‘The devil’s in the details’ with Qld licence proposals


Last week, the Queensland government asked brewers for their opinion on proposed changes to licensing which it says will benefit them, but the “devil is in the details” according to industry professionals.

Russell Steele, of RSA Liquor Professionals, who has been involved in the government consultations about new licences, said that the Department for State Innovation’s Craft Beer Strategy was an “overwhelmingly positive” show of support for the industry.

“Putting this strategy that, to date, has been almost internal between government and industry itself into the broader community, we’re confident it will reinforce positive community input in the brewing industry across the state,” he said.

However Steele said there are also a few issues to be ironed out, from the 5 million litre cap to enduring approvals, and some smaller sacrifices that would have to be made to accept more sweeping amendments.

“The devil’s in the details. With trading hours, right now we can sell takeaway liquor of our own beer, until midnight, this is now 10pm [according to the proposals].

“[This is because] new bottle shops can’t trade after 10, so in that respect they are taking something away from us we already have – we’re not a full bottle shop, so what’s the harm?

“But if that’s what ends up in the policy, so be it, there are so many wins in it, you’re not going to go to [a brewery] and buy a growler after 10pm realistically anyway.”

Craft spirits

David Kitchen, owner of Brisbane’s Ballistic Beer Co and the Independent Brewers Association’s Queensland representative, commended the actions of the state government in its consultation over licence changes, but said that there were a few issues with the proposals as they stand – namely relating to artisanal spirits.

The proposals authorise the sale of craft beer and wine produced by other companies off premises, for on-premises consumption during ordinary trading hours. However Kitchen says this does not go far enough in supporting all artisanal craft beverage producers.

“I would like to be seeing us supporting our fellow artisanal producers. Spirits are a growing industry, it’s new, it’s interesting, it’s filling a void that consumers clearly want.

“Spirits producers are going to be in the same position we are now. Five years down the track they’ll have a lobby group asking for exactly the same things craft brewers are asking for. Why not do it right now?”

Kitchen said that the inclusion of craft spirits in the licence could also help breweries directly.

“We do need to ensure we get an adequate number of people coming to our taprooms to ensure our financial viability. It’s a critical element of any new brewery’s cash flow management.”

He suggested that allowing a small selection of independent spirits (rather than those controlled by large producers, such as Diageo-owned Bundaberg Rum) would break down barriers for customers who may not be beer drinkers, thus catering to groups of people who may have different tastes.

“If we can’t offer something for those people, we lose more than one person, we lose a group of people. It has a significant knock on effect.

“We’re allowed to have other beers, so let’s have other spirits in there, but the overriding rule there is that the majority of all products that get sold in the venue still have to be produced on site at that venue.”

Size matters

Steele highlighted issues with the stipulation that the licence will only be available to brewers who produce no more than 5 million litres of beer annually (including under other licences held by related entities).

This effectively cuts out Asahi/AB InBev and Kirin-owned entities like CUB, but also potentially bigger craft producers, such as Stone & Wood.

“The industry has provided significant feedback about the current 5-million-litre cap. When the existing 5-million definition was introduced in about 2014, no craft brewer within Queensland was approaching that number,” Steele said.

“What we’ve said to government, if this is a policy about developing the industry, and the policy solution you are seeking is to ensure it is limited to craft beer or artisan producer only, and not open to abuse by major liquor producers, then an alternative approach, or a different cap than the current 5 million is required.

“There is much greater demand, craft beer is a developing industry, so if it is an industry development policy why would we penalise someone once they grew and were successful?”

The IBA’s David Kitchen agreed, saying that bigger independent breweries should not be blocked from the licence purely due to their size, although it wasn’t necessarily a cut-and-dried issue.

“I’m a little conflicted, I kind of think if they are big enough they’ll be able to afford it,” Kitchen said.

“But [in relation to] the permit for selling at events – for example, if [a brewery] hit 5 million I would have no problem with them having a stand and turning up at an event.

“Why penalise a company the government is supporting to grow, and penalise them when they get to 5 million. When you look at something like Sierra Nevada, they are still a craft brewery, there’s no doubt about it, but they’re huge.

“They’re saying we’re putting a maximum level on your success in this state and at that point then, they’re saying they will take away their support.”

Steele explained that even now there were examples of breweries who would not receive the benefits of the new licence, although these are inevitably major independent brewers with greater resources than the average microbrewery or brewpub.

“Stone & Wood is a perfect example. They’re at 15 million litres altogether, so they are ineligible right now.

“This leading brand has chosen to expand their operations into Queensland partly because the state government is showing support for the craft beer industry in Queensland and this is something we should all support.

