Local beer exporters seeing Brexit benefits but facing barriers to growth in NI

GRAEME COUSINS looks in depth at some of the issues relating to the licensing laws reform debate at Stormont
Some of the beers available from Bullhouse BrewerySome of the beers available from Bullhouse Brewery
Some of the beers available from Bullhouse Brewery

They mightn’t be able to sell their own drinks to people living in the same postcode, but Northern Ireland’s microbreweries have adapted quickly and reaped the benefit of the restrictions brought about by coronavirus and Brexit.

With GB breweries finding it difficult to export to EU countries, local craft beer makers are in a good position to fill the gap as Northern Ireland maintains some alignment with EU excise processes.

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However, it is how they are able to cater for consumers in the Province that is of greatest concern right now to the 30 or so small breweries here.

The microbreweries, aided by CAMRA NI, are lobbying Stormont to be allowed to open permanent taprooms to showcase and sell their own products to the public.

Current legislation means that taprooms can only open using an occasional licence (for special off site events) borrowed from a publican.

William Mayne of Bullhouse Brewery, which recently expanded to premises off the Lisburn Road in Belfast, explained the difficulties facing breweries: “First we need a friendly publican to lend us a licence, then you have to apply to the county court every time.

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“The system isn’t the easiest, it’s not really designed for taprooms but because there’s nothing else in the legislation it’s the only way we can do it.”

One year ago in the Northern Lights, a bar which falls somewhere between a pub and a taproomOne year ago in the Northern Lights, a bar which falls somewhere between a pub and a taproom
One year ago in the Northern Lights, a bar which falls somewhere between a pub and a taproom

He added: “What we’ve seen across in GB is the rise of micropubs, where essentially because the high street is dying, entrepreneurs have spotted a gap in the market where there’s no barrier to entry. They get a licence from their council rather than the court system, and move into a vacant unit.

“One of the main revenue generators for growth in craft beer has been taprooms and the fact that you can build a connection with the local consumer. That’s a major selling point and also the revenue and margin you can get allows breweries to reinvest and grow export.

“We’ve no big indigenous breweries left in Northern Ireland since Bass closed. 99% of beer is imported, so it’s not good for the economy whenever there are good local producers, but most of them are having to export 50% of their product.”

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The 28-year-old from Newtownards said breweries in NI were hampered by the fact they can’t sell directly to the public: “It seems absurd to anyone else in the world that someone would start a brewery without being able to have any direct retail sales. That’s the situation here. It’s an uphill battle, but there’s about 30 of us now so the will is there.

Hospitality Ulster's Colin NeillHospitality Ulster's Colin Neill
Hospitality Ulster's Colin Neill

“We’ve been campaigning since 2011 when the new wave of breweries started to try and update the legislation to bring it into line with elsewhere in the western world.

“Apart from the Republic of Ireland we’re the only country where you can’t sell your products directly to the public.

“If someone comes on a tour we can’t even give them a sample. If somebody wants to buy beers to take home with them, tourists or anyone else, we can’t sell it to them.”

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Online sales are also tricky. Brewers can sell beer via their website but the order actually has to be processed and delivered via a friendly and co-operative pub or off sales who are then invoiced by the brewer for the purchase.

William, who set up Bullhouse Brewery in 2015 and employs three other people, said: “We’re lucky in that we have good relationships with independent off sales. Unfortunately the smaller breweries who have just started out don’t have those links. That route to market is cut off for them which is a shame.”

He said: “There’s a draft bill going through Stormont that will allow us to do off sales and online sales of our own products but won’t allow us to do taprooms. We’ve been campaigning and lobbying for that taprooms amendment.

“The only opposition to that is coming from Hospitality Ulster. The city centre publicans are very strongly opposed to it. They see it as competition.”

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William claimed that most publicans are tied into contracts with the big breweries: “It’s terrible for the consumer. We essentially operate within a monopoly. Publicans can’t offer their consumers choice. They’re restricted from putting local beer on draft.

“If a pub believes in its own product it shouldn’t worry about competition. If you’re bringing more people out in the evenings it’s better for everybody.

“I can see the pubs argument that they think the breweries operating taprooms will be a pub by the back door but at the same time it’s a niche product. Craft beer caters for a small section of the market in Northern Ireland. It’s nothing for the pubs to be worried about.”

In terms of production during lockdown William said: “Traditionally we would have maybe put 30% in the keg, 10% in cask and then the rest into cans. Lockdown has made us focus on doing the cans.

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“I think during the first lockdown people were going mad for alcohol, especially local stuff. It’s slowed down a bit, but it’s still busier than normal. The off licences have been flying. People are at home every evening trying to pass the time.

“The ironic thing is that NI breweries were quite well positioned to facilitate the small pack products of bottles and cans because there’s no local draft market.

