The Independent Brewers Association has written to the Prime Minister, Treasurer and other politicians requesting meetings to discuss a survival package for independent breweries during the coronavirus crisis.
Chairman Peter Philip said the effect that COVID-19 will have on independent brewers is “potentially devastating”. The association is fighting for measures to help the industry overcome the crisis, keep businesses open and save 3000 jobs.
“The independent brewing industry currently faces a massive threat created by the Coronavirus off the back of a difficult summer season with the bushfire tragedy and flooding,” he said.
The IBA is forecasting reductions of up to 80% of taproom revenue and 40% of wholesale trade for the six-month period covering the autumn and winter.
“Combined, it is highly likely that breweries will lose 30%-80% of their revenue during the peak of the epidemic which experts say could last for up to six months,” Phillip said.
It comes as many independent brewers make the decision to close to the public.
As Sydney craft brewer Modus Operandi noted in a message to its followers on Facebook: “Based on best practice, from March 18 our brew-pub will be closed to the public temporarily. This is a shattering decision to have to make but it’s in the best interests of doing our bit to ‘flatten the curve’.
“This is an extremely challenging time for small independent businesses – we’ve fought too bloody hard to still be here today to let this virus get to Modus and what we’ve built.
“It’s our life putting the best damn beer we can into your hands and it’s an honour we are part of such a great beer community locally and around this country. Let’s all band together and support local businesses where we can – we are going to be a better community for it – all the little guys will sure as hell need it in the coming months!”
COVID-19 scare for Canberra brewery
Meanwhile, a man in his 30s who visited Capital Brewing (pictured main) in Canberra on March 14 has been confirmed as the second case of COVID-19 in the ACT.
The man attended the Art, Not Apart festival last Saturday afternoon between 4pm to 5pm and then Capital Brewing Company in Fyshwick on Saturday evening between 5pm to 6:30pm.
However, given the health precautions that the brewery already had in place, the risk of transmission was very low.
“ACT Health believes there is a very low risk of transmission of the virus to other people from his visit and therefore no self-isolation or testing of partons or staff has been required,” co-founder Laurence Kain told Beer & Brewer. “Patrons and staff who were present around that time have been advised to monitor their health and report any symptoms.
“We’d already implemented a policy of any staff feeling even remotely unwell to stay home and report any symptoms. This will continue of course. ACT Health have advised the tap room is safe to open, and as such we continue to trade.
“We are in close consultation with ACT Health and will continue to take direction from them on how to keep our community safe.”
How the government can help small brewers
There are three ways that the IBA believes the Government can help small independent brewers survive the crisis:
- Short-term excise relief for survival: Excise makes up 45% of the production cost of beer and is the most targeted way that the Government can provide assistance that scales with the size of the brewery business. The IBA suggests that a six-month suspension of excise payments for breweries under 20 million litres would help small breweries that are most at risk. A costing of this initiative would be $35million or an average payment of $11,200 per FTE employed by small independent brewers.
- Business survival grant: Excise relief may not be enough to ensure survival of businesses, so brewery businesses should be able to apply for a one-time grant of up to $50,000 and interest-free loans of up to $500,000 to assist small brewers to keep their doors open and staff employed.
- Recovery excise relief for recovery and growth: The IBA has made budget submissions asking for small brewer’s excise rebate to be increased to $350,000 in the 2020 budget as well as other initiatives geared towards helping the industry meet its ambitious growth targets.
How Lion is tackling the crisis
Big brewers are re-evaluating how they will navigate the crisis too.
Lion noted in an announcement: “At this stage all our key breweries and production sites are operating and we’re taking steps across our manufacturing network to ensure there’s no disruption to supply.
“We are managing stock levels and have multiple scale breweries so we don’t expect any disruption at this stage. We have business continuity plans in place should any of our breweries be impacted.
“In the meantime, across our brewing operations we’ve taken the decision to close hospitality venues and brewery attractions where they are co-located with strategic manufacturing sites in some of our key markets, such as the US, UK and Australia. We are monitoring other markets such as New Zealand.
“This is to minimise movements in and out of our main production facilities to safeguard our people and the supply of our products to customers.”