Finances and homebrew

[Lab Cat]

I started last august when I happened on a YT vid of someone (Craig tube?) brewing a Cooper extract. I didn't realise it was that easy and cheap, so I had a go.

Health reformers have claimed for years that the only way to reduce harmful consumption is through raising prices. An argument the govt is happy to agree with, given the excise taxes.

US friends living here took 2 years to get used to beer prices. The puritanical USA has varying excise in different states, but the most he'd paid for a slab of Sierra Nevada there would be $