From the remnants of the sadly failed The Bottle Shop business has emerged a new ABI-owned operation, Beer Hawk (B2B), which has the objective of bringing some professionalism to the craft beer industry in the UK.
This is the aim of The Bottle Shop founder Andrew Morgan who is now head of Beer Hawk (B2B) and suggests the “juvenile” nature of the industry contributed to the failure of his business when it abruptly lost some big contracts. It went on to leave a batch of breweries with unpaid bills and piles of their kegs and bottles locked, and legally inaccessible, in the company’s Canning Town warehouse earlier this year.
Morgan says: “There are simply no contracts in the industry. Very few breweries were legally equipped to get their beer back from us when we failed and this is also why Beavertown and Mikkeller could simply take their trade away from us with little notice. It’s representative of the juvenile nature of the industry.”
He says this sort of thing should not happen again and at Beer Hawk (B2B) he intends to ensure both breweries and the Beer Hawk business itself have legal safeguards in place. “We had less than five contracts across all The Bottle Shop dealings. There are simply no contracts in craft beer. This is not the case in other industries or in the US craft industry,” he explains.
This lack of ‘retention of title’ the vast majority of creditor breweries had over the stock locked up in the Canning Town warehouse means that this beer has passed into the hands of ABI as part of The Bottle Shop assets that the company acquired during the sale process that was handled by the administrators. In reality, much of this beer will now be spoiled – or near its sell by date – due to the length of the administration process and therefore has questionable value.
At the point of collapse The Bottle Shop was understood to have had around £400,000 of stock in the business. [Disclosure: Bohem Brewery, of which I am co-owner, had £10,000 of unpaid stock sitting in The Bottle Shop warehouse]
Morgan defends the collapse of The Bottle Shop and says the breweries he bought from was all done with good intent and not done “dishonestly”. “The credit extended to us was decided by the breweries supplying us. It was not a massive corporate swindle. It was the way business was done,” he says, adding that the situation was made difficult by the “shoestring” funds that the Bottle Shop had at its disposal.
This does of course include the £400,000 that The Bottle Shop raised from a crowdfunding campaign – much of which went into building of a cold chain infrastructure. [Disclosure: My family lost £1,500 in the crowdfunding campaign].
“No one likes to lose, least of all me and investing in beer or running a beer business can be a risky affair, but at The Bottle Shop we did our best and gave it the best chance possible of being successful. We went into the crowdfunding as a profitable business, but things got out of control when we lost the two key distribution agreements,” he explains.
At this point Beavertown’s Neck Oil and Gamma Ray kegs and cans represented four of the top-10 sellers for the business and it never recovered from their loss. “When a wholesaler loses business like this then the small brewers and retailers ultimately take a hit,” says Morgan.
ABI’s purchase includes the warehouse and its cold chain platform that Morgan says can now be implemented fully with “proper funding” from ABI. A new 65,000 sq ft Beer Hawk warehouse is also being built that will be used to hose stock for the current consumer-facing website and the new B2B trade operation.
ABI is in the process of acquired the former Bottle Shop Arch bar/shop on Druid Street. This unit will join the existing two Beer Hawk bars, which are not the direct responsibility of Morgan. The opening date would be around Autumn. ABI brands Camden Town and Goose Island will sit alongside other smaller independent breweries. These will include some former Bottle Shop clients in the US such as Green Flash, Great Divide and Bear Republic.
Which small independent UK brewers will want to deal with the ABI-owned Beer Hawk (B2B) business remains to be seen but Morgan is hoping the big business approach will have some appeal.
“The Bottle Shop folding has created some ripples. I want to ensure that these things are not repeated in the new business. For this we need simple contracts. ABI has the power to enable small businesses more,” he suggests. This is undoubtedly also up for debate in these testing times for craft beer.
Glynn Davis, editor of Beer Insider