulatory pressures. A number of our members are suffering from falling values in their businesses.

“SIBA members’ share of the market has not grown. There is lower profitability and we are seeing more business failures. There are signs that the market is not sustainable and we need to see change.

“Unity is essential,” he added. “We must show leadership as a trade association and a common purpose. That’s what works with government. Division does not help us.”

Benner: SIBA not in crisis

Speaking to The Brewery Manual after the conference, Benner said that ‘crisis’ is too strong a word for the situation SIBA finds itself in.

“There is an urgency about this. We must steer a path through it. But the positive is that there is a sustained interest in our beer from consumers and the big question for us is how do we find routes to that market? It’s a challenge – but a challenge based on a massive opportunity.”

He believed that SIBA members, who all brew less than 200,000 hectolitres a year, share a common purpose. “There is a lot of difference between them, too, but they all started small and invested in their business.

“There are obviously different views on how SBR should work,” he added. “It will be difficult but it’s important we work towards a consensus.”

“We want a sustainable marketplace where our members can grow, and our policy is that we don’t think the 50% reduction for brewers producing up to 5,000hl should be reduced – that’s a red line for us.”

Duty banding above 5,000 hectolitres, however, “could be improved, but we can’t review SBR properly without addressing access to market issues. The ‘four pillars’ of our strategy must work together, and we have to take a positive approach proactively engage with retailers and brewers on improving that access.

“We have to convince people our beer is a premium product worth paying for, and we will be looking at every opportunity there is.”

Buster Grant named chairman

As chairman Guy Sheppard of Exe Valley Brewery stepped down delegates were introduced to new chairman, Buster Grant of Brecon Brewing, and his vice chairman, Justin Hawke of Moor Beer, though a Q&A session.

Hawke, Grant announced, would be taking the more public-facing role top help “raise the profile of brewers in SIBA, while Hawke himself quickly made it clear where he stood on SBR.

“At Moor we have had to pull back on brewing,” he said. “We didn’t brew at all in December because of the SBR threshold. It’s a barrier to growth, and we should try and knock down as many barriers as possible.

“I want to modernise SIBA, give it a more public face,” he added.

Grant expressed concern about whether SIBA members could stick together through the challenges they face.

“Are people lashing out because it’s tough? Maybe. UK brewers are facing a lot of problems. We’re better able to solve them by sticking together, but we’ve not got an answer yet.

“Tell us what you want, how we can make things happen for you. We want to create a better industry for everyone.”

Hawke identified “two divisions – between big and small and between traditional and modern. There is a need to bring these sides together, he said, and advocated working with larger brewers, perhaps gaining access for smaller players to regional brewer pub estates.

“They’re not out to destroy us all, and it’s better that we engage with them.”

Phil Mellows
10th April 2017

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