HMRC registration, not so daft an idea after all

[chewie]

Once you start to add up all the other relevant costs the margin comes down to pennies, the key is volume at that rate both in buying stuff in and getting it out to wholesale/retail. An off licence may well sell a bottle of beer at £2 but there buying it in at well under £1.

To realise the full profit per bottle you would need to retail it as well, this will lead to further licenses and trading restrictions and is why so many micro brewers around the world rely heavily on a tap room to promote sales.

Making beer for personal consumption in your kitchen is fine but when public health from a council has to get involved a food prep area is no longer of any use due to cross contamination concerns.

The starkest cross i can make is in spirits production, the duty per litre of 100% alcohol is approx £28.00, so that litre of smirnoff vodka at £15.00 in pre xmas sales (37.5% abv) has a duty of £10.50, thats £4.50 left to cover production, distribution and retail and also most offsales will be paying vat. The current retail price is about £17.00, i would hazard that the producer is on about £2.xx per bottle with the retailer on about £5.xx.

 

[DethApostle]

Yeah, just realised I hadn't accounted for the cost of the actual bottle too... This and ingredient costs obviously scale much better with increased quantities of a 'proper' brewery!

I was figuring the wholesale price rather than a direct sale price as the shop/pub would want to make 50%gp or so... you need AWRS to sell to another business right?
If you sell direct to a punter you'd expect more than £2 per 500ml but you would then need an off-license don't you?

Obviously to make a business of if it is inconceivable for it to be cost effective at 23l, but in theory it 'could' be done if you wanted to for just the odd now and again approach!

 

[Leon103]

I would be surprised if there would be many
Businesses will to pay £2 for a bottle

 

[IainM]

I'm amazed by how cheap Banks Bitter is, 89p for 500ml at Tesco. 35p of that will be tax. It is hard to find wholesale beer bottle prices, but I found 15p/bottle. Even if you can get them for 10p a bottle, that leaves 44p for ingredients, labelling, labour, overhead for rent and maintenance, profit, transport, retail markup, marketing... That is one tight margin.

 

[Druncan]

I would be surprised if there would be many
Businesses will to pay ��£2 for a bottle

You better believe it. Fyne Ales cost me more delivered to Tiree!
But I then charge �£3.50 a bottle. The council then charge me to uplift my recycled glass empties:-(

This I why I brew. I was selling out last year @ �£4.00 per pint of my 4% blonde session ale:grin:

 

[Leon103]

You better believe it. Fyne Ales cost me more delivered to Tiree!
But I then charge �£3.50 a bottle. The council then charge me to uplift my recycled glass empties:-(

This I why I brew. I was selling out last year @ �£4.00 per pint of my 4% blonde session ale:grin:

You sell to pubs and supermarkets at £3.50 a bottle. What size kegs are you selling at £4 a pint?

 

[Druncan]

You sell to pubs and supermarkets at �£3.50 a bottle. What size kegs are you selling at �£4 a pint?

We run a licensed restaurant on Tiree. That's the only place we supply. There are actually only two other licensed shops out here. 70 miles on a boat to Scottish mainland and our next stop West is Newfoundland.

I brew in 25l Cornies, only sold @ our premises. 40pints @ £4.00 = £160/keg!!!
Minus what I have to drink for quality assurance purposes of course :whistle:

 

[Leon103]

We run a licensed restaurant on Tiree. That's the only place we supply. There are actually only two other licensed shops out here. 70 miles on a boat to Scottish mainland and our next stop West is Newfoundland.

I brew in 25l Cornies, only sold @ our premises. 40pints @ £4.00 = £160/keg!!!
Minus what I have to drink for quality assurance purposes of course :whistle:

But not all small breweries have a restaurant to sell too or have no competition.

 

[simon12]

I'm pretty sure that there is an exception for cider producers so long as the production is under a certain quantity.

Yes you can produce up to 7000 litres of cider a year without paying duty but you still need to register with HMRC