It’s Not Easy Being Independent

My views on SIBA are pretty clear: it’s not for small breweries. And they keep doing things that entrench this view.

SIBA, the Society of Independent Brewers, was formed as the Small Independent Brewers Association – hence the acronym – but has since changed, and their latest move takes them even further away from their origins, and will potentially lead to breweries closing down, reducing consumer choice while lining the pockets of Big Beer™.

Last week Wishbone brewery published a blog piece on SIBA’s Food Safety and Quality scheme (FSQ) . At heart this scheme sounds like a very good idea: to help SIBA members attain and maintain a level of quality in their production that pubs, bars, wholesalers, supermarkets and drinkers can be assured of. But there’s a bit of a sting in the tail. Without participating in this scheme SIBA members can also not participate in BeerFlex.

BeerFlex is the direct distribution system that SIBA have negotiated with PubCos to allow smaller breweries a route to market where there might not previously have been one. Personally I’m not a fan of this scheme either, but would rather that PubCos were forced to allow their tenants to buy their guest beer from whomever they liked, at whatever price they were able to negotiate. Through the scheme, SIBA negotiates the price the beer can be sold at, and in January 2017 it negotiated a reduction of £3 per cask on the price that breweries would be able to charge. In a time of rising costs, the small brewers’ industry body negotiated a reduced margin for its members selling into PubCos.

So for a small independent brewery to sell its beer into a large PubCo, it has to join SIBA (price starts at £150 per year), join FSQ (£300 per year) and join BeerFlex (more costs), and then sell its beer at a price dictated by the PubCo.

But is the FSQ itself worth it to guarantee the quality of beer? I’ve talked with several brewers now about what the scheme actually entailed for them as a brewery and I can’t see how it is even needed, let alone worth the money.

SIBA themselves state in their FAQs about the scheme that the common corrective actions, those where breweries fail, are “HACCP documents, ABV analysis, Brewer’s Grain administration, Excise Duty payments, allergens, traceability records and pest control”.

Hazard Analysis and Critical Control Points (HACCP) is part of any brewery’s Environmental Health inspection. You cannot legally run a brewery without it being inspected and passed by Environmental Health.

ABV analysis is part of HMRC’s inspection. You cannot legally run a brewery without it being inspected and passed by HMRC.

Brewer’s Grain administration is part of any brewery’s Trading Standards inspection. Before being able to sell beer every brewery gets a visit from Trading Standards who check and advise on lots of things, one being what happens to spent grain. If the grain goes off to a farmer to feed their livestock, it’s re-entering the food chain and has to be regularly sampled and signed off. You cannot legally run a brewery without this.

Excise Duty payments are regularly checked by HMRC and a brewery cannot legally operate without paying its appropriate Duty.

Allergens have to be controlled and clearly labelled, and both Environmental Health and Trading Standards have to sign this off before you can legally brew and sell beer.

Traceability records are a legal requirement and are checked by Environmental Health in their initial visit. Without knowing where all your ingredients come from, and what batches they were used in, you cannot legally run a brewery.

Pest Control is a legal requirement for any food producer (beer is legally classed as food), and without it being in place Environmental Health will not allow you to brew.

Each and every one of the elements that SIBA’s FSQ has as common fails are legal requirements that every single brewery needs to adhere to and are regularly checked by the relevant government agencies. If a brewery fails the SIBA FSQ audit, they have to provide written evidence that the issues have been resolved. No further inspections to check, just a letter saying it’s been sorted.

I honestly can’t see how this is not a £300 box-ticking exercise, and it’s not surprising that SIBA members aren’t happy, with some using wholesalers more than delivering direct through this scheme as the only people that recognise SIBA’s FSQ are… SIBA. Freehouses, bottleshops and even supermarkets don’t recognise FSQ, with supermarkets insisting on a higher standard of audit.

 

At the beginning of December 2017, SIBA announced that it had bought a controlling interest in Flying Firkin Distribution, one of the CAMRA-recommended nationwide wholesalers. This was done through SIBA Commercial Services Ltd, wholly owned by SIBA itself.

The reason given for buying up a wholesaler was to ensure that even the smallest brewery has access to market.

However, to use Flying Firkin now small independent breweries have to be certified by SIBA’s FSQ, the only people other than SIBA to recognise it. Although they are now part of SIBA. Which means being forced to join SIBA. Instead of supporting all small independent brewers, SIBA have now removed a route to market for a lot of them. A lot of small breweries, if not most, are running on very tight margins as it is. With costs of ingredients constantly rising, costs of operating constantly rising, and the price pubs being willing to pay not rising, it’s getting harder and harder for breweries to operate, and now being faced with a choice of additional costs or losing a route to market, this move by SIBA could well force a lot of breweries to close.

As smaller breweries close, the choice available for drinkers is reduced. As choice is reduced, market forces allow PubCos to continue to dictate the price they pay for beer, pushing the margins for breweries down even further, and pushing even more breweries to close. This also leads to the bigger breweries mass-producing with cheaper ingredients to take over more and more bar space, reducing further the choice for drinkers with nothing to stop the PubCos increasing the price per pint.

And this now appears to get worse, with Star Pubs and Bars being the headline sponsor for SIBA’s flagship BeerX show. Star Pubs and Bars are a tied estate owned and operated by the global brewery Heineken.  In the last few weeks Heineken have started to properly take hold of their new tenanted estate with reports of tenants being told to remove beers from breweries such as BrewDog because the brewery is refusing to pay rental to use the dispense equipment over the bar, and now we’re starting to hear that tenants are being told to remove handpulls from their bars because they don’t fit the criteria that Heineken are imposing on their Star Pubs & Bars estate – local ales are no longer supported in these pubs. How SIBA can justify having Heineken as a main headline sponsor at its annual exhibition after its assurances that nothing will change have been shown to not be worth the money they’re written on is beyond me.

 

TL/DR SIBA have created an expensive box-ticking exercise that replicates what breweries already have to do legally. They’ve removed a route to market for non-members, are taking money from PubCos intent on dropping cask from local breweries, and are risking further reducing choice for drinkers whilst also increasing profits for PubCos at the expense of brewers and drinkers alike.

I really can’t see how they can claim to represent the interests of independent breweries, and I can’t see how CAMRA can continue to use Flying Firkin as a recommended wholesaler whilst it runs the very real and emerging risk of reducing consumer choice.

 

UPDATE & CORRECTION: I’be been notified of an error in this article, Flying Firkin were not an approved CAMRA supplier. SIBA have approached CAMRA in the past about supplying festivals however their Festival Director was not convinced that the proposals would be in the best interests of either the breéries involved or of CAMRA.

I’d like to thank Nik Antona from CAMRA for alerting me to this so that I can put this correction in, and for standing up for the best interests of the breweries, the beer festivals, and the drinkers.