Let’s rake over the take-overs…


Whilst writing my normal monthly diary, (March’s ventures are here) there was so much corporate finance news that we felt it appropriate to put into this separate piece.

Wicked Weed: Wicked? Hardly.

The most stunning announcement was that Wicked Weed had agreed to be taken over by Anheuser-Busch InBev. This is a mere 15 months after the latter’s Super Bowl ad mocked craft beer for amongst other things, producing “fruit cup” beer. It took less than 2 minutes on Ratebeer to find the following listing for Wicked Weed: Black Angel cherry sour, Cali Orange pale ale, Cherry Go Lightly, Currant Raspberry IPA, and Elderberry Saison, and there are many more.

The backlash was not just consumer led: Collaborations (for instance, with Jester King) were cancelled, the brand was pulled from stores and bars (including by Brewdog, which reeks of hypocrisy given their recent news), and more than half of the 70 brewers who had been invited to the annual Funkatorium International event pulled out.

A couple of days later, Heineken took full control of the rest of Lagunitas, which was far less of a surprise or controversy as they already owned 50% from September 2015.

Redchurch promoted their latest Crowdcube funding round. In January 2016 (so just after the boost from Camden’s successful sale) they raised £500k on the site, on a valuation of £2.2m, based upon their own sales and profit forecasts. However, they missed the sales figures by approximately 50%, so that the prediction of a £1k profit turned into a £170k loss. Fourteen months later they are back for another £400k, but ludicrously the valuation is now £5m, or more than double.

It is inconceivable that a business can spectacularly miss its targets and yet double in value.

At worst, Crowdcube are just picking numbers out of thin air. At best, as the FT (https://www.ft.com/content/5f7ce680-038c-11e5-b55e-00144feabdc0) reported, Beauhurst, a data firm, found that crowdfunding valuations were too high and therefore investors were paying too much. As I’ve written, at present, I would regard crowd-funding as glorified Clubcard schemes giving juicy product discounts, rather than serious equity investment vehicles.

It was gratifying to read that the FT (https://www.ft.com/content/1161a174-2b68-11e7-bc4b-5528796fe35c) agreed  (http://beerinsider.com/lack-of-equity-at-brewdog/0) about the confusion at Brewdog between debt and equity, and the unsatisfactory nature of the founders cashing in whilst the investors were not allowed to.

Finally, The Morning Advertiser excitedly announced (http://mobile.morningadvertiser.co.uk/Drinks/Beer/Carlsberg-plans-to-buy-UK-craft-brewery) that Carlsberg were planning to buy a UK craft brewery, via an exclusive podcast from their CEO Julian Momen. Specifically, they were looking “to bolster…growing portfolio with an artisan British beer”. They added that they had recently “acquired the UK rights to sell Brooklyn Lager in the UK” as a start to the process.

This is hardly surprising and suggests to me that they not very far down the path. If they had actually chosen a specific target, and certainly if they were in meaningful talks, then they would be keeping their cards as close to their chest as possible, to avoid flushing out a rival bid and consequent auction.

However, this didn’t stop a great deal of uninformed speculation online as to which brewery they might be interested in. If I were to be asked to add my guess, a couple of names popped out: Beavertown are now dominant in London, and will need financial capital for the expansion they are rumoured to be planning, although they may be able to raise it themselves. FourPure have come on leaps and bounds, receiving my coveted title of Most Improved Brewer for 2016 (http://beerinsider.com/amateur-drinker-awards-for-2016/). In Neck Oil, Gamma Ray, Shapeshifter and JuiceBox, they also both produce superb accessible beers.

I have absolutely no inside knowledge on this and it should be read purely as speculation. Indeed, they are two fantastic breweries, and all I hope is that they carry on being so for as long as possible.

However, it is very likely that it won’t be long before I am writing a piece about a “stunning announcement” of a takeover of a beloved UK brewer…..]

Amateur drinker, serious investor

M&S developing unique craft beer list


Marks & Spencer has always been uniquely positioned as a seller of mainly own label products as opposed to its rivals that predominantly flog the goods of the big brand owners. This approach has been carried through to its beer range that includes an array of approaching 90 own label craft beers, which are produced exclusively for the company.

Some of this range has been developed through working with specialist beer retailer Real Ale – operator of a shop in South West London – that acts as an agent between numerous smaller UK brewers and M&S whereby it lends its connections and expertise to the large retailer.This arrangement has led M&S to build up a range of genuinely interesting beers that sets it apart from all the other big retailers that largely sell the same products as each other and offer scant excitement for adventurous beer drinkers.

You therefore won’t find Harbour Brewing Co.’s Laid Back Lager, Double Hopped Citra from Oakham or Meantime Brewing Company’s Maritime Salted Caramel Porter on the shelves of any other retailer apart from M&S.

Zeph King, managing director of Real Ale, says the relationship began in 2007 when M&S approached Real Ale to develop four beers under the supermarket’s own brand, which resulted in beers from Hepworth Brewery and Woodforde’s Brewery being listed.

The beer offer grew dramatically in 2015 when M&S decided to go all-in on its ale range, according to King: “They said craft is not going to go away so we want to develop a regional branded range with brewers like Camden Town, BrewDog and Sambrook’s producing under the M&S own label.”

It created 12 different regions – recently expanded through a range developed specially for M&S in Ireland – and decided to have brewers supply locally. The work undertaken by Real Ale has grown markedly as the number of own label beers has since expanded along with the branded bottles and cans that M&S also stocks.

“We look for brewers to develop beers that we can pitch into M&S. We’ve built a business to mirror their team so we’ve a commercial side and technical side because to put the M&S name alongside a brewery name it has to go through various technical specialists. We’ve the people who can do this. This can mean very good volumes for the brewers and also great kudos. You get your name on a beer with M&S,” explains King.

