Monday 23 September 2019

Irish microbrewers tapping into the craft beer market

Gavin McLoughlin

Gavin McLoughlin

Last month microbrewers were toasting Michael Noonan after the Finance Minister delivered a significant boost for the industry in the budget.

The budget lifted the ceiling for excise relief on microbrewery production by 50pc, meaning the brewers will get a 50pc rebate of excise paid on three million litres of production rather than on two million litres.

The idea, Mr Noonan said, was "to further assist the development of this sector and not to stand in the way of growth".

"Microbreweries in Ireland have been a success story in recent years," Mr Noonan said.

"They have expanded their market share, provided employment throughout the country, and are now making in-roads into markets abroad."

A report commissioned by Independent Craft Brewers of Ireland and launched last week by Agriculture Minister Simon Coveney said the amount of beer produced by Irish microbreweries is growing sharply.

In 2013 their output amounted to some 4.9 million litres, compared to 3.7 million litres in 2012 and 2.6 million in 2011.

The report predicted that output will reach 7.1 million litres this year based on current trends.

Craft beer has taken off in the United States. In 2013 craft brewers had 7.8pc of the volume of the US beer market, and 14.3pc of the dollar share.

The report estimates that this year microbreweries will have 0.9pc of the volume of the Irish beer market, but based US trends the report reckons they can increase their market share five times over in the longer term.

Reuben Gray from Beoir, an organisation that promotes Irish craft breweries, says craft beer is mostly being drunk by young adults.

"But a lot of older people have started discovering it as well, more so because it brings them back to when they used to drink 50 or 60 years ago and they remember that beer used to have flavour," he says.

"The kind of people who really went for it originally would have been people who travelled a lot and discovered other beer in other countries, and found out that it wasn't all the same stuff that we've all been drinking."

The report found that microbrewery production is widely dispersed - by the end of the year there'll be microbreweries operating in 21 of the 26 counties, it estimated.

It said around 50 microbreweries will be operating by the end of the year - 33 were operating when the report was carried out - and that the industry expected to generate over €1m in income tax and PRSI receipts for the Exchequer in 2014.

"Since 2007 it started doubling each year, it's gone from a handful of breweries that perhaps you could have counted on one hand...there's a brewery opening almost every week at the moment," Mr Gray said.

Employment in the industry has doubled since 2011, and the report says that on cuyrrent growth rates a fivefold increase in production could be achieved in six years.

Irish Independent

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