Thursday, 8 March 2018

Who should be allowed as members of SIBA?

SIBA started life as the Small Independent Brewer's Association. Some people don't think that matters. I think it matters a lot.

SIBA was set up to try and tackle a specific problem in the beer industry; the beer tie, and the barrier that creates to access to market for the very smallest of brewers. The organisation has now moved to a place that is trying to be "the voice of British brewing" It is inevitable that, perhaps with the exception of a few like myself, the strongest voices are those of big business.

DDS was invented and then it changed its name to BeerFlex, apparently to reflect the idea that brewers could set their own price. However, us brewers have never been able to set our own price, the Pub Companies do that, and have recently driven the price down significantly to the point it is completely bonkers for us to even consider. Larger brewers, above say 3,000hl, can afford to consider this route to market as economies of scale permit a lower delivered price for the beer.

This is just one example where SIBA has turned away, be it deliberately or not, from the needs of the micro-brewer; the true small brewing business. They are not progressing any actions with vigour that might improve my route to market, but are instead protecting and improving the interests of brewers significantly larger than us.

There are a number of like-minded brewers like myself that feel SIBA is failing to represent the little guy. There were several motions at last years AGM calling for the largest of brewers to be removed from the associate membership category as it was felt very strongly that a disproportionate amount of  influence was being exerted by the big players in the business. Some of those motions succeeded, but the key one, to remove breweries from membership if they were above 200,000hl, was cancelled from the vote due to the success of a weaker motion put forward by myself.

It is my view, from the mood of the attendees at AGM, that the motion to remove completely the brewers above 200,000hl would have been successful had it been put to the vote.

This year there is a motion being tabled that rather than removing the breweries from membership who are over 200,000hl we permit any brewery in so long as it isn't a global brewery1.

Now, that is all very well, and of course any region can submit a motion. The thing that has really got to me is the fact that news of this motion has been placed under embargo; we are not supposed to publically talk about it. However, SIBA exec can email every single member with their attempts to get this motion passed.

Furthermore, and really crucially, SIBA exec have cynically tightened up the rules regarding the organisation of proxy voting2. This is especially important. It is important that for the sake of micro-brewing you do not let these barriers prevent you form voting just because you cannot get to the AGM.

There are around 1,000 SIBA members. The vast majority of them are very small businesses indeed, and yet direction is coming from a few brewers of much more significant size.

Breweries of my size find it very difficult to get to AGM. The costs, once you factor in travel and accommodation, run in to a significant amount of money. Even supposing your little micro-brewer is flush with cash, which he isn't, finding the time to get away from the business is extremely difficult. He or she is already doing 80 hours a week, as head brewer, van driver, accountant, HACCAP author, cask washer, copper scrubber and general all-round dogs body, finding time to get away is often impossible.

With urgency I am calling upon all brewers who are members of SIBA to reject the motion asking for the membership to be enlarged to take in the biggest3 PLC brewing businesses. If this motion succeeds we can be sure that SIBA will move even further way from the interests of the current membership.

Proxy voting has been made particularly difficult it seems. Couple that with a gagging order on us talking about the issue shows clear intent to subvert the course of this particular democratic process. It is your duty to ensure you get your proxy vote set-up up with urgency.

For this reason I have decided to break ranks and ignore the embargo, hence this blog.

Please do not let a few 10s of people dictate over 1,000.
Protect the future of YOUR trade organisation.
PUT IN YOUR PROXY NOW!!

Proxy voting nominations need to be in by 5pm Monday 12th March. IT CAN BE AN EMAIL ATTACHMENT.

Hardknott is happy to act as proxy, please get in touch.

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1I fully expect that the detail of the motion will be pointed out to me: i.e. that only those under 1% of the total UK beer market will not be allowed.

Except there is a clause stating the the board can override that. Considering I have little faith in the board it'll not be long before we see even bigger breweries permitted membership.

2Apparently a simple email is not sufficient to register a proxy vote. It must be a signed letter on company headed paper. I mean, I don't know about the reader, but I haven't got company headed paper. OK, I've got a Word template.. but really, company headed paper?

For clarification, it can be an email attachment, apparently. But then why not just an email? For goodness sake this is what we do most of our business by, very rarely needing an actual wet signature.

3I believe it to be important to point out that SIBA is my only trade organisation. Larger brewers have BBPA and IFBB. One has to question why the largest of brewers want access to our trade organisation, the very trade organisation that is suposed to be protecting us against the largest of businesses. They claim we'll get benefits. Well, I have a lot to say on the supposed benefits of working with large PLCs. It isn't as good as you might think.

11 comments:

Yvan said...

Company letterhead... fucking me, hello 1980s... do they want it faxed? It's a suit organisation for suit businesses. Towing the line for the status quo. SIBA is the anticraft.

Dave Bailey said...

Yeah, exactly.

It is a suit organisation. They do not want mashtun monkeys anywhere near.

One board member said that breweries under 500hl cannot be commercial. Now, it's tricky to be profitable there, but it is possible.

But how dare SIBA have a view on exactly how small a brewery can be? There are moves to limit lower membership. I kid you not.

Wylam Brewery said...

How do we send you our proxy?

fat hipster said...

Seems to have all gone tits up since Mike Benner appeared on the scene.
AGM needs a motion of no confidence in Benner.
They are supposed to help keep members prices sustainable . How do they do that when they agree massive discounts for pubcos without putting it to a members vote.
All like minded members should leave and start a new organisation if they cannot regain control. All resign membership if the big brewers get back in.