Because of the demand for exclusive and unique beers the opportunity for smaller brewers is obvious. “The brilliant thing is that the smaller brewers are the most flexible with briefs and can produce test brews of new and unique stuff through a number of iterations,” suggests King, who adds that the objective is to always push the boundaries a little.

This has led to the likes of Sambrook’s, Harbour, Arbor, St Austell and Oakham enjoying serious pushes to their businesses. These arrangements have come about through the relationships Real Ale has built up since setting up shop back in 2005 and it’s ongoing strategy of sourcing beer from younger brewers.

Real Ale store, London

“It’s all about partnerships. We’ve got direct links to brewers through our craft beer shop and this is instrumental in us finding new products. We can take batches from up and coming brewers and if they get to a certain level then we could [potentially] see them as the right fit for M&S,” says King.

Part of the reason he reckons the arrangement with smaller brewers has worked so well is because of the focus on buying locally (within the defined regions) whereby the likes of London’s Redchurch Brewery will be supplying 80 stores rather than finding itself too stretched in having to supply nationally – which for branded lines could hit 450 stores in total. “This definitely helps us to get smaller brewers involved,” says King, who adds that it’s a similar story with Wylam Brewery that went into specific regional stores two weeks ago.

When talking to such brewers with the idea of pushing the boundaries in order to produce something unique and interesting the issue of price is clearly important but King says it is the quality of the beer that really drives the range.

Hence 330ml bottles and cans will predominantly retail at between £2.20 and £2.40 (depending on ABV) – although some own label beers come in below £2. This is in contrast to the other major supermarkets that are invariably trying to hit lower price points, and they build their ranges accordingly.

The M&S range will continue to develop, says King, as shown by the expansion into Ireland, and the launch of cans, which further push its craft credentials. There will inevitably be more 330ml cans launched – which are particularly well suited to the M&S Simply Food outlets located in train stations.

The one thing M&S also needs to do is to shout a little bit more about its unique range, which remains arguably one of beer retailing’s best kept secrets.

Glynn Davis, editor of Beer Insider

Latest Venture for Hall & Woodhouse


When bottles of ‘An American Venture’ roll into the major supermarkets next month it will mark a potentially significant move for the traditional Dorset-based brewer Hall & Woodhouse as it arguably nudges it for the first time into craft beer territory.

Although it is not making such an extravagant move as Fuller’s, with its recent launch of unfiltered keg London Pride, the creation of this new beer does represent a recognition that the market is changing nationally.

Toby Heasman, head brewer at Hall & Woodhouse, says: “Fuller’s is closer to the craft beer scene, being in London, and they see keg as a threat to them – especially with their free trade business [involving selling beer into other people’s pubs]. For us, with no free trade business, craft is having some impact on our bottle sales in supermarkets. It’s about finding where to sit – to compete against craft brewers or to join them?”

Toby Heasman, head brewer at Hall & Woodhouse

The reality on the shelves of the major supermarkets is that craft beers are taking over ever more of the space previously assigned to what is classed as ‘Premium Bottled Ales’, which is where Hall & Woodhouse has placed a great focus since it sold its free trade business to Marston’s in 2008.

And it has done very nicely from this retail business, which sits alongside its pubs division – spanning 50 managed and 140 tenanted pubs – predominantly in the south of the country including a smattering in London.

But times are changing and H&W’s initial foray into craft land – led by An American Venture – is a series of four limited edition beers to be launched over the next two years that aim to mix things up a little and show that Heasman and his brewing team are up to the task of a bit of experimentation.

The US-inspired brew combines American classic hops Amarillo, Cascade and Mosaic into a 6% brew that wears its bitterness lightly and has an appealing soft carbonation. It is noticeably sold in brown glass bottles in contrast to much of H&W’s output in clear glass. This is a sensible recognition that the hop subtleties in this particular brew deserve fuller preservation.

It will be followed by Belgium Flair, which Heasman says involves some experiment with yeast strains, German Precision and finally English Reserve. Each of these beers will retain the Badger representation on the label but it will be faded into the background on the artwork.

“It’s an endorsement by Badger because we want it to be recognised as part of the Badger family. We feel the need for keeping this connection for when people are buying the beer [in the supermarkets],” he explains.

Original brewhouse

An American Venture is one of seven new beers to be launched this year which will also involve the introduction of 330ml bottles into the range. It was considered for An American Venture but is being held back until a stout is made available later in the year. This will be a double change for the firm because the bottle size aside, H&W has rarely brewed a stout – its limited edition Sturminster Beast from last year being an exception.

Other craft-type developments include the likely keg release of a beer named ‘Owlers’ – that refers to a smugglers term – which marks something of a departure for the brewery, which has done very little keg. Large volumes of keg beer would need some changes at the brewery where 65% goes into bottles, 20% into can and the remaining 15% is cask – that is distributed exclusively to its pub estate.

Such experimentation is also evident in the tiny 120 litre pilot brew kit that sits within the enormous H&W main brewing facility (from where 14-18 million bottles emerge annually – of which 50% are top-selling Fursty Ferret).

Pilot brewing kit

“It’s nothing flash but we can trial and play around. We do 15 brews per year and recent beers have included a wheat beer, rye beer and gorse flower beer,” says Heasman, who adds that five of these small run brews will be available at the forthcoming Hall & Woodhouse Dorset Beer festival, held in the grounds of the brewery on June 24. It will also feature beers from other, lesser known, brewers in the county.

