Beware the Ides of March. March 2019 was the most momentous month in London’s recent beer scene, and almost all the news was bad. The biggest was undoubtedly the demise of The Bottleshop.
It is no secret to anyone who has been reading this blog, that I regarded this as the best venue in London, and I must make full disclosure that both myself, and the Editor, as Bohem Brewery shareholders, lost money due to its collapse.
There were good people at TBS who knew a lot about, and loved beer. So how could it go so wrong?
There are doubts about the beer distribution model in the modern digital age, which has ruthlessly removed middle-men such as high street travel agents. Brewers can directly supply venues much more cheaply. Moreover, when breweries become successful, they take distribution in-house. This leaves distributors with small young brewers or foreign imports. The latter have a structural problem, in that UK beer has improved so much over the last few years, reducing the premium that foreign can command and the present issue of very weak sterling since the Referendum.
However, overriding it all is the Crowdcube problem. They are not fit for purpose. Any form of funding , be it bank loan or equity investor should, at times, be a pain, as the capital-providers act as a necessary constraint on, and source of advice and experience, for the business, just as a good parent must discipline and guide their children. Crowdcube impose no discipline and accept ridiculous forecasts, fraudulent accounts and ludicrous valuations.
As written, (http://beerinsider.com/theres-no-fun-in-crowd-funding/) last September.
“Hence, a basket of investments in all these issues is guaranteed to lose money. It’s possible that a single company might be so good that it produces decent returns, but if that were the case, why are they using such a fringe platform to raise funds when there are so many other ways to bring in money? I would advise beer-lovers to follow their head, and not their heart, and avoid all brewery crowd-funding.”
It was very sad to see these words prove so prescient at a venue I loved.
The next piece of news was almost as bad: Magic Rock sold to Lion Nathan Ltd, purveyors of dubiousness such as Toohey’s and Castlemaine XXXX, and themselves a mere subsidiary of Kirin, the giant Japanese macro-brewer. Kirin, who jointly own San Miguel and have a quarter share of Brooklyn Brewery, is themselves a member of the Mitsubishi UFJ Financial Group (MUFG), which includes the world’s 5th largest bank by assets.
When Lion acquired Four Pure in July 2018, they said that it would be its “primary focus here in the UK and as their sole production brewing facility” (https://www.thedrinksbusiness.com/2018/07/australias-lion-acquires-londons-fourpure-brewing/). So, that promise lasted nine months, which tells you all you need to know.
Four Pure was always run as an investment proposition, and did not give the normal bullshit that “nothing will change” when they sold out. They did good beers well, but there was nothing particularly special or different. Magic Rock, however, have been true innovators in the scene: Unhuman Cannonball, with its annual launch becoming one of the first to produce US-style queues. Salty Kiss was a very early example of a core gose and the various different BA versions of Bearded Lady imperial stout were exceptional.
Will they now all be brewed to the same quality aspirations and excitement of Castlemaine XXXX? If anyone really doubts this, then, after I have sold them a bridge over the Thames, they can look at Beavertown’s Bloody ‘Eel, another great beer whose annual launch was a true event.
It has been downgraded from an IPA to a Pale, with the ABV cut from mid 7% to just over 5%. Bloody ‘Eel was as seasonal as blood oranges are seasonal. Now it is a core beer, being produced in industrial quantities with industrial ingredients and sits forlornly and unloved in my local Waitrose, wasting away at room temperature.
In the latest round of Fuller’s and friends, brewed late 2018, one of the collaborations was Fuller’s with Magic Rock. At that time, they were two great breweries. By March 2019, they are part of the macro-giants Asahi and Kirin.
Earlier in the month, Tesco had announced that it would be stocking Magic Rock, Overworks, Wild Card and Four Pure. The last of those, along with Beavertown, went into Waitrose, last year, just before they both sold out. It isn’t a definitive sign but it should set alarm bells off, for three reasons: Supermarkets and their suppliers rely on wafer-thin margins offset by vastly bigger volumes, which often require investment in capacity. It means that the brewers no longer care about independent bottle-shops who supported and showcased them in the early days. Finally, until a major retailer invests in cold-chain, the quality of the beer drops dramatically.
To complete the trifecta, Beer Boutique failed. Again, it was a Crowdcube alumni. It raised £375k just 10 months ago, at a valuation of £2m! This is a complete nonsense: companies do not go from £2m to bust in 10 months unless there is fraud or exceptional external circumstances. As there is no evidence of either, the valuation was fantasy.
March also saw Eebria re-file corrected accounts showing £350k losses as opposed to £400k profits! That would be a £750k difference they just missed or forgot about! Again, they are a Crowdcube client. Anyone who invests in such schemes clearly wants to lose their money.
No transfer windows in the world of brewing and March saw a big move as Georgina Young went from Fuller’s to Bath Ales, now part of St. Austell, where Roger Ryman oversees all brews. He is a friend of this blog and helped Bohem brew the excellent Brut lager Otaker, (http://beerinsider.com/bohem-teams-up-with-brewing-legend-roger-ryman-for-lager-collab/), which launched in March.
Anspach & Hobday celebrated its 5th birthday with casks of their five favourite beers at The Old Fountain: Three Threads, Patersbier, Eeepa, Dry Hopped Blond and Baltic Porter.
Siren TTO at The Sutton Arms. Broken Dream stout on cask, with Caribbean Chocolate Cake and the launch of 2018’s Maiden, their Solera-method Barley Wine.
We Brought Beer Clapham shut down although they claimed that this was a local incident, connected to increase rents, rather than a group-wide problem.
Mother Kelly’s launched To Ol’s 2019 Mr. Series: Blondee, a cucumber and lime gose, Blue, an imperial blackcurrant stout, Brown, a double coffee and cookie dough brown, Orange, an orange DIPA, Pink, a watermelon DIPA and White, a DDH Jasmin Tea Pale.
Finally, to end with some light relief, Gregg Wallace visited Carling’s brewery in Burton for Inside The Factory whilst in Midsummer Murders, The Ghost of Causton Abbey, the church is now a craft brewery, but “excitement turns to fear when a man is found boiled to death in one of the vats shortly after a party to launch a new ale”!
Reporting from the front-line – Amateur Drinker manages to get along to all the beer things you’d like to but couldn’t. If you see this man and are tempted to buy him a drink think of the consequences.