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

[Lyrebird_Cycles]

Treasury issued a white paper covering alcohol taxation a few years ago, one of its recommendations was to remove the current "concessional" excise rates. Tax mandarins love flat rates.

One thing that could work would be to move the offset up from the current 1.15% to say 2%, which would accomplish most objectives but still be a nominally flat rate.

 

[tugger]

Costs about $1.50/L un packed.

 

[Killer Brew]

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

You left out that we need to look after the multinational large employers so we should provide an incentive to sell in bulk containers

 

[damoninja]

Costs about $1.50/L un packed.

U brew it apparently slug about $3.50/L unpackaged, BYO bottles or buy theirs. Assume they face similar costs ex packaging, but I'd also assume the tariff is different too, probably less.

100%+ markup ain't too bad, assuming of course your production is quite high...

 

[n87]

U brew it apparently slug about $3.50/L unpackaged, BYO bottles or buy theirs. Assume they face similar costs ex packaging, but I'd also assume the tariff is different too, probably less.

100%+ markup ain't too bad, assuming of course your production is quite high...

Don't they do lots of single batches (per customer)?
That would cost much more than a couple of huge batches.

that being said... where's my pitchfork and torch!

 

[tugger]

Cost vs retail. U have to make a few dollars.

 

[damoninja]

Don't they do lots of single batches (per customer)?
That would cost much more than a couple of huge batches.

that being said... where's my pitchfork and torch!

8 cartons minimum evidently, closer to a triple batch.

Admittedly yes it'd likely have some higher costs but then in some ways they'd have less since the labour's also cut. You're basically paying for ingredients + equip hire + equipment running costs (refrigeration etc).

 

[pcqypcqy]

I think 1.50 / litre is the ingredients cost only. It's what I've worked out for brewing the beers I like to drink, which usually involve more grain and hops than your standard commercial fare (even commercial craft brew).

Another $2/litre margin for a customer would work out to be $40 approx for a corny, which is not even 2 hours at $25 an hour of someones time, which if you worked out how much time you spent physically hands on with a brew day would be about right.

 

[pcqypcqy]

Excise vs WET vs whatever does suck, but it is what it is. No good wishing for something different.

We met the black hops guys at a takeover here in Toowoomba a few weeks back, and they also talked about an agreement with the ATO that lets them pay excise as product gets sold, not at the point of production/packaging which is normal. It's a little known relaxation for small guys, and they don't really tell you about it. But if you know about it, and ask for it, you might get it. This makes a HUGE difference in a startup's cashflow. I imagine coupled with the rebate that someone else mentioned, this could really turn a business plan from no-dice to a viable proposition.

Periodic Settlement Scheme or something I think they said it was called.

 

[Killer Brew]

U brew it apparently slug about $3.50/L unpackaged, BYO bottles or buy theirs. Assume they face similar costs ex packaging, but I'd also assume the tariff is different too, probably less.

100%+ markup ain't too bad, assuming of course your production is quite high...

BOP's don't have to pay excise, the biggest cost component in commercial brewing

 

[Killer Brew]

I think 1.50 / litre is the ingredients cost only. It's what I've worked out for brewing the beers I like to drink, which usually involve more grain and hops than your standard commercial fare (even commercial craft brew).

Another $2/litre margin for a customer would work out to be $40 approx for a corny, which is not even 2 hours at $25 an hour of someones time, which if you worked out how much time you spent physically hands on with a brew day would be about right.

Commercial quantities of ingredients are far cheaper than we pay as home brewers (bulk buys excluded). On ingredients only (malt, hops, yeast, water) you can make a basic pale ale for around 78c / L.

Edit: this is based on good yeast management practices not pitching fresh liquid yeast every brew which would seem to be what Black Hops are doing

 

[Lyrebird_Cycles]

We met the black hops guys at a takeover here in Toowoomba a few weeks back, and they also talked about an agreement with the ATO that lets them pay excise as product gets sold, not at the point of production/packaging which is normal. It's a little known relaxation for small guys, and they don't really tell you about it. But if you know about it, and ask for it, you might get it. This makes a HUGE difference in a startup's cashflow. I imagine coupled with the rebate that someone else mentioned, this could really turn a business plan from no-dice to a viable proposition.