Glynn Davis, editor, Beer Insider







Around Town with Amateur Drinker


Great Northern Railway Tavern

I could have made this point at almost any time but after collating my notes for this month the growth in the beer scene appears to have moved up to whatever level is above staggering,

Brewers are increasing their on-site sales, so March saw Hammerton announce that they had taken over the Wig & Gown on Holloway Road, Bohem opened on Myddleton Road, whilst Fuller’s has renovated the Great Northern Railway Tavern in Hornsey, which now has many guest keg-lines (Siren, BBNo, Magic Rock, Weird Beard amongst others on my visit).

If it’s a success, and it will be, they are planning to roll this concept out across London. Successful independents continue to add new sites: The King’s Arms/Earl of Essex only recently added the Mermaid in Clapton, and are now opening the Axe in Stoke Newington.

Taps at Great Northern Railway Tavern

The Three Crowns has re-appeared in Old Street (briefly it was re-named Hill & Szrok, under the same owners), and this time it has a decent tap-list (15+, including Kernel pale ale on my last visit), which means that within a cricket ball throw of the Old Fountain, and including the Draft House, there is now a total of 50-60 separate taps!

The veterans among them are getting ever more exotic so that the Old Fountain had both original and the grapefruit Mike Hess Solis Occasus on tap this month.

Big retail is muscling in too: Social media was awash with Tesco discounting Stone Berlin IPA to £1.32 a can. The brewer later claimed this was a mistake, but the pressure is only one way. And this when I have lost count of the number of independent outlets (for instance Kill the Cat in Brick Lane is walking distance from the already excellent King’s Arms & Mother Kelly’s).

Finally, there was a question about Jaipur on a mid-afternoon network TV game-show! It’s wonderful for the consumer, and the demand is clearly there. However, it is very unlikely that demand, supply and distribution all manages to grow perfectly in synch so it’s hard not to fear gluts or shortages and queues or shutdowns (especially if supermarkets use craft beer as the loss-leader that they have done with wine).

Siren had a big push with TTO’s at Euston Tap, The King & Co., and CBC Clerkenwell, which I attended, and which showcased Maiden, their barley wine. They had barrel-aged versions in tequila (odd, it didn’t really work), red wine (good, but felt a bit like someone had just poured red wine into the beer) and rum (superb), as well as launching the normal 2017 version. Strictly speaking it’s probably a bit young, but this was my favourite, and I’ll be interested in how it develops over time.

Tempus at Beavertown

The much-vaunted Bourbon Milkshake, an 11% Imperial bourbon barrel aged milk porter with vanilla, muscovado and honey was way too sweet for my taste. My favourite amongst a stellar line-up was Acid Jam, an imperial kettle sour aged in bourbon and red wine barrels, which was glorious. The same night they also had on the Firestone Walker Luponic 005, a textbook American IPA.

Beavertown held the 4th Tempus event with matching food from Filipino-inspired pop-up BBQ Dreamz. Kneadless Violence, a Kvass (Slavic and Baltic style, from rye bread) with E5 Bakehouse, was light and refreshing and just 1.9% ABV. Uptown Monk, a rye Tripel collaboration with Brouwerij Alvinne, aged in Juracon barrels, was warming and peppery, with a touch of fig.

The stand-out was Brosé, a sour ale brewed using the Pomace (the remains of the grapes after they have been pressed) from Forty Hall and Davenport English vineyards. It produced an exceptional hybrid beer/rosé, hence the name, which was crisp, tart and fruity. Overall although the event was more of a food-and-beer matching evening, rather than just a beer tasting, it was as enjoyable as all the previous Tempus events.

More Tempus at Beavertown


Four days later, Beavertown launched 2017’s Bloody ‘Ell blood orange IPA. This year’s was wonderful – probably the best so far of this much-loved seasonal. However, given the quantity they have produced (a few days later Twitter was full of pubs and shops announcing they had it, including 15 cases at Oddbins in London Bridge) with launch-parties at pretty much all major cities, it seemed rather silly not to also simultaneously launch at other trusted London venues.

They couldn’t have foreseen the glorious weather, which would have added to the crowds at the sun-trap of the brewery, but after barely an hour it was one in/one out and the venue was packed. They should have opened earlier to spread out demand, ticketed it or done a simultaneous release. Great beer though.

 Siren launched its new Yu Lu, at Sutton Arms, in EC1, which, as per the above, I wouldn’t have written a year ago. It is an Earl Grey and lemon zest, loose leaf pale ale, and very refreshing at 3.6%.

 On the same day, The Bottle Shop had a spectacular West Coast IPA party: The Belching Beaver Blood Orange Vanilla IPA divided opinion as the vanilla characteristic was too dominant, whilst the Allpine Windows Up IPA was clean, tropical, and citrusy. However, the hoppy and fruity Green Flash Palette Wrecker DIPA was gorgeous and the undoubted star of the show.

Fun at The Bottle Shop

V13, the final release in Cloudwater’s DIPA series, was a revision of their birthday special, which hadn’t been included in the countdown. Unfortunately, it wasn’t one of the best of the series, and suffered from being up against the Palette Wrecker. I was far more impressed with a can of their wonderful Bergamot Sour, which was refreshing, packed with lemon flavour, and, at just 3.5% ABV, perfect for summer drinking. The bells of St. Clement’s would happily drink this and their Seville orange sour, also back in can for the summer.

Evin hosted an intimate Kernel tasting at The Bottle Shop. He was honest both about the first beer, a pale ale wasn’t up to their normal high standards and in his criticism of most collaborations, as when they are one-off, there is no ‘learning by doing’, as a recipe is tweaked and improved.

