The old brewery debate

ManseMasher · Mar 8, 2016

A big chunk of what you earn will end up in HMRC's pocket too - whatever you do don't leave them out of the equation! Have a look at SIBA's website for some ideas too, and ONBP's blog on here.

Leon103 · Mar 8, 2016

Will check it out. There are reductions on tax if you brew less and you don't pay tax if you keep it in storage on site

Halfacrem · Mar 8, 2016

One question that might be interesting to ask yourself is whether you have to follow the business model of other small breweries, and maybe investigate other breweries that might expand their business into other beer-related areas.

geetee · Mar 9, 2016

Halfacrem said:
One question that might be interesting to ask yourself is whether you have to follow the business model of other small breweries, and maybe investigate other breweries that might expand their business into other beer-related areas.

I reckon the next big thing is beer and food matching, if you can tie in with local restaurants and make ales to match their main courses that is an extension and at a premium.
Also beer and food tasting events especially if you have a local cheese, bread or cake maker who wants to exhibit their wares. Could alsotie in with coffee houses for coffee flavoured ales also and the world is your lobster!

Leon103 · Mar 9, 2016

Doesn't that happen now. The restaurant I was in at the weekend had marked on the menu which of their beers go with what dishes.

fatbob0501 · Mar 9, 2016

Definitely the dream but serious question is your sales skills. You may love brewing but hate sales element. It's very competitive out there especially if you step on the big boys toes.
Good luck tho

TheRedDarren · Mar 9, 2016

Very interesting and exciting.

I have to echo a lot of the advice already mentioned.
Be prepared to sacrifice a lot of your life in the first few years of setting up a business. I did! The only way I got through it was my unbelievably supportive girlfreind, by supportive I mean financially, morally and emotionally!
Theres a lot to running a business but if you have that support, you can learn on the job.

I'm really excited by the thought of leasing, I am in the planning stage of opening a brewery and currently saving and making money with my own business to invest in myself and get some sort of match funding - so it's a few years off yet. But leasing could bring it forward a lot!

huwb · Mar 9, 2016

Leon103 said:
A course seems the best way forward but wanted a rough idea on costs before committing to anything.

My background is web design so that is covered cheap and I have a number of links in the beer business including a distributor (family friend).

All licences are in place. Water is free from a bore hole and all necessary paperwork is in place for that from the previous operator. I forgot to ask for water waste. I believe most of the legal stuff is in place for it to continue as a brewery (last brewery left on March 1sr)

In the eyes of hmrc, you would have to apply to approve urself to brew and the brewery premises to whatever legal entity you set up so a ltd company or sole propiertorship etc, aswell as there is a new scheme if u wanted to wholesale the beer to pubs. All of which have theyre own legal requirements if you go to the gov.uk website check out public notices pn226 beer duty and pn2002 awrs which cover setting up a brewery and wholesale alcohol.

geetee · Mar 9, 2016

Leon103 said:
Doesn't that happen now. The restaurant I was in at the weekend had marked on the menu which of their beers go with what dishes.

Yes it does my point is that it is something to get involved in if you can.

simon12 · Mar 9, 2016

You will need to register the brewery again as you are a new owner this takes about 2 months until you are registered with HMRC to pay the duty. I recently bought a brewery and even though I bought the whole ltd company we had to reapply, we didn't realise this at 1st and used the previous owners tax code and when we asked if we could we never got an answer so carried on. The premises license for on site sales will need a license holder which I imagine will have to be changed to you but is only needed to sell to the public you can sell to pubs without it. There is a new think coming into effect at the end of this month where you have to register to sell trade details here https://www.gov.uk/guidance/the-alc...-awrs#who-needs-to-apply-to-register-for-awrs . As you are producing a product for consumption you need to tell the council health and safety and trading standards but you don't need to apply they will likely visit you to check hygiene hazardous substance use/storage and that type of thing. I don't think any of this costs anything just alot of paperwork.
This link is the main thing that tells you about registration with HMRC https://www.gov.uk/government/publi...-226-beer-duty/excise-notice-226-beer-duty--2 once you start getting through it its not as bad as it looks. If you want to see my tiny brewery just over 3 hours from you near gatwick send me a PM but its likely not worth the distance.

