Navigating grants for breweries July 2022

Government funding in a post-COVID world is aimed at innovation and jobs creation, and brewers could take advantage if they know how to apply for them.

Breweries stand at the convergence of several key focuses for governments, from food and beverage to manufacturing, as well as export and tourism.

According to the States of Brewing report, breweries across the nation received more than $7 million in state funding last year, with another $5 million alone from the Federal Government’s Manufacturing Modernisation Fund.

While funding is available, for breweries that are time and resource poor, tapping into this funding can be challenging.

Simone Barker is a government grants expert at independent tax and advisory firm Grant Thornton Australia.

Barker explained that breweries existed in spaces that were very attractive and fit well into various State and Federal government aims and objectives in the food and beverage, tourism and hospitality and manufacturing industry sectors, amongst others.

“Regional operations can be attractive from a regional economic development perspective both from a business operations perspective and where a visitor economy can be created through a combined brewery and hospitality venue,” she said.

“Craft beer is a growing industry globally with a number of Australian brands already exporting or having near-term export strategies.

“Government is highly supportive of supporting Australian made goods for export and craft beer is attractive as it also leverages Australian grown primary produce, offering a strong provenance story internationally.”

But getting started with a grant application can seem an onerous process, and with a complex grant system under the jurisdiction of different governmental departments and levels, even identifying the right grant for a business can be a challenge.

Identifying grants

Barker highlighted the “enormous number” of generous industry assistance programs offered by various levels of government in Australia.

“Governments provide these funding programs in order to support a broad range of policy objectives.

“Whether offered by the State or Federal Government, each grant program is unique and will have its own set of guidelines, eligibility requirements and funding arrangements.

“Smaller businesses may have trouble navigating the grant landscape, and lack the resources to keep up to date with new grants opening, particularly, as mentioned, since there is no good central source of information.”

Identifying suitable grants, and even being aware of their existence, can be difficult for breweries focused on the day-to-day operations of brewing beer and managing distribution and hospitality.

Keeping an eye on relevant departments and areas of interest can help and advisory businesses such as Grant Thornton offer monthly or quarterly reporting services to identify relevant grant programs.

“It is very important for applicants to read each particular set of guidelines and to understand the strategic intent of the investment offered, including which policy objectives the funding contributes to,” Barker explained.

“Each grant program is developed with clear objectives and intended outcomes. Programs may also provide targeted support to particular industry sectors be it manufacturing, tourism or regional economic development.”

Barker explained that for the most part, both State and Federal Governments will be looking to make a funding co-contribution to a proposed project. This means the applicant will be expected to self-fund a portion of the project costs.

Finding the right grant

“For many small to mid-size businesses, it is hard to keep across all the grant programs on offer,” Grant Thornton’s Barker explained.

“There is no single source of information, and it is often up to the business, or business advisors like Grant Thornton to keep across the latest developments.

“Funding is administered by a range of departments and agencies at both Federal and State governments levels. These departments and agencies are relatively siloed and grant opportunities will be publicised on a variety of official websites.”

Under the current Federal Government, the bulk of manufacturing grants, which may be applicable to a number of brewers, are offered from the Department of Industry, Science, Energy and Resources, she said, although the grants listed there are not exhaustive or necessarily up-to-date with state programmes.

The next step then becomes applying to the grant.

“Most grants are discretionary and competitive whereby funding is provided to only the most ‘meritorious’ projects based on an assessment against a set of merit criteria,” Barker said.

“In contrast, there are also a number of ‘entitlement’ programs, which as the name suggests, entitle eligible companies to claim a refund against eligible expenditure.”

Entitlement programs include the Export Market Development Grant (EMDG) program, which funds marketing activities in target export markets, example activities include attending trade fairs, meeting with distributors, and developing marketing collateral.

There is also the Research & Development Tax Scheme which provides a 43.5 per cent refundable tax offset, on eligible Research & Development activities, to companies with an annual turnover of less than $20 million.

“[At the time of writing] there are approximately 99 open business grants available in the Food & Beverage and Tourism industry sectors (including related to Food & Beverage manufacturing) worth over $6.3 billion.

“These grants cover a range of business activities such as general operations, export, manufacturing, COVID-19 relief and recovery, training and employment, and marketing activities to name a few.

Investing in the business

Of course, embarking on a grant journey is a time-consuming process.

“Applying for funding is an investment for a business, it takes time and internal resources to pull together a successful grant application,” Barker explained.

“Many companies do not have the time or human resources to dedicate to the task nor do they have a good understanding of the Government approval processes involved.

“They also often lack experience in structuring applications to suit the Government program merit criteria or in many cases the diverse skill sets required to assemble the data to support an application.”

“This could be due to a lack of understanding around the triggers for Government funding, lack of expertise in preparing forward estimates and/or modelling to evidence expected project outcomes, and limited ability to develop and clearly communicate the investment pitch,” Barker explained.

She recommended that applicants read any application guidelines thoroughly to understand eligibility requirements, but also the strategic intent of each programme and what the organising government is trying to achieve.

At the time when the MMF grants were announced, for instance, Jonathan Ward, CEO at BentSpoke Brewing Co, said that the team invested a lot of time in ensuring the project fit the grant.

“We spent a lot of time adapting our business case to the requirements of the grant and although it has been announced, we’re only just going to the grant finalisation process now, there are a bunch of conditions,” Ward told Brews News at the time.

“This project resonated really strongly with some of the government’s manufacturing priorities, of which one is obviously food and beverage, and reading those manufacturing priorities allowed us to line up what our project is with those priorities.”

A strong application will quantify any outcomes and demonstrate how a project delivers those outcomes.

“Businesses should only apply for programs where they are able to rate strongly against the various merit or assessment criteria,” Barker said.

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