Microbreweries have called for the extension of a 'life-or-death' tax relief

One beer maker said it could mean ‘the difference between having a craft brewing sector or not’.

By Conor McMahon Deputy editor, Fora

A GROUP REPRESENTING independent craft brewers in Ireland has called on the government to maintain a special tax break for the industry, calling the relief “essential for the survival and growth” of the sector.

The Independent Craft Brewers of Ireland (ICBI) has asked Minister for Finance Paschal Donohoe to maintain an existing 50% excise relief on Alcohol Products Tax, which is applicable to independent microbreweries that produce less than 40,000 hectolitres (one hectolitre is 100 litres) of beer annually.

In its pre-budget submission, the ICBI – which represents 34 members – said the excise relief is a crucial lifeline for businesses operating in a drinks market heavily dominated by multinationals.

“Every member of our association is currently developing its own small-scale artisan brewery for growth and development,” ICBI chairman Peter Mosley said.

“Sadly, many of our members are battling to survive. All of our artisan producers are dependent on the support from this excise relief.”

As previously explained by Fora, the domestic craft sector – which accounts for around 3% of the Irish beer market – has recently experienced a slowdown in growth due to excess capacity on the marketplace and tough competition from larger brands. This is in line with international trends.

Barbara-Anne McCabe of Bridewell Brewery in Clifden, Co Galway, said that in light of the current market conditions, maintaining the 50% excise relief could mean “the difference between having a craft brewing sector or not having one”.

“There’s such a big difference between small, artisan brands and the multinational big brands. Last year, a report for Bord Bia stated that the craft brewery sector in Ireland is 18 times more labour intensive than its multinational counterpart. That shows that the economies of scale are so, so different,” McCabe said.

Larger companies have significant marketing budgets and established distribution channels that microbreweries often struggle to tap into, she said.

“In our own case, we’re a two-person operation. My husband Harry and I do everything. We brew the beer, deliver to our mainly draft-on-tap customers and we do all our own marketing, sales and customer service. We really appreciate the support we get.”

Get our Daily Briefing with the morning’s most important headlines for innovative Irish businesses.