Craft beer sector builds on incentive

Brian Cowen ’s tenure as minister for finance is remembered mostly for the profligacy of the dying years of the Celtic Tiger but, in at least one sense, he showed a degree of farsightedness.

Cowen’s decision to halve the excise paid by microbreweries in the 2005 budget revived an industry which had shrunk to a few hardy suppliers. Excise is paid on product leaving the brewery. Halving the excise made it possible for microbrewers, defined as those breweries producing up to 20,000 hectolitres per annum, to retain more of their capital.

It also allowed them to offer their product at a competitive price in pubs and off-licences because the economies of scale make craft beers much more expensive to produce. The Irish craft beer market has never looked back. This St Patrick’s weekend, a t Dublin’ s George’ s Dock, the craft beer makers have set up their beer village for the third year in a row.

Ten beer suppliers and two craft cider makers – producing everything from a stout kept in a whiskey cask to a long list of ales and beers – will be displaying their wares. Some 11,000 customers passed through the doors last year.

The Irish craft beer market is booming. According to a report produced by An Bord Bia obtained by The Irish Times , sales rose by 42.5 per cent last year and are expected to rise by a further 35 per cent this year. The growth is mostly focused at home despite the recession and the waning drinks trade. Domestic sales were up by 55 per cent while exports were up by 26 per cent.

The endorsement of craft beers by the influential food writer John McKenna has had a “very positive” effect on consumption, Bord Bia said. More pubs and restaurants are seeing benefits of stocking craft beers to increase footfall at a time when the overall trade is declining, the report added.

These figures are impressive until one considers the craft beer market’s share of the total market. Last year, some 36,860 hectolitres of craft beer were sold worth €7.5 million. But the total beer production amounted to 8.514 million litres so craft beers are just 0.3 per cent of the Irish market. The even smaller craft cider market with four suppliers accounts for just 0.08 per cent of the Irish cider market.

The microbreweries have about 70 full-time and part-time employees. By comparison some 1,584 people work in what is known as industrial brewing.

Growing industry
There are now 22 Irish craft breweries. The Donegal Brewing Company, which opened at Christmas time, has just got a distribution deal with Superquinn for its Donegal Blond beer. There are now two microbreweries in Donegal, the other being Kinnegar beers. Across the Border the newest kid on the block, the Red Hand Brewing Company in Donaghmore, Co Tyrone, produces its first beer this weekend.

Half of Ireland ’s microbreweries have come on stream since 2009 when the recession really started to bite. It remains, however, an infant industry. Britain, where the traditions of local breweries never died out, now has 1,009 breweries at the last count, the highest on record.