“Their venue on Bridge Street will add to the depth and value of the Queensland tourism offer. Why would we then via this policy choose to penalise that brand and not allow them access to this policy?”

While acknowledging the greater resources large independent breweries can wield, he said this imposition could affect the industry community as a whole.

“At some level Stone & Wood doesn’t need a leg up either but if they’re not able to get this licence, they can’t get the craft beer permit, and they can’t join an industry-led craft beer festival because the permits clash.

“[A cap like that of the IBA’s 40 million litres] would leave ample growth for every Queensland-based brewer to still be fiercely independent.

“20-25 million would leave plenty for growth too, but 5 million is still low, there are a number tracking towards that.”

Enduring approval

Within the proposals is a stipulation for enduring approval, which will authorise licensees to sell their beer at promotional events like farmers markets and craft beer festivals, with the stipulations that it is only a ‘sample’ size at the events, or sold for takeaway from the event – a notable difference compared to a similar licence for winemakers.

“Enduring approval is not the way to go. We need a permit scheme so we can apply on an event by event basis,” said Steele.

“It doesn’t work on two key fronts. As a sample, who is going to rock up and try a 50ml taster, or take away? With the wine industry licence, I can buy a full bottle, sit there in their area at the event and drink it.”

He said the other issue with this is that existing trading hours limit the licence extension.

“Enduring approval does not work because liquor licence has fixed trading hours.

“If you have someone like Aether which is open 3pm to 6 or 7pm on Fridays and Saturdays, and even the breweries licenced from 10am to midnight, it will be linked to hours at the premises. What time does a farmers market start?

“We need an actual permit system, not an enduring approval.”

He also said this was not a new concept or change to existing rules.

“This enduring approval is a bastardisation of the commercial public event scheme in the Liquor Act and is not supported or used by industry, it’s already in the legislation so it’s clearly not working.”

David Kitchen agrees, saying the framework for a permit already exists in the wine industry as a free permit, and he would like to see this implemented.

“What was the logic behind that? We went through this whole process with this craft permit years ago.

“All we need is exactly the same licensing arrangement as wineries do. They can turn up at a farmers market, sell their products, go home at the end of the day, costs them zero dollars and allows them to gain access to the local market,” Kitchen said.

“Remove things like this that require liquor licensing to have to do extra checks. If they’re happy with the way wine companies can do this, just do the same. Don’t create another set of rules, paperwork. It’s not like we’re an industry that doesn’t have enough paperwork to start off with.”

Licence fees

Another change proposed is the increase in licence fee to $1,050, up from what Steele suggests is $710.20 currently.

While this $340 increase may seem a lot to particularly microbreweries, in comparison to hotel licences, which cost more than $3,000, it’s a small price to pay for the benefits, explained Steele.

“Some breweries have two liquor licences, for example a wholesaler and a cafe licence, which allows them to have guest taps and wine. So they’re paying two lots in licence fees.

“If they are allowed under this new licence to sell those wines, that will save about $400 as they’re only paying one fee.

“One-licence models will pay more, but by comparison, a commercial hotel licence has a base fee of $3,402 and this new one does give an expanded right to these licensees to sell a range of limited craft products for takeaway, and a moderate increase in licence fees is appropriate.”

He said that while there were a few points that may require further consultation, the state government’s investment in craft beer and pushing their strategy forward was commendable.

“Parliament’s not sitting but Minister Cameron Dick is progressing this during downtime in the parliamentary calendar.

“It’s the perfect time to do it, and as the state minister responsible it’s great that his department is continuing to maintain progress towards passing this.”

Kitchen agreed, saying that he hoped a logical and fair agreement on the licensing proposals could be reached.

“Let’s make it straightforward, simple, and not put arbitrary restrictions on different things.

“The golden rule as far as I’m concerned is the 50 per cent rule – that 50 per cent of the space should be devoted to manufacturing and 50 per cent of the product we sell has to be our own manufactured, and the other is RSA.”

However he praised the state government for its willingness to consult with the industry and work together on a solution.

“Despite our frustrations, we do recognise the efforts by parts of the department to go to consultation.

“They’ve done a lot of work and my hope is that they go back, look at those notes [from industry consultation], and don’t take a soft option because the hotels association or FARE wants to prevent us from running successful businesses.

“Businesses which I believe contribute positively to making Queensland a more interesting destination, encouraging sensible drinking behaviour and high employment growth.”

View the changes here and email your thoughts to the department at advancedmanufacturing@dsdmip.qld.gov.au.

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