I think this is relevant for normal pub beers, when consistently good is the aim. At events, I am looking for different and unusual, and accept volatility in pursuit of the excellent. Collaborations are often over-hyped, as both breweries market them, thereby doubling the advertising. I dread to think how many tweets will be sent about the forthcoming Abbeydale/Magic Rock/Siren/Northern Monk 4 Degrees of separation IPA!

It was fascinating to hear how the Kernel is run as a co-operative, with everyone sharing job and taking it in turns to brew whatever they choose. Clearly this is not scalable but I’m delighted with the present results. As always, their London Sour (this time raspberry) was super, band the Imperial Brown Stout also delicious.

Mason and Company advertised a 10th Birthday special Moor TTO, with owner Justin Hawke. However, I was tad disappointed to find that that were on only 7 of the 20 lines: surely a ‘takeover’ must at the very least have a majority! Old Freddie Walker is a glorious Old Ale which has been difficult to find in London, and the vibe was very friendly.

Mother Kelly’s showcased Het Uiltje from Haarlem, in the Netherlands. I enjoyed M’n Opa M’n Opa a hoppy APA, Big Fat 5, a well-balanced and clean DIPA, but their best was In Between Agendas, an imperial black lager, in collaboration with Pohjala, with hints of passion fruit.

Marble returned to The Bottle Shop. I was a big fan when I first became interested in beer 4-5 years ago, but haven’t seen them nearly as much in London recently. My memory, which, admittedly, may be as hazy as a New England IPA, was of excellent, traditional, cask ales. This list was modern keg, with the Damage Plan IPA not suffering one iota in comparison to it the illustrious Jai Alai from Cigar City, which was also on tap, and thankfully not as extortionately priced as the imported cans normally are.

Finally, whilst I blog about beer, with occasional NFL references, I was lucky enough to see Peter King, the doyen of NFL writers, speak at The Mermaid Theatre in Blackfriars. Anyone who is interested in the NFL should read his weekly MMQB column, which also features his regular beernerdness column, and I hope he enjoyed our vibrant scene as much as I do his journalism…

Reporting from the front-line – Amateur Drinker manages to get along to all the beer things you’d like to but couldn’t.


Never Gonna Give you Hop


Pop legend from the 1980s Rick Astley (of ‘Never Gonna Give you Up’ fame) and beer legend of today Mikkel Borg Bjergso (of Mikkeller brewery fame) came together in West London last week to launch a collaborative beer.

Or they would have done if one of them had not been the regular rock star and pulled out at the last minute. Due to an illness suffered by Bjergso it was left to Astley to manage things solo with a down-to-earth affable approach that many musicians – and brewers for that matter – could learn from.

The location chosen was the Draft House bar in Hammersmith because Astley was due to attend a sound check at the relatively nearby Royal Albert Hall that afternoon ahead of a big performance in the evening as part of a world tour that has brought him back into the pop star firmament.

Not that you’d know it though because he seemed to be the least flustered person among those in his (modest sized) entourage doing things that those people do. No apparent pop star ego was in evidence as he completely dismissed having contributed any real input into the collaborative beer – Northern Hop (a 4.7% lager) – he’d helped produce.

“A year ago Mikkel came to me about brewing beer and I stressed that he shouldn’t expect me to offer anything up. I took it just as a fun thing,” says Astley. Hold on, how come there was even an approach in the first place because Astley and Bjergso do look a rather odd pair to hook up.

Apparently the Mikkeller founder is a massive fan of the musician dating back to his early years listening to those big Astley hits of the 1980s. A link had occurred because Astley’s wife is Danish and their daughter is studying in Copenhagen and enjoys drinking in the Mikkeller bars. She gave it the thumbs up to dad and with a little investigation he “liked the way they do things [at Mikkeller]”.

Even though he is a busy man Astley says it was difficult to turn down the approach because he knew it would be something good to experience: “I don’t see it as a business venture. It’s not about the money. My wife and I look back and things are all about the memories. The easy option is to say ‘no’ to everything. But if you say ‘yes’ then you’ll get the rewards.”

The first time the pair ‘met’ to talk about the beer was in Los Angeles when Astley says they had a “fun night out”. He adds: “He’s an interesting guy. When we initially did Facetime I said ‘wow!’ He’s not the type to gush until he trusts you. He’s very much into the beer and there is a mad scientist about him. But then if you’ve spent your life brewing beers and you’ve made however many then what stops you doing more? It’s like writing a song. We’ve heard all the songs so how do you make it interesting? What is everyone else doing?”

Astley found out what it takes to keep pushing the boundaries when he undertook various tastings with Bjergso and visited the famed Belgium-based brewery De Proef, which makes the majority of the Mikkeller beers.

He found beers such as one brewed with pears for a Danish chef that he could not drink: “In Belgium I tasted some odd drinks and some did not make sense to me.” Whereas others opened his eyes to the possibilities that he had not considered were even options as far as beer styles were concerned.

Rather un-pop star like he is more than willing to admit his limited knowledge when it comes to beers – which had mainly involved drinking Doom Bar in his local The Bell in Hampton Court. But this has been gradually changing.

“I drink there with a friend and we’d get uppity if the Doom Bar was not on. Usually I’d have one and a half pints and then leave because I’d also like a couple of glasses of wine at home. But now if there is nothing on but the regular beers then I’ll have a gin and tonic,” he says. Astley’s beer drinking on tour has also broadened out as he says the tour manager will “scope out the beers [beforehand] that are on the bar”.

Despite the myriad potential styles for his collaborative beer Astley chose not to deviate too far from the norm: “I wanted a beer that I could down, out of the fridge, and drink it with friends.” This sounds rather sensible to me because it fits absolutely perfectly with the character that was to be found launching Northern Hop in Hammersmith.

