Brewers discuss hopes for government aid
Today’s announcement from the federal government concerning the staggered easing of restrictions provided some much-needed relief from the uncertainty facing Australia and its hard-pressed hospitality industry,
But it will not be until step three, which could be a number of months away, that pubs and bars begin to reopen, the government said, meaning that the hospitality, and as a result the brewing industry, will need continued help to survive.
Since the beginning of the pandemic, state and federal governments have attempted to alleviate the strain on small businesses from COVID-19 restrictions with a series of initiatives, and brewers of all sizes and locations have taken them up.
From federal schemes such as JobKeeper and excise payment deferrals to state loan schemes and licence payment deferrals, we spoke to brewers large and small across the country to get an idea of what initiatives were useful to them, what problems they had encountered and what they need to keep brewing beer.
While JobKeeper has kept many people paid and in roles and giving small businesses some much-needed breathing space, there are some kinks that have yet to be worked out.
Criticisms of the revenue conditions which a business needs to meet, the extent and type of workers covered, as well as difficulties in paying employees in advance before JobKeeper is actually received have all caused headaches for the brewing industry.
Dan Dainton of Victoria’s Dainton Brewery said that it had not been able to take advantage of the JobKeeper initiative that would allow staff to be reinstated, and the government should make it easier to qualify for.
“We’ve had too much growth even though our bar has completely closed and cost around 15 people their jobs,” Dainton said.
“[I’d want the government to] sort out the JobKeeper benefit so successful businesses that have still been greatly impacted can reinstate their staff.
“Just because we’ve grown by over 60% doesn’t mean that the people who have lost jobs as a result of the government deciding to shut bars should suffer.
Bridge Road Brewers, one of the Victorian High Country brewers which has suffered from not only the effects of the COVID-19 pandemic but also bushfires, has also taken up JobKeeper.
“JobKeepers was such a relief,” said CEO Donald Mace. “Otherwise there would have been more people going to Centrelink, but it isn’t the clearest process to determine who is entitled to it and who is not.”
Corinna Steeb of Prancing Pony said that the SA brewery has been able to keep 17 of its 26 employees on board due to producing hand sanitiser and refocusing the business on takeaways, amongst other innovations.
The brewery had troubles over the Easter weekend last month when a SAPOL directive prohibited takeaways in the locality, but this was later rectified.
“Four casuals were reinstated once the SAPOL directive was lifted,” Steeb said. “We have placed our people on the Job Keepers program and our place is in a happy and positive space. We hope those that we had to stand down will come back as soon as we are able to increase output and work.”
Richard Adamson at Sydney’s Young Henrys said that the JobKeeper payments had been tricky to manage.
“Businesses have to stump up for the payroll and be reimbursed, and a lot of businesses are struggling to be able to do this in the first instance,” Adamson said.
Braeside Brewing is one of the smaller businesses, having only opened last year, that needed help in the form of a bank loan to keep making staff wage payments in order to be eligible.
“But once JobKeeper kicks in, we will be repaid by the government,” explained founder Rame Abdallah.
Bright operations Manager Rupert Shaw said that the big one for the regional brewery has been JobKeeper, as well as grants like payroll tax.
“We’ve registered and applied, and there’s the administration side of it and also the HR and operational side of it in terms of managing people’s hours and leave and various other things that come out of the JobKeeper rules.
“You have to understand as an employer what you can and can’t do. We operate under the hospitality award so there’s flexibility in that.
He agreed with other brewers in that there are difficulties around the advance payment required with not necessarily any guarantee that employees will even be eligible for JobKeeper though.
“Overall the initiative itself is good. There’s just two big things. First of all you have to pay it in advance to people and those people and you have not yet been verified as qualifying for the payment.
“So to get Jobkeeper you’ve got to have aid people all the way through April, you don’t know if these people are eligible yet. It’s clear for a full timer, but you’ve got casuals, you’ve got to try and interpret whether they have been systematically employed by the business for a year previous to March. Businesses have to take the punt.
A concern for smaller businesses is that you have to pay them if your brewery is closed or have a very significant drop in on-premise trade, but where are you going to get that money?”
Deferrals, rent and loans
There are a whole host of other initiatives, from a moratorium on evictions and guidelines around rent, to the deferral of excise payments and individual state-based initiatives as well.
Victoria’s Dainton Brewery has been able to take advantage of the deferment of excise payments, and Dan Dainton said that the process of getting these was a bit convoluted.
“Our general manager has been across it, though even as a chartered accountant he has had to seek help from others to make sense of it all,” he explained.
Braeside Brewing has managed to take advantage of some of the business loan freezes and Bridge Road has also benefited from delaying BAS and Excise payments, as well as some R&D incentives.
“[We’ve also got involved in a] capital works grant program so that we can invest now in new equipment during these down times in order to set us up for future success,” explained CEO Donald Mace.
Corinna Steeb of Prancing Pony meanwhile said that while the SA brewery does not have any government assistance for the R&D and engineering work due to the brewery being reconfigured to extract ethanol for its hand sanitiser, it was hoping that they can put together an R&D tax incentive claim for the end of the year.
Richard Adamson from Young Henrys said that when it comes to rent, landlords seem to be caught between a rock and a hard place.
“The banks are deferring payments on mortgages but are not waiving any interest. The code recommends that Landlords have at least 50% waiver as part of their relief agreement,” he said.
“This leaves them short, even with the land tax reduction. The banks need to share some of the pain.”
What does the brewing industry need?
Donald from Bridge Road Brewers says that as regional and rural breweries have been hit hardest, not only by COVID-19 restrictions but also drought, bushfires and the decline of tourism.
“Additional tax concessions for Regional breweries as we don’t have a big enough population for takeaway food and beers,” he said.
He would also like logistics grants for regional breweries as they have ultimately had to get full kegs back from capital cities to Beechworth where the beer will probably be dumpe
Donald at Bridge Road has said that excise relief up to $350,000 from the existing $100,000 and not just deferral of payments would be a major help.
Corinna at the Prancing Pony, which had a major win earlier this month when the South Australian Police retracted a directive banning takeaways in their region, said that they are continuing with takeaway and drive through, and home delivery service. Online sales are doing well but nationwide delivery costs are proving prohibitive.
“ These are doing ok but it is expensive to ship beer around the country and we have not found a reasonable priced distribution service,” she said.
The IBA is in discussions with the federal government to enable brewers and the rest of the alcohol industry to write off excise payments, but there has been no luck so far.
Dan Dainton said that completely writing off excise payments for independent breweries would be a huge help, but an existing issue remained which might affect brewers in the long run.
“[They need to] look into anti-competitive schemes by the big breweries around beer taps in venues. The ACCC finding a few years back was rubbish,” he said.