Periodic Settlement Scheme or something I think they said it was called.

That's really useful information.

 

[pcqypcqy]

https://www.ato.gov.au/Forms/Application-for-a-periodic-settlement-permission/

 

[Lyrebird_Cycles]

Commercial quantities of ingredients are far cheaper than we pay as home brewers (bulk buys excluded). On ingredients only (malt, hops, yeast, water) you can make a basic pale ale for around 78c / L.

Edit: this is based on good yeast management practices not pitching fresh liquid yeast every brew which would seem to be what Black Hops are doing

Sounds about right, we used to get angry messages from head office if we went above 20c per litre back in the early 90's, adjusting for inflation that comes out to about 40c now. Adjust again for more malt and higher hop loads and your figure would be close.

Hops have also gone up in price spectacularly, Czech Saaz was the most expensive hop around at the time at all of $9 per kilo ($17 / kg in 2016 money)

 

[Killer Brew]

Sounds about right, we used to get angry messages from head office if we went above 20c per litre back in the early 90's, adjusting for inflation that comes out to about 40c now. Adjust again for more malt and higher hop loads and your figure would be close.

Hops have also gone up in price spectacularly, Czech Saaz was the most expensive hop around at the time at all of $9 per kilo ($17 / kg in 2016 money)

Grain between $35 - $50 per 25kg. Hops $30 - $50 per kg. All + gst. Huge difference on hops absolutely!

 

[good4whatAlesU]

A similar discussion could be had about Britains "sugar tax'

It is only applied (?) to sugary soft drinks and not to other products with high sugar content (e.g. chocolate milk).

 

[Dave70]

A similar discussion could be had about Britains "sugar tax'

It is only applied (?) to sugary soft drinks and not to other products with high sugar content (e.g. chocolate milk).

Who gives a **** about coke and chocolate milk, tax it out of existence for all I care. Its the Turkish delight and baklava that need dispensation..

 

[damoninja]

Sounds about right, we used to get angry messages from head office if we went above 20c per litre back in the early 90's, adjusting for inflation that comes out to about 40c now. Adjust again for more malt and higher hop loads and your figure would be close.

Hops have also gone up in price spectacularly, Czech Saaz was the most expensive hop around at the time at all of $9 per kilo ($17 / kg in 2016 money)

Personally I come in average about $1 a litre. If something low(er) ABV than my median 5.5%, reuse yeast, malt driven over hop drive, I'm as low as 40c a litre, but I don't brew these too often...

A fermenting batch of honey wheat, 50L batch (~45L packed, after losses) low on the ingredients at $28 grain, $2 hops, $7 honey, $2 yeast starter (reused yeast w/extract starter) putting me at about $40.

I use about $2 of gas, $2 electricity per brew (******* South Australia) as a conservatively high number, my fermentation fridge costs about $1 a month (measured with a killawatt)... oh look ~$45 for 45 litres for a ~5.5% beer this beer would have been OK without the honey too, about 4.5% but cheaper.

Naturally there's other minor things which to the home brewer are incidental and not considered such as priming sugars, caps (2c each for me)

Now in a hoppier beer of similar gravity I would have a slightly higher grain cost but higher hop cost, probably come in around $1.20 a litre.


I just make sure I buy my hops in bulk at good prices, grains I get for a good price, yeast I'll reuse if it's suitable else


Works for me

 

[good4whatAlesU]

Freight is the killer for me.

The cost of freight is diabolical.

 

[Stouter]

Freight is the killer for me.

The cost of freight is diabolical.

I hear that!
As Regional West Coast freight hits everything I buy, whether it's bought locally, or from the nearest Metro, or from Eastern States.
Fuckin' $1.33/L diesel, where's the continuous rant thread....