Glynn Davis, editor of Beer Insider


Beauty of brewing with independence at Box Steam


The brewery was born out of a passion for making beer, not money. My family was in the pub business, so we were close to our customers and we knew what they liked in a pint glass. We were buying casks of great local beer from down the road and when the opportunity came up to own the company that was supplying us we jumped at the chance to control the whole journey from maltings to pump and bottle, if you like.

We’ve been crafting real ales for over 10 years and remain staunchly independent and when someone asks me why Box Steam Brewery is so proud to be independent, I suppose there are four main reasons – we can still innovate, we can be agile, we can commit to quality, and we’re still rewarded with personal pride.

We don’t have to restrict our product development. We can explore the possibilities of brewing and try new recipes on a smaller scale than the big boys. We have a loyal following and a range of core brews we’d never change, but we also produce an experimental monthly special edition. This give us the chance to have some fun, try new varieties and combinations and test new beers with real drinkers in real pub settings. It also means we can indulge our passion and avoid the monotony of churning out the same old beer every month.

We don’t have a huge budget for market research or marketing. You don’t set out as an independent brewer to make a fortune! But being independent, provided your beer is any good, attracts a warm reception and makes creating a community on social media and in your local area a lot easier than a big brand, I think. We put a lot of effort into engaging with beer drinkers and on getting involved in community events in and around Wiltshire, Bristol and Bath. It’s fun, it’s great value brand promotion and it means we’re always listening to our customers.

Because we produce in relatively small quantities we might now be able to enjoy the ‘economies of scale’, but we enjoy the ability to be close to suppliers, close to the ingredients, right on top of the process and close to the final product. We can take our time and make sure we get it right. Our beers aren’t mass produced and blended for consistency. They turn out the same level of great because the same people are dedicated to making it so every day. Cask or bottle, the liquid inside gets our undivided attention every batch. I’d hate to think of anyone buying a bottle of our beer, taking it home and being disappointed.

Everyone at our brewery has a personal relationship with the beers we send through the gates. That means we can all be personally proud of the contribution we make. Being independent means being able to own the success that comes with being committed to a tradition and a craft. What we make makes people happy every day. It doesn’t get much more rewarding than that and we would swap that for anything.

Andy Roberts, MD of Box Steam Brewery


Lack of equity at Brewdog?


What exactly are these things?

” Equity For Punks : Whether they are punks or not, this certainly isn’t equity.”

Beer Insider has previously raised concerns about crowd-funding and the activities of Brewdog. In particular, it related to some of the brewers’ actions that could potentially reduce the value of the equity (shares) held by thousands of small shareholders who took part in its various fund-raisings.

However, after yesterday’s press release (https://www.brewdog.com/GM290317LTR_Chairman-BrewDog-PLC_13-MAR-17.2.pdf), we can categorically say that those who participated in the Equity for Punks (EfP) scheme did not receive proper equity.

Brewdog announced that they are looking for a new, outside investor, but crucially they are not allowing the original EfP to participate at the same terms. This means that they do not have full pre-emption rights, which would be illegal if EfP was genuinely equity. This not unusual practice in the crowd-funding industry for B-class shares, but they are therefore not equity and should be named accordingly.

There is still room for such arrangements where loyal consumers contribute funds, in advance, for a souped-up membership scheme with generous benefits and discounts.  However, it should be named accordingly. Section 561 (1) of the 2006 Companies Act, on existing shareholders’ right of pre-emption, (http://www.legislation.gov.uk/ukpga/2006/46/part/17/chapter/3/crossheading/existing-shareholders-right-of-preemption) is very clear:

It states: “A company must not allot equity securities to a person on any terms unless—(a) it has made an offer to each person who holds ordinary shares in the company to allot to him on the same or more favourable terms a proportion of those securities that is as nearly as practicable equal to the proportion in nominal value held by him of the ordinary share capital of the company, and (b) the period during which any such offer may be accepted has expired or the company has received notice of the acceptance or refusal of every offer so made.”

This means that if you think the Board is issuing new shares too cheaply, and, consequently, undervaluing your present investment, then you have the right to also buy at that price, thereby ensuring that the value of your investment is not reduced.

Even in a perfectly honest world, this process is important as we all have different opinions of the value of a stock that is not actively traded. It is absolutely and fundamentally vital in the real world, as it is a crucial guard against malpractice.

Without it, there is nothing to stop a Board massively undervaluing a company when selling to a new investor, who then gets it too cheap at the expense of the original providers of equity. This illegal profit can then be split with the Board, cheating the first round of equity investors.

Let me be crystal clear – I am not suggesting that Brewdog’s issuance is in any way fraudulent. However, it is basic text-book corporate finance that this structure could, in the future, be exploited fraudulently by a different issuer.

Others have commentated that the new terms look very generous. Indeed, I agree, that by giving the new investor a preferred return preference of 18% per annum, they essentially get the rights of debt to be paid first, whilst befitting from the equity value of any outperformance. However, we don’t know the price they are paying. Crucially, it only becomes a real issue as the present investors don’t get the opportunity to participate in the same deal.

To summarise, I do not know the terms of this deal. Indeed it is possible that the investor is paying too much, which actually creates value for the existing investors. However, they do not know the price and without pre-emption rights there is no way of them acting.

Pre-emption rights are a crucial safeguard against an original equity investor being defrauded. In corporate finance terms, they are a necessary, legal condition for the definition of equity.

Crowd-funding is being marketed to very small investors who probably do not have much finance experience. They think they are buying ‘shares’ but if their pre-emption rights are being widely removed as an original condition, then they are not getting what any reasonable person would view as equity.

