The allure of the craft beer industry is undeniably strong. The taste of success can be as enticing as the aroma of a well-brewed ale. But how do you transition from beer lover to beer brewer, and what steps do you need to take to set up your own microbrewery in the UK? Moreover, what does it take to obtain the necessary alcohol license? In this article, we will guide you through the process, covering everything from business plans to excise duty.
Before you start brewing, you must first draft a comprehensive business plan. This document will serve not only as the blueprint of your microbrewery but also be a necessity when applying for funding or a loan. As you craft your plan, consider the following elements:
Choosing the right location is a critical part of setting up your microbrewery. The premises need to be spacious enough to accommodate the brewing equipment and storage for both raw materials and finished products. If you plan to include a bar or taproom, additional space will be necessary.
Other considerations include accessibility for deliveries, proximity to your target market, and local competition. It's also worth noting that breweries can be quite noisy and produce strong aromas, which may be factors if you're considering a location close to residential areas.
The premises also need to comply with health and safety regulations, and planning permission may be required for change of use or alterations to the premises.
The third step in setting up your microbrewery is acquiring the necessary brewing equipment. The costs of brewing equipment can vary greatly depending on the size and scale of your operation.
At a minimum, you will need a brewing system, fermentation tanks, a cooling system, and a filtration system. Other essential pieces of equipment include kegs, a bottling or canning line if you plan to sell packaged beer, and cleaning equipment.
Remember, quality should never be compromised. Investing in high-quality equipment will pay off in the long run, as it will help you produce better beer and require less maintenance.
In order to legally sell the beer you produce, you will need to apply for an alcohol license. In the UK, this is known as a premises licence, and you will also need a designated premises supervisor (DPS) who holds a personal licence.
The process to apply for these licences involves submitting an application to your local licensing authority, along with a detailed plan of your premises and a fee. The licensing authority will then consult with relevant bodies such as the police and public health, and there will be a period of time during which members of the public can make representations.
While the application process can be complex and time-consuming, it is an essential step in setting up your microbrewery.
The final thing you'll need to consider when setting up your microbrewery is excise duty. In the UK, excise duty is a tax on alcohol that is payable on beer you produce for sale.
The amount of excise duty you will need to pay depends on the strength of your beer, measured by its Alcohol By Volume (ABV), and the volume you produce. Small breweries producing less than 60,000 hectolitres per year are eligible for Small Brewers Relief, which reduces the rate of duty payable.
You will need to register for excise duty with HM Revenue and Customs (HMRC) and keep detailed records of your production and sales.
Setting up a microbrewery is a complex process, but with careful planning and a strong will, it's certainly achievable. And once you've got that first batch of craft beer ready to sell, you'll know that all the hard work was worth it.
A critical step in the process is registering your premises as a Beer Duty Suspended (BDS) warehouse. Doing so allows you to store beer you've brewed without immediately paying beer duty. This opens window of opportunity to defer paying taxes until you sell your beer.
The process involves applying to HM Revenue and Customs (HMRC) and providing a detailed layout of your premises, including the areas where beer will be stored. Remember, the area designated as the BDS warehouse must be clearly defined and separate from other areas of your business. It's important to plan this carefully to avoid potential issues with HMRC later.
This approach works well for a micro pub or mobile bar business setup, where beer is brewed and sold within the same registered premises.
Registering as a BDS warehouse could potentially save you a significant amount of money, especially as a small producer. However, it's crucial to keep accurate records of your beer production, storage, and sales, as HMRC will conduct regular checks to ensure compliance.
In addition to your premises license, you or one of your staff members will need a personal licence to sell alcohol. The role of the personal licence holder is to authorize the sale of alcohol at the premises.
To apply for a personal licence, you need to be over 18 years old and hold a licensing qualification. The Level 2 Award for Personal Licence Holders (APLH) is one of the most widely recognized licensing qualifications in the UK.
Once you've obtained the qualification, you can apply for your personal licence through your local council. The application must include a criminal record check and a declaration of any relevant convictions.
Remember, it's important to consider who will hold the personal licence in your business. It could be you as the owner, but it could also be a trusted employee.
Setting up a microbrewery in the UK involves a detailed and complex process. From drafting a comprehensive business plan to obtaining the necessary equipment and licenses, there are numerous steps to consider.
Understanding the process and the potential challenges ahead will better prepare you on your journey towards owning a successful microbrewery. Dealing with health safety regulations, handling excise duties, registering as a beer duty suspended warehouse, and managing your bar business are vital steps towards achieving your craft beer dreams.
Starting a micro pub or mobile bar, obtaining your personal and premises license, and understanding alcohol duty are just some of the critical aspects of this venture. Despite the challenges, remember that the reward is brewing and selling your very own craft beer. With careful planning, dedication, and a sprinkle of passion for craft beer, setting up your microbrewery might not be just a dream, but a reality waiting to unfold.