Leon103 · Mar 9, 2016

Thanks for the responses. I started looking through the hmrc stuff today. Didn't realise it involved so much.

Simon. Glad to see someone giving it a go. How long have you been trading? What size is your setup?

terrym · Mar 9, 2016

Just watched the Brewdog recruitment programme on BBC iplayer. http://www.bbc.co.uk/iplayer/episode/b073gnxw/whos-the-boss-3-brewdog
Whatever you think of the programme and how the process went with the three candidates is immaterial. The key things that came across for me were that James Watt, the co-founder of the business, may be passionate about his beer, but he appears to be much more passionate about making his business a success, to the point of being pretty ruthless. So in my view it's business first, beer second. That's why they have expanded from next to nothing to where they are today in only eight years.
Mr Watt has also written a book I found out; Business for Punks: Break All the Rules - the BrewDog Way. Looking through the reviews it could be very thought provoking for a variety of reasons!

simon12 · Mar 10, 2016

I have a 1BBL pilot brewery I bought in November the seller was running it as a hobby and mainly sold to beer festivals. It can obviously never be profitable as it is so really just testing the market and getting to grips with the equipment. I don't know what the market is like where you are but if its anything like around here I would give you the following tips.
Buy the best hops you can without worrying about price and don't build recipes around price if your making only good beer theres alot of other just good beers out there and the duty will cost more than ingredients anyway.
Price it at ÃÂ£70-80 for 4-5.5% beers and only discount if it helps sell a firkin to someone to get them to try it, this is around what independent pubs will pay for big brand beers. when you can sell your full capacity you should have a good name for great beers and can increase your prices.
Don't try to sell to big chains on the SIBA list or the weatherspoon as they will only pay around ÃÂ£55 a firkin which is only sustainable for a 20BBL+ setup.
Build any business plan around making ÃÂ£30 profit on each firkin as this should be worse case.
Expect to have to deliver quite far away to sell even the 5BBL you may get.
Hope this helps it only based on my limited experience and from what I have seen from other local breweries.

Leon103 · Mar 10, 2016

Thanks Simon. Good advice. Did you have to put down a 20k deposit with hmrc?

simon12 · Mar 10, 2016

No we have not given HMRC any deposit we just pay as you go. We are not a registered warehouse to store beer that is not duty paid maybe if we were we would have to but all our beer is liable for duty immediately (ie we owe them it anyway but pay it monthly).

Leon103 · Mar 10, 2016

Ok I need to re-read star hmrc part again because it sounded like a lot of paperwork for what should be a straight forward procedure

CreweBrewer · Mar 10, 2016

Regret the things you've done, not the things you haven't. Mash on!

geetee · Mar 10, 2016

Agree with you about Brewdog, looks like James Watt likes to get his own way, didn't even seem like fun to him.
In my opinion anyone with a bit of knowledge can make beer. It takes a lot of hard work and drive to make beer and sell it succesfully and maintain this with increasing competition.
My plan after being made redundant was to do the Brewlab course and then start a small 5-10 barrel brewery. Looks easy and although I have enough money and the information it will be damned hard work just to get it to the point of starting out with increasing work to keep it going as demand increases. I would be starting on my own and have decided at the moment to put this on hold. I may return to it in the future but at the moment there seems to be at least 2 new breweries springing up every week in the Newcastle area.

Please don't let me put you off in any way because looking through all of the rules and regs can be daunting but when you break them down they are easy to manage.If you are driven you WILL succeed, my personal circumstances are more to blame than the process itself.

chuffer · Apr 3, 2016

300 a month looks a steal!

Druncan · May 8, 2016

At the moment HMRC seem fine. No big costs. Plenty paperwork + Just a bit bemused where our 'brewing plant' is,,,, Try to explain it's going in a mezzanine above the bar after ripping out redundant water tanks. Our current duty suspense/conditioning store is two 23l cornies and 8 x 5l mini kegs. Biggest outlay is two Reeves posh hydro's and thermometer with certification. Brewing day book and monthly return could be the main pain. Brewing industry friends say JFDI. HMRC are fine if you do your research and document. Already have HACCP / Eatsafe awaiting EHO visit,,,,,

The old brewery debate

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