Many of these crowdfunding ventures are a potentially mutually beneficial customer loyalty schemes. On that basis they must not be marketed as equity and I strongly suspect that the FCA (Financial Conduct Authority) will be along shortly to inform BrewDog, CrowdCube et al of this very fact.

Amateur drinker, serious investor


Around Town with Amateur Drinker


I have always agreed with Hunter S Thompson, that, due to the NFL season, February is the most gloomy and depressing month: In January, we get the excitement of the playoffs, but, after the climax of the Super Bowl, you then face an agonising 7 month wait for the action to start again. Fortunately, in 2017 the beer events have flowed thick and fast, providing a measure of compensation.

“5 go to Beavertown” saw them celebrate their birthday with 5 other brewers, each of whom brought their own stock, and, a collaboration they had brewed with the hosts. Those beers followed the Enid Blyton theme: The best were Anne (Lost and Grounded, a Lemon Ice Bun Belgian Ale), Julian (Basqueland, a Patxineta Brown Ale with almond lemon zest, vanilla and cinnamon) and Dick, (40ft, a barrel-aged Lichtenhainer, which was tart and subtly smoked. They also re-brewed Double Chin, the excellent doubled Neck Oil.

Unfortunately, we were given Craft Master glasses which have no stem, so that your body-heat warms the drink as you hold it. Even worse, these were the mini-version so you could not fully get the aroma of the beer.

The logistics were not disastrous, but noticeably poorer than at the, admittedly perfect, Rainbow Project and queues did start appearing, whilst a few beers seemed to ran out relatively early. Possibly they were also a little self-indulgent: I fail to see why there were board games on the tables, let alone a fully-functioning Subbuteo pitch. People attend for the beer!

Given this, there was some stunning news for their Extravaganza, which incidentally Hunter S Thompson would be pleased to know starts the day after the NFL season kicks off, as the Saturday session sold out 6 months in advance! This is astounding, but given that 400 tickets remained the day before, the total is potentially frightening: Caps & Taps tweeted that 4000 tickets were originally available- I don’t know whether this is in total, or per day, or, indeed, the accuracy of the number.

Firstly, this represents staggering growth given that 18 months ago, Rainbow Project was turn up on the door. Secondly, I am very apprehensive about how they manage that many people: Even if there are 50 different brewers, each with their own separate pouring station, that still means that if 4000 tickets were sold, there is an average of 80 people per station. As some stands will clearly be more interesting on the day, it is very hard not to fear significant queues.

The beer is undoubtedly going to be sensational so I hope I am overly pessimistic. Wild Beer held a roadshow at The Three Johns, N1 to promote their crowd-funding offer, for which they specially brewed Cloudy Crowd, a New England IPA (NEIPA?) and Spicy Crowd, a Thai-spiced pale ale.

Unfiltered keg Pride at CBR

Craft beer in the UK is reminiscent of the internet in the 90’s in that alongside spectacular growth (see Beavertown tickets above) there will likely be many individual failures alongside some spectacular successes. In that case, what really matters is the specific talent and whether we are 1995 or 1999 in the analogy.

Full disclosure in that I am extremely likely to relinquish my amateur status and invest as I think we’re closer to 1995 and I like the products and people. A problem for craft beer financing is that heart (to help an industry they love) and head (return) investors have diametrically opposed views on a buyout from ‘big beer’ (see Camden).

I hate the phrase, but an interesting ‘3rd way’ was taken by Hawkshead this month, who sold a majority stake to Halewood, a drink conglomerate that is still basically independent, allowing “significant investment without being absorbed into ‘big beer.”

CBR is now a strange curate’s egg of an event. It is more of a trade show for the brewers to advertise their names, rather than a consumer-focused beer festival. Therefore, most of the Premier League (for instance Cloudwater, Beavertown, Kernel and Magic Rock) don’t need to attend. This leaves a lot of new, tiny brewers alongside some ‘faux-craft’, and trade stands, such as Powderkeg. (As well as Craft Master glasses again!)

However, if you know where to look there was still some great beer available (Indeed not even just know where to look- no one would dispute that Moor are part of the elite):

The Brewers’ Association offered rare American bottles and cans (Saugatuck blueberry maple stout, like American style pancakes, Jolly pumpkin No Ka Oi, a wild ale with a hint of lime and berries and Epic Tart n’Juicy a sour/IPA).

Christine and John Cryne (left) on the BA stand

Firestone Walker brought the outstanding Walker Union Jack IPA whilst Ska had Modus Mandarina, an orange IPA which I’d loved in a can and, given that, was slightly disappointed with on keg. Three excellent, but punchy, beers: Brew By Numbers 14/04 Tripel and 55/04, their latest DIPA, an Edge Triple IPA, excellent but 12% is maybe too strong for a festival?

Finally, it was good to see John Keeling, correctly honoured on the front-cover of the festival magazine for is Frankie Knuckles role as the Godfather of UK craft

John Keeling, the Godfather

The Bottle Shop had a Scandinavian theme this month for their TTO’s. Firstly Mikkeller (favourite was the Nelson Sauvignon Belgian Ale) and War Pigs, although here most action came from a surprise guest appearance from Cloudwater with V12 and a special 2nd birthday beer which, rather superfluously, was yet another DIPA.

Neither were as good as the V11. Secondly To Ol with their famous Sur Citra wild ale, and, also the fruity Mr Blue and Mr Pink. Finally, Omnipollo (Mazarin APA, Nebuchadnezzar DIPA, Selassie, an Ethiopian coffee imperial stout) with Dugges (mainly fruity beers, which my partner loves them but I find a bit sweet, with the show-stopper Mango Mango Mango, a Stillwater wild ale collab that does exactly what it says on the tin).

