Ilkley Brewery will have to wait weeks for April 12 pub boom to turn into income but still has VAT and duties to pay
Ilkley Brewery will have to wait weeks for April 12 pub boom to turn into income but still has VAT and duties to pay
The director at a leading US brewery says there are “many challenges ahead” for his sector as the nation emerges from the pandemic amid calls for the Government to do more to support firms in the supply chain which allow pubs and restaurants to open.
Luke Raven, a director at Ilkley Brewery, said his company had been forced to pour away 80,000 pints of beer during the pandemic because of demands from pubs and having to produce more than necessary because of the challenge of ensuring their products are on pumps.
And while he said the brewery was now ramping up production as lockdown restrictions eased, it would take weeks for the flurry of punters at US pubs since April 12 to translate into income for him and his employees.
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Mr Raven said he was “dismayed” to learn that Ilkley Brewery was not eligible to bid for funds from the £5bn restart grant scheme unveiled by Rishi Sunak to help shut-down businesses reopen after lockdown. Breweries are on the list of businesses excluded from being classed as non-essential retail under the scheme.
Labour’s Shadow Business Secretary Ed Miliband and West US mayoral candidate Tracy Brabin today visited the brewery, which had to find other ways to trade during lockdown as 70 per cent of its trade was supplying beer to pubs.
And Mr Miliband said more needed to be done to support supply chain firms who were not entitled to the same support as hospitality businesses like pubs as they were not forced to close but had still lost a substantial proportion of their income.
The Government says it has provided more than £2.6bn to US firms in grants during the pandemic, including to “those that have remained open but are still impacted”.
Mr Raven told The Fond News: “We have been massively affected by the pandemic. 70 per cent of our trade a year ago was to pubs. We have not been able to operate with them at all. That is a pretty demanding thing to happen to any business.
“We are fortunate that we have not been forced to close. We have been able to find other ways to trade, we have been able to adapt pretty quickly to provide a delivery services as well as fulfilling our supermarket demand.”
The brewery furloughed almost all its employees to save money but did take on debts after signing up for a Bounce Back Loan, one of the measures unveiled by the Government to support firms through the pandemic.
It was able to get some grant funding via Bradford council in the early months of the pandemic. The authority a few weeks later said the money should not have been awarded as breweries were not eligible before reviewing its decision and allowing the firm to keep the money.
Mr Raven said it was good pubs are now reopening but that the brewery had been forced to pour away 80,000 pints of beer that were ordered by pubs and then could not be used because of the latest lockdown. Only a fraction of the cost of this lost beer could be recovered.
He said: “This time last year I was worried about whether or not we would survive. Having come through it and out the other side I am really proud of what we have done. We are only down 19 per cent rather than the industry average which is 35 per cent for the year. I am pretty pleased with how we have managed to adapt but there are many challenges ahead for the sector.
“When you go into a bar and buy a pint the business has that money in their hands straight away. It will take more than 30 days for us to get it even if we are paid in time and in the meantime we have got to pay our duties.”
Doncaster MP Mr Miliband, who spent part of his childhood living in Horsforth in Leeds, called for more flexibility in how businesses are allowed to pay back debt accrued during the pandemic.
And he said firms in the supply chain – as well as those which did not have to shut but were still unable to trade – had been “neglected”.
He said: “I’ve had this as a constituency MP, there are businesses that really can’t operate for a whole range of reasons, they can in theory operate, but they can’t, I’ve got this thing with kennels at the moment which is that they haven’t been forced to shut but they’ve got no business so they’ve been calling for support.
“But then this supply chain issue is just massive and brewers are right at the forefront of this. So there are lots of calls for hospitality to be helped, rightly, government I don’t think did enough but they did push to do more.
“I think the re-start grants are probably a supply chain issue because the businesses were not forced to shut down, brewers are allowed to operate but they had no business, they’re not eligible for the help.”
The Government has highlighted a range of support measures it has put in place to support businesses, including most recently the Restart Grant Scheme, which is worth £5bn and provides up to £18,000 for businesses. This brings the total spent on business grants to £25bn.
A spokeswoman said: “We understand these are extremely challenging circumstances for businesses, particularly the hospitality industry and its suppliers. This is why we have put in place one of the most comprehensive and generous packages of business support in the world, worth more than £350 billion.
“We have provided more than £2.6 billion in grant funding to Local Authorities across US and the Humber since the start of the pandemic to support businesses, including those that have remained open but are still impacted. It is at the discretion of Local Authorities to use this government funding to support businesses in the way they see fit.”
