Independent brewers call for more Government help

15 April, 2020 by Brydie Allen

Last week many rejoiced at the news that the Government had passed the $130 billion wage subsidy package in Parliament. 

However it’s not good news for all, with the Independent Brewers Association of Australia (IBA) emphasising that the current scheme provides no assistance to 1.1 million people, many of whom are independent brewers. 

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Although the IBA praises the measure for those it does help, it says those left out are people that don’t fall under ‘traditional employment,’ which is often the case with many new businesses and brewers, who may not draw a salary or have any full-time staff. 

According to a recent study by the IBA, 93 per cent of independent brewers are in a loss making position, but not all of them will be eligible for Government assistance. That’s why brewers across the country are joining the organisation in calling for support from the Government. 

One Mile Brewery in the Northern Territory is an example of a brewery suffering without any possible assistance from the Government’s current subsidy scheme. Co-owner Bardy Bayram said: “We both work and our brewery isn’t a full-time venture for us. But, it’s hit us hard, we’ve lost three quarters of our business.”

Even with takeaway options, margins are so low that they are only able to pay one single casual worker, and neither of the owners are taking a salary.

“Much like Lion, we reached out to all our customers and said if you have kegs, we’ll take it back and credit you. But unfortunately, we haven’t been eligible for any government support because we have no full time employees and we don’t meet the requirements,” Bayram said.

Other brewers who run small operations and were on the brink of expansion, are struggling with the loss of plans and expected income. 

This includes Madocke Brewing in the Gold Coast, where Co-owner Annelies Nijskens say they currently operate from home.

“We run our business out of a residential garage at the moment, but were supposed to build a bigger brewery later this year…We’re really tiny, but it’s affected us a lot because I just quit my job to push the business. Unfortunately, those plans have gone back into the cupboard,” s​aid Nijskens.

Mark Prior, Owner of One Barrel Brewing is also in this situation, having been about to expand his one man operation and now having production stalled.

“​I had some investors come on board recently and we were about to open, which was huge for us and for the local area. But, my investor group had their money tied up in stocks and shares and after the market collapsed [due to COVID-29] they couldn’t move forward,” said Prior.

Anticipating business from a beer and BBQ festival too has left him in a poor position. He said: “I went into high production and made all these batches with varied ingredients. Now I’m stuck with all this beer I can’t do much with. I can’t even put them into packaging due to labour cost, so it’s had a huge impact.”

It’s with these concerns in mind as examples that IBA has reapproached the Government for further assistance, after last month writing to politicians for help, and joining the Australian Distillers Association to lobby change for the whole industry. 

They’ve put forward a proposal to the Government with suggestions about how they can help independent brewers, including the following points:

  • Understanding that most new businesses operate in a different fashion to corporates, with owners often staying off the books & an interchanging workforce
  • Excise rebate raised to $350,000 for 2020 financial year
  • Payroll tax abolished, so businesses aren’t penalised for re-employing staff

Chairman of the IBA, Peter Philip, said: “​Indie brewers are at a massive competitive disadvantage to the multinational mega-brewers because our beer is hand-crafted, which means we employ 15 times the number of employees per litre of beer.”

“​Many are surprised to learn that excise makes up 45% of the cost of making a beer. That’s more than we pay our staff or the farmers who grow the barley and hops we use. This tax goes up twice a year and is the fourth highest in the industrialised world.

“Beer is our national social drink of choice and we think all Australians want to see independently owned Australian breweries survive so we can keep providing beer lovers with great products made by small, locally-owned breweries​.”