“For us production has gone up. We moved into new premises in September and expanded with a bounceback loan helping us to get an automated canning machine and increased capacity.”

He said his concerns with how Brexit would affect the export of beer have eased: “The NI protocol seems to be looking okay in terms of export to the south (of Ireland) and EU. We can still use the EMCS, the old EU movement of goods system. Selling to GB is the same as before.

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“GB is our biggest market, around 50%. We’ll be looking to up that to 80% and opening up in new markets.

“EU countries are struggling to get beer from the GB so we’re well positioned to fill that gap.”

Pub manager Sinead Cashman feels pubs and taprooms operating in the same areas can be mutually beneficial.

Sinead runs Northern Lights on Belfast’s Ormeau Road, a bar owned by Galway Bay Brewery (its first in the Province), which specialises in Northern Irish beers.

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She said: “I understand where Hospitality Ulster are coming from, and the bars that are maybe under the big drinks companies’ umbrellas, but as Northern Lights we only see taprooms as beneficial to the local beer industry.

“These brewers are not a nameless faceless corporation, they are a guy called Paul, a girl called Sue. People buy from people, we’re all scratching each others back. It’s friendly competition.

“It’s vital that they get these taprooms – it’s the only thing that will allow them to maintain themselves for any longevity.”

Sinead said she had been using our the time during lockdown productively – upskilling staff and carrying out odd jobs. She added: “We’re also reaching out to customers, making sure that our regulars are all okay.”

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On the craft beer market she commented: “Beer isn’t just just about a lager, a red ale and a stout. There is a plethora of different flavours, styles and colours to be explored.

“As a group Galway Bay tend to go with independent breweries. At Northern Lights we would specialise in Northern Ireland beers. The route we have taken has worked for us. In a previous incarnation the bar imported a lot of craft beer, which in the end grew an interest in the craft beer market, but didn’t ultimately work out for them.”

CAMRA NI, a consumer organisation campaigning for quality ale and thriving pubs, wants to see new licensing laws in place that will benefit everyone.

Chair of CAMRA NI Ruth Sloan said: “Our licensing laws shouldn’t just benefit massive global breweries who dominate most pubs here. We must allow our small, local brewers to expand and thrive so that we can get access to distinctive, tasty, locally produced brews.

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“Local drinks producers need a level playing field to enable them to sell their beers in taprooms, as is the norm in the rest of the UK.”

Ruth, who has been chair for two years, added: “We’re a consumer group, we’re not lobbying on behalf of businesses here, we’re lobbying on behalf of the people who use those businesses.

“From a mental health perspective there is nothing quite like – for people who enjoy such a thing – going to the pub, sitting down with your friends and having a few drinks or meeting somebody new and having a good yarn with them. From our perspective pubs are the heartbeat of the community. They are essential to the healing process.

“We completely support the restrictions that are in place. People’s lives are the most important. But we also need to make sure that pubs are supported through these times so that they exist at the other end in whatever form that may be.

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“We know that any publican worth their salt is doing everything right so whenever they do get back we’ll be as safe as we can be in their excellent hands.”

Hospitality Ulster has outlined its concerns about the creation of ‘pubs by another name’ should permanent taprooms be allowed in new legislation.

Colin Neill, Chief Executive of Hospitality Ulster, said: “We welcome the development of the likes of microbreweries which adds to the hospitality and tourism mix and have actually led the lobby on their behalf to get them a licence category which can be used as part of a chargeable visitor experience, so that people can sample and purchase products to take away, and also sell at designated events.

“It is important that microbrewers have an outlet on their sites for their products, however, it creates a unfair disadvantage to local licensed hospitality outlets if they use their taprooms to operate like a pub without the same overheads and only opening at peak times.

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“This is creating a pub by another name – one which hasn’t had to buy and maintain a licence, nor has to pay rates based on turnover. Its puts local pubs at a distinct disadvantage.

“It is also important to remember that the licensed hospitality trade often carries locally produced beers and craft ales and that tap rooms would be equivalent to a suppler selling directly to the public and undercutting the market.”

“The hospitality sector is currently on its knees and we need to make sure that the recovery allows for everyone in the hospitality sector to grow, and for it not to compete with itself unnecessarily.”

When giving evidence to the Department for Communities at Stormont on the Licensing and Registration of Clubs (Amendment) Bill, Colin dismissed the ideas of pubs being tied down by deals with big breweries.

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He said: “I have heard people talk about barriers, and they mention the tied house. Again, that is factually incorrect.

“About 50% of our industry have agreements with suppliers to buy product. The old tied agreement is long gone.

“The situation now is that people do volume deals. Most pubs can have craft beer because it is their choice. We do not have huge chains here – I think that the largest chain has about five pubs.

“They can choose whom they buy from.”

• The Committee for Communities’ examination of a licensing laws reform bill is ongoing at Stormont

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