Downsizing - the Regional's last hope?
Last Updated : 21/08/07
here’s been a lot of talk in CAMRA circles about regional brewers in danger of closure being morphed into some kind of collective (the current situation at Hesket Newmarket where the villagers basically own the pub and brewery) which allows local people to own and therefore control their local brewery. Being a through-and-through Red this idea naturally makes my breast swell with Socialist pride at the thought of worker’s collectives springing up throughout the country in the midst of all the Capitalist multinational bollocks going on under a so-called “labour” government, but I’m not so idealistic that I think the idea will work in all but a very small number of cases – and here’s why.
Beer – all beer, not just cask ale – has a massive overcapacity problem; the “ten pints a night” boozers of old are long gone and even the subsequent generation of heavy drinkers are now dying off (witness a Cardiff pub which no longer sells dark as, to quote the landlord, “the drinkers died”) whilst new drinkers just aren’t backfilling the mash tuns as they don’t drink nearly as much as the past generations did. Add to this the modern pub’s dazzling (literally, looking at some of the lurid concoctions behind the bar) array of alternatives to beer and you can see why a lot of regional brewers are struggling to fill their capacity and, consequently, why a large number of them have accepted (or solicited) offers from the more predatory of their kin for their souls.
What to do? Well, as commendable as the idea of brewery co-operatives is, I don’t think it will work in this brave new world; in essence regional breweries were built in a different England and, to put it bluntly, they’re now simply dinosaurs - stomping around the place, too big and not nimble enough for their new environment and consequently, being unable to adapt quickly enough, will in due course fulfil Darwin’s theory of natural selection by becoming extinct due to their non-adaptation of the current beer scene’s new surroundings.
It doesn’t all have to end in tears, however. Most established regionals are housed in prodigious city-centre Victorian buildings that makes them prime redevelopment estate for hawkish builders, and this can be an advantage as long as we can stand the pain of losing these imposing structures and centuries of heritage. What I suggest is that any regional brewer who has a city-centre site and is tempted to sell out due to falling sales and empty fermenters seriously considers downsizing to a smaller brewplant and moving to a cheaper location; before you laugh, this has already been done by McMullen (well, they downsized and moved into a smaller part of their city-centre brewery) and seems to be working fine in their case, although it doesn’t seem to have improved their insipid beers whatsoever.
Micro breweries - largely thanks to Dave Porter - have never been cheaper or easier to install and so, rather than using an outdated 150-barrel plant once or twice a week, the brewery could sell off this heritage kit and invest in a brand-new 25 or 50 barrel plant which will not only enable them to brew more efficiently than their current half-utilised outdated equipment but also to produce more of the specials which the guest beer market demands and may have previously been out of the company’s reach if a 150BBL run wasn’t sellable – many regionals have huge problems selling seasonal beers in their own pubs and rely on the free trade, lopping money off the beer to shift it, therefore reducing their profit and the sustainability of brewing said seasonal beers in a classic vicious circle.
Thus, if a regional decides it can no longer sustain their current outdated Victorian plant and is thinking of throwing in the towel with one of the bigger fish in the pool, it may just make economic sense to sell off their prime city-centre estate and build a much smaller brewery (or simply move into industrial units) in a cheaper area of town; this will generate money from the sale of the original brewery location to finance the new site and, as a result, the reduction in utility bills and rates from the smaller brewery, not to mention prospective increased sales and margins from seasonal/special beers, may mean that the company’s future can be sustained albeit at a much reduced – and far more realistic – capacity.
There is also the consideration of the new sliding scale of “progressive beer duty” which means that brewers who don’t breach the upper limit of 60,000hl a year pay less duty than those who do (and then there’s the 50% cut in duty for those producing up to half a million litres, equivalent to £40 off each barrel they produce) therefore saving a packet of money – and of course they can always fill their empty handpumps with guest beers bought in from other local brewers therefore increasing the beer choice in their pubs. Other money-saving options, such as switching to plastic casks – which offer quite a saving over traditional aluminium or steel ones - could also be considered as part of a complete package of changes when moving site; there’s no limit to the changes that can be made to old-fashioned regionals to kick them into shape for the current millennium!
If planning permission is likely to be an issue (the brewery has been listed, for example) then they could also consider converting their Victorian pile into flats (see the old Chester’s site in Salford for a great example of this, although the brewery had closed many years previously) and branching out into the property business; this may make sense if the buildings are listed and therefore can’t be sold off for demolition, so the decision to either sell them for conversion or do it themselves are both possible if the appropriate planning permission can be obtained.
All this talk of downsizing and scaling back production to more reasonable levels is all very well, but what about collective ownership? Well, it’s a great initiative for us idealistic reds and, used in conjunction with the above theory, may just help some of the few surviving regionals to survive in this ever-changing world of volume reductions and guest beer increases and not go the way of the dinosaurs who, similarly, couldn’t adapt fast enough to their changing situation and thus became extinct, but I don’t think it’s a viable option with larger regional brewers who would need too much money raising by locals to make the idea practical and, besides, there would still be the matter of over-capacity which instigated the problems in the first place! To me, the idea of collectively owning a brewery is fine for small concerns and brewpubs, but just won’t work in this day and age for larger town breweries.
So, summing up, In my opinion losing a few city centre Victorian landmarks seems a small price to pay for the survival of the remains of our regional brewing heritage – and they’ll almost certainly go anyway when the company is sold off to the highest bidder if they don’t downsize! Traditionalists may lambaste this theory as a pile of anti-regional rhetoric but I think they need to look at the broader picture; over half of the regional brewers which were in production when I started my scooping career just 18 years ago have shut their brewery gates for good and I feel that at least some of them may have been saved by downsizing to more realistically-sized brewlengths – and, if the rest don’t, then I predict that within ten years there will be just a handful of larger – and therefore less interesting - companies remaining.
It’s do or die time for the surviving regionals, and only those big enough or brave enough to bite the bullet will survive. Obviously this theory is not some magic potion that will fix any problem, but for a percentage of the survivors struggling to fill their mashtuns it may be the only realistic option.
© Gazza 21/08/07