Siren launched their new DIPA, Hop Candy, at selected bars, including the Old Fountain.  It felt boozier than the indicated ABV – I’ve often wondered how scientifically accurate these are in the craft beer world: Smaller brewers making lots more variety is fantastic but might decrease the accuracy of measurement compared to big beer with more expensive measurement devices and homogenous output?

The King’s Arms hosted Brouwerji Kees and their amiable founder Kess Bubbermann. The standout brews were Anniversary 2, a Quadrupel brewed with walnuts, Lvstro, a smoked imperial coffee porter, and the caramel fudge imperial stout.

Finally, as I started with a sporting theme, I’d note that on Saturday the vagaries of the FA Cup draw have created the London Brewery Bowl as N17 entertain SE16.

Reporting from the front-line – Amateur Drinker manages to get along to all the beer things you’d like to but couldn’t.


Around Town with Amateur Drinker


Rye on the Prize x 2

January has been a month of intrigue. There was Sky Sports’ reporter Jim White with ‘Arry Redknapp winding down the window of his 4×4 to lie about players he will, or won’t be signing. This year the beer world caught up: Gregg Irwin left Weird Beard, despite being a co-founder, Georgina Young took over as Head Brewer at Fuller’s (a surname that would doubtless have briefly interested the Competition Authorities) and Jen Merrick left Beavertown. 24-hour Sky Booze News cannot be far off…

On the drinking front, Left Hand brought the first keg of Rye on the Prize, an imperial red rye ale, to the UK and poured it at the Prince in N22. Generously we all got a free half, but it was excellent and I gladly carried on paying for it! Being the sister-pub to The Duke’s Head in Highgate, The Prince has an excellent pedigree, and, unsurprisingly, had the same unpretentious mixture of locals and great beer.

They have a permanent tap dedicated to the nearby Bohem Brewery, and Sparta, their dark Czech lager was superb. The pub intends to brew on-site, which will be challenging: The Earl of Essex had to stop, as there wasn’t enough full-time work for an ambitious brewer.

Ratebeer is a useful tool, for instance, if I do not recognise a new beer. However, other than to mock (Craft Beer Co, N1 isn’t even the best place for beer in Islington, let alone amongst the best in the country), I don’t know any actual drinker, as opposed to a brewery social media manager, who pays any attention to their annual awards, which came out this month.

Last year I bought 2014 Old Chimneys Good King Henry Special Reserve imperial stout, commonly known as the highest rated UK beer on Ratebeer (a fascinating insight into beer-rating, brilliantly told by the always excellent Boak and Bailey (Click here) which I finally cracked open: There is no hoax and the beer is lovely, but it’s not the best beer in Britain.

Caps and Taps, hosted a “Hunt the Pliny” night, a blind tasting of three IPA and three DIPA, one of which was the treasure. This was a brilliant, intimate event hosted by the extremely friendly owners in which unsurprisingly I recognized most of the guests! It was fairly easy to distinguish between the styles and fortunately (statisticians would point out it was then only a 1 in 3 wager) I could identify the Pliny, a historic beer.

Even better, it is now not on a perch of its own, and there are many other magnificent DIPA’s available. Overall this was wonderfully organized: a fantastic evening amongst like-minded people.

BottleShop had three great events:  Juice Night was a celebration of hazy East Coast style IPA’s: It was incredibly impressive how different each of the four Stigbergets were, even though were the same style and strength. The Cloudwater v11 was sensational: they have tweaked v10, and the result was their best so far.

Secondly, AmeriCAN, a dreadful pun, but a brilliant night, in which they showcased their new cold-chain import process for cans from the States (geddit?). The usual favourites from Mike Hess, Modern Times, Ironfire, Green Flash and others were available at steep discount to takeaway on the night, which necessitated the biggest suitcase I could find (Seriously, it was big – Ed).

Thirdly, Brewski, from Helsingborg in Sweden visited. I enjoyed the Passionfeber IPA, but the standout beer was the outstanding Mangofeber DIPA, which I had previously raved about from the American Bottle Bar at GBBF (Click here). It is however incredibly deceptive at 8%!

The same evening Brewdog, Camden hosted WarPigs, but fortunately the beers were still available the following afternoon: Lil’ Drunk Baby, session IPA, California Steamin’, a California Common lager, Lazurite IPA, Big Drunk Baby DIPA, all truly whetted my appetite for Copenhagen in May!)

Jolly Pumpkin’s beers were showcased at various BrewDog venues, including Clerkenwell. Unfortunately, head-office decided to politicise the event, as it occurred on Inauguration day. I do not wish to hear the un-nuanced political propaganda of a bar-chain (especially when they demand every venue expresses the same opinion) whether it be on this issue, or from the opposite spectrum, Wetherspoon’s views on Brexit.

Moreover, I have no doubt that, just as the latter harvests all the advantages of the Single Market whilst blathering on about the evils of the EU, Brewdog’s US operations will happily trouser any corporate tax-cuts that the new administration makes. (Furthermore, nobody appeared to notice that Jolly Pumpkin are from Michigan, a Democrat state since 1992 but which crucially swung in 2016).

Fortunately, the customers completely ignored it and concentrated on the beer, which was excellent: Bam Biere Saison, Fuego del Otono autumn beer, La Roja, a sour red and my favourite the Cucurbitophobia gose.

Less successful was their Burning Sky event two weeks later. There was nothing wrong with the beers which were as superb as always. However, as the list was similar to that at the BottleShop just before Xmas, so the vastly increased mark-up really stood out. On a Saturday, why start at 15:00, and not the much more sensible 12:00 that they had originally promised? Most damningly (especially given the premium pricing structure) were that two beers were still on from the above Jolly Pumpkin event 15 days earlier.

