"Craft beer prices: how much does beer cost to make?"

[welly2]

Pretty interesting, and transparent, post on how much it costs this particular brewery to get beer out of the door.

http://blackhops.com.au/craft-beer-prices/

 

[mtb]

I'm seeing double. There's four posts!
http://blackhops.com...ft-beer-prices/

 

[damoninja]

******* Australia

 

[Stouter]

Good read. Certainly shows how hard it must be to build up to that tipping point where automation costs could be justified, along with better deals from suppliers for huge numbers discounts start to help.
I like the part, "So how the **** do we make any money". These guys are creative with riding this brand and making the most from it. Hats off!

 

[damoninja]

People are always telling me I should be starting a brewery

I'll send them this link

 

[zeggie]

Should be more incentives and Excise relief for small nano and micro breweries....

 

[Stouter]

People are always telling me I should be starting a brewery

I'll send them this link

But do you have a beard?
It seems to be a prerequisite to opening a brewery. Just something I've noticed. I'm sure there's stats to back this up somewhere, 9 out of every 10 brewers have beards.
Though that might be something like the Anchorman quote - "60% of the time it works every time".

 

[husky]

Should be more incentives and Excise relief for small nano and micro breweries....

Agree, however as a micro and having relatively small volumes especially initially you do get some excise relief. You can claim a rebate on the first $30k of excise paid per year. Seems counter intuitive to pay it and then get it back but that's the system currently. It makes a big difference when putting a business case for a micro together.
Say you make a standard 5% ABV brew, you can produce 23,000L per annum and all your excise is returned, you effectively only start paying excise on volume above that. This is for kegging only, bottling is a different story, much less attractive.

 

[sp0rk]

I've had so many people tell me to go pro, and reasons outline in that post are exactly why I don't.
I hate business crap, I just want to brew :/
Until I find someone who will run the business for me, I'm staying amateur (unless I can convince someone to give me a job)

 

[Killer Brew]

Great article. Coming from a business background I went through this process and had to do so from scratch given the lack of info out there. Took me around 3 months to research it all (my business plan ran to over 50 pages). Bottom line is that without being able to sell retail via your own taproom it is hard to make money even at a reasonable scale (eg. above 100,000L p.a.). In fact without the excise rebate you wouldn't. Getting distribution volumes up to around 300,000L p.a. starts to deliver far improved numbers but you still need a good retail side to really deliver a justifiable ROI (ie. you are not just doing this as a lifestyle but as a legitimate investment).

 

[rude]

But do you have a beard?
It seems to be a prerequisite to opening a brewery. Just something I've noticed. I'm sure there's stats to back this up somewhere, 9 out of every 10 brewers have beards.
Though that might be something like the Anchorman quote - "60% of the time it works every time".

I'de say they don't have time to shave

 

[good4whatAlesU]

Farmers used to form co-ops to get volumes up and costs down. I recall when growing up there was a nearby canning co-op that used to can heaps of stuff for the local growers.

Edit: How many members does AHB have? Form a co-op and get into a rotation.

 

[Roosterboy]

I found it interesting the yeast costs $125 per brew. At 4 brews per week with 1776 L, that's $25000 per (50 week) year
It would be good to know the breakdown. Yeast management is an area I think microbreweries could save money with
some microbiology knowledge.

 

[niftinev]

all excise should be the same even friken vino, why should they get treated differently

bloody hob nobs would shit their pants if this was to happen

 

[Feldon]

all excise should be the same even friken vino, why should they get treated differently

bloody hob nobs would shit their pants if this was to happen

Time to start a movement. It's a sign of the times. Worked for Trumpy.

 

[good4whatAlesU]

Around 260 (ish) working days in a year.

If 260 co-op members threw in $4 grand each, there's 1 million.

Each member gets a brew day.

Actually 130 members at 8k each is more realistic. One brew day and one bottling day.

 

[Lyrebird_Cycles]

all excise should be the same even friken vino, why should they get treated differently

bloody hob nobs would shit their pants if this was to happen

Excise would actually reduce the price of higher level bottles of wine. The standout example is Grange: instituting excise would reduce the retail equivalent price of the tax take on a bottle of Grange by about $200*.

The part of the industry that would be hit hardest would be cask wine, which would kill the inland irrigated vineyard areas ( Riverland, Riverina, Mildura). Look at the noise they made when Howard tried to fix the overallocation of water and think how any Government would survive that combined with cheap wine becoming more expensive while Grange got cheaper*.

Excise on wine was proposed by Treasury at lest as far back as the GST intro, and again by the Henry review in about 08. It gets quietly dropped every time Treasury proposes it.

BTW last I looked Australian wine taxes were the highest of any producing country.



* Except it wouldn't because Grange is a pure Veblen good.

 

[niftinev]

Excise would actually reduce the price of higher level bottles of wine. The standout example is Grange: instituting excise would reduce the retail equivalent price of the tax take on a bottle of Grange by about $200*.

The part of the industry that would be hit hardest would be cask wine, which would kill the inland irrigated vineyard areas ( Riverland, Riverina, Mildura). Look at the noise they made when Howard tried to fix the overallocation of water and think how any Government would survive that combined with cheap wine becoming more expensive while Grange got cheaper*.

Excise on wine was proposed by Treasury at lest as far back as the GST intro, and again by the Henry review in about 08. It gets quietly dropped every time Treasury proposes it.

BTW last I looked Australian wine taxes were the highest of any producing country.



* Except it wouldn't because Grange is a pure Veblen good.

There is no way a bottle of Grange has an excise tax of $200, you may be talking about WET Tax. Two totally different taxes and like i said it should all be taxed the same then i might be able to afford a bottle of Grange

 

[Lyrebird_Cycles]

Read my post again. I said that if Grange paid excise it would pay less tax. Logically this means the tax it now pays is not excise.




By the way be careful what you wish for, if everything paid the same excise the rates on beer would go up to be the same as spirits.

 

[MHB]

I doubt that, in the first instance I suspect our ever loving government would look at a "Revenue Neutral" flat rate that simplified the calculations i.e. X$/L of alcohol.
Then they would apply an automatic quarterly CPI adjustment (or a minimum flat rate of rise). Then some doo-gooder would point out that people get pissed faster on spirits so we would get an exception. Naturally they would want to discourage binge drinking so at the same time we would get a discount on low alcohol alternatives.
Being responsible we couldn't encourage young drinkers to over consume so we should penalise over sweet drinks. Supporting producers in underprivileged regional areas where wine is made is a good idea, isn't it? So we could look at a special way to advantage wine makers, its a big regional employer after all...

Right
Mark