Dave Bailey said...

You can email us at beer@hardknott.com with you voting choices.

Please nominate Ann Wedgwood as Hardknott person to represent you (I might not get there in time)

You have to email (or send a papery thing if that's still your way of doing stuff) to sara knox - sara.knox@siba.co.uk

The Proxy Notice must:
🍺 be on your official letterhead paper
🍺 state the name of the member you intend to appoint as your proxy
🍺 contain a statement to the effect that the named member is appointed to be your proxy and
is authorised to vote on your behalf at the AGM
🍺 be duly signed by you or on your behalf
🍺 be received by the Company Secretary by 5pm on Monday 12th March 2018 as stated above
If your Proxy Notice does not comply with the above requirements, the appointment of your proxy
will not be valid

Pete said...

At less than 5000hl/year, am I still considered a commercial microbrewery or am I not? You stated that I am not considered to be commercial by some members on an earlier draft of this post. Have they pressured you to remove this statement?

Cameron Murphy said...

It is now obvious the executive are completely out of touch with the majority of the membership and is now time to start a new SMALL INDEPENDENT brewers association.

All this political waffle and underhanded behaviour is not why I joined SIBA.

SIBA say they cannot dictate prices on DDS, ok but why haven't they applied some sensible rules which been suggested over a year ago like minimum cask order (min 2)? Because they don't care.

FSQ - basically just a £600 additional joining fee for Beerflex/DDS. 1 more year of DDS access and then time to leave.

Very disillusioned brewer.

Dave Bailey said...

Pete,

Not sure where you have me saying that someone under 5000hl is not commercial. I think I might have typed 500hl (five hundred) somewhere, but not on this post. Perhaps in comments on a Facebook group perhaps?

For clarity here is my personal view;

A brewery ceases to be able to call itself a micro-brewery at around 5,000hl. Above that volume you have a business that is at the thick end of a million quid turnover. Contrary to some bullshit out there, most breweries can grow above 5,000hl despite a little bit of bite from increased beer duty because evidence shows some good economies of scale cut in. I could expand on that, but that would be taking away from a proposed future blog post.

I have heard various derogatory comments from various SIBA sources about breweries of the five hundred HL size and less. My thoughts are; how very dare they try to determine how small a brewery is allowed to be!!

One particular acid comment was from an ex-MD of a particularly pissed off old fashioned brewery who claimed that PBD WILL go, and that will annihilate many small breweries, and when it happens he stated "I will dance on their graves"

Unknown said...

I can't understand why breweries pay to join this racket. Is a SIBA award so important to you?

Bill Scantlebury said...

Well written Dave, thanks. We have arranged proxy already. We have had a few exchanges with our regional rep Ian Fozard & Robert Humphries, chair of the policy committee, about minimum pricing and loss leading etc. We gave a lot of accounts stats to SIBA about a year ago, to help with their research in this area, but have not seen any concrete results in print. We've seen no figures to properly back up SIBA's stance. So we asked SIBA in November if they have any research backed stats to show the actual cost of production of a firkin of beer proportionate to the size of brewer.Mike Benner was also asked recently what a reasonable price per firkin was.[See the ASK Siba video with Benner about appropriate margins on a cask of beer - where at 6mins 37 seconds he states that it's not for SIBA to give a price for a cask - and he also says that as part of our pricing strategy, small brewers may have loss leaders.] This really goes to the heart of the lack of consistency in SIBA'S position - on the one hand correctly stating that SBR should not be used for discounting - and on the other hand, running Beerflex which dictates prices which force small brewers to abuse SBR. Without SBR, small brewers could not possibly trade on Beerflex terms. SIBA is uniquely placed to determine a reasonable price for a cask of beer. With 450 participating brewers - the information can easily be obtained and we thought this was what they were doing.With this information, SIBA can then assess the price at which there is no abuse of SBR - i.e. the reasonable cost of production, reasonable profit, and full duty. Small brewers should not be required to loss lead as any part of its business - this would be a gross abuse of SBR. The sub £60 beerflex prices for single deliveries are also clearly an abuse of SBR - we simply could not trade in these terms if we were paying full duty.
Ian Fozard wrote to us "SIBA has amassed some quality brewery production cost data with participating breweries ranging from sub 1000HL up to >20000HL. We have looked at the economies of scale vs duty increases above 5000HL and our view is that duty reform above 5000HL is necessary as the increased duty above 5000HL exceeds any economies of scale achievable at these levels...It is also our view that the real culprits in deep discounting are those very large national and multi-national brewers producing vast volumes way above even the largest independents and driving down prices generally."
Robert Humphries offered to discuss the matter with me, replying to my query about whether stats had been gathered "...the answer is yes, but as so often the data could be better! " no other substantive comments were made.
SIBA should be making Beerflex work for small brewers,(eg minimum deliveries of 2 casks, true 'flexible ' pricing) prove to Government that it works and not be bowing to pressure from the SBR Coalition, in a 'compromise' where SBR is reduced. Seems to us SIBA are not committed to Small brewers any longer, and there is a problem of not being heard - getting to AGMS, and even regional meetings is very difficult for a 3 person outfit, for all the reasons you describe.
Cheers
Bill and Anna, Cullercoats Brewery (Bill will get to Liverpool around 11.30 Thursday)

Real Ale Up North said...

Well said that man. Another educative and enlightening post.