After last month’s announcement of an expanded LCBF, Beavertown raised the stakes even further with Extravaganza, priced at the psychological £50 prize-point that Craft Beer Co so embarrassingly used for London Beer Carnival, before they cancelled it in September 2015.

Back to Beavertown

The brewery list is the best yet for the UK, although it is a tad disappointing that they have merged in the Rainbow Project, rather than having it as a stand-alone event. I have bought tickets for both days: I really hope that they concentrate on the logistics: It was the queues that destroyed the 2016 Valentine’s bash, and their absence that really made last year’s Rainbow.

(I enjoyed their latest Tempus on tap at Duke’s: El Mariachi, a Tequila barrel-aged Gose and Moonshiner, Berliner Weisse aged in bourbon. The Bloody ‘Ell seems late this year though?)

Burns night at the Auld Fountain was great fun, with Cromarty AKA IPA the stand-out, and Fierce Beer Cranachan Killer the most interesting. Separately, a quiet Saturday half in my local was interrupted by the Five Points pub-crawl, full of friendly and familiar faces on their first stop.

The crawl included The Fountain, Wenlock Arms, Earl of Essex and Three Johns. I haven’t mentioned the Wenlock before but it is a fantastic locals’ pub, highly regarded for years by CAMRA, for the quality of their cask, and was a welcome oasis on Xmas Day!

Pressure Drop announced they would be moving to a new 6,000 square foot unit on the same industrial estate as Beavertown. This givens Tottenham six breweries, which will become seven if Spurs follow through on their promise to brew on-site at their new stadium, although why is this necessary with the six available to supply? Hopefully we will not be talking about overcrowding in N17 at Lockwood Estate, so please nobody mention “T******** B*** M***”!

Life’s too short to queue

I read a frightening article in the NY Times (Click here), on people queuing overnight for 11 hours for the latest Other Half, especially as I remembered how disappointed I had been with their beers in late 2015 (Click here).

Finally, this is the time of year we must put up with pubs constantly tweeting that they are showing the Six Nations, as if it were some sort of unique badge of honour, rather than free-to-view for all on network TV. Please stop wasting your time and mine, and instead publish the current tap-list.

Reporting from the front-line – Amateur Drinker manages to get along to all the beer things you’d like to but couldn’t.


A little bit of Bohemia in North London


Bohem Brewery founders: Zdenek Kudr and Petr Skocek (l-r)

When he found the price of beer increasingly too expensive and believed the quality to be deteriorating the answer for one North Londoner was to start brewing his own.

Although living in the north of the capital Petr Skocek is actually a native of Pilsen in the Czech Republic so he is steeped in beer and it is therefore not so surprising that his choice of first style of beer to brew was a Pilsner.

Production of what became Victoria Pilsner (4.2%) officially began in May 2105 when he teamed up with another Czech native Zdenek Kudr and they took on the lease of a tiny retail unit as the base for their brewing venture that they named Bohem Brewery.

Bohem Sparta in The Prince, N22

My recent visit to the brewery was not prompted by Victoria but by the second beer to come on-stream – Sparta (5.4%), so named after the Prague-based football team – which Skocek describes as being rather Dunkel-like or half-lager-esque. It’s certainly a bit of a mongrel, with its unusual combination of Pilsner and Munich malts mixed in with East Kent Goldings and Saaz hops.

It was during a visit to The Prince pub in London’s N22, around the corner from Bohem’s site, when I discovered that Skocek’s unfiltered Sparta delivers a wonderfully chewy, full-bodied flavour that has its bitterness but this is combined with a lovely offset of caramel sweetness. It’s deliciously addictive and whereas bands often have problems with second albums the pair at Bohem have certainly released a winner with their follow up to Victoria.

Apart from The Prince, distribution of Bohem’s beers is pretty limited at the moment – with Alexandra Park FC taking kegs and individual customers buying its 18 pint kegs that maintain the carbonation levels throughout the pour.

This is just as well because the pair are only brewing part-time – twice a week with an output of a modest three barrels. However, bottles are just about to be made available and the big news is that a second retail unit has been taken that will house a tap room, which at only 20 sq m will be run on similar lines to a micro-pub.

“This will move us forward. At the moment it’s just a hobby whereby we start the brew before going to work and then finish it off after work,” he says.

Skocek with modest brew kit

The tap room will be a showcase for Bohem, which Skocek admits has him presently working hard at creating some more beers as the idea is to have six on the go when the tap room opens in a couple of months.

Just off the production line is a rich Oatmeal stout (5.5%) that has a smooth mouth-feel that almost convinces the drinker that it has lactose in the mix. There is also a Belgian blonde beer that is part way through its development with the early iteration having a typical candy sugar characteristic but without that distinct Belgian yeast component. Skocek says it will eventually be dialled up to 7%. Another beer will be a lighter lager with less bitterness than Victoria and a slightly heavier 4.8% ABV.

The tap room will certainly make a big difference because Kudr fully recognises that the way to be profitable as a micro-brewery is to sell as much of your output direct to the customer rather than through third-parties.

Early bottles and Be;gian blonde on trial

“We want our own pubs. It’s the best way for small breweries to operate. For us it is more profitable to sell two kegs direct than it is to sell nearly eight to a pub. There are three-and-a-half times more profits this way,” he says.

Such profitability is absolutely vital of course for the longevity of Bohem, as it is for all start-up breweries, and it will ensure that I can continue to enjoy the delights of Sparta.

Glynn Davis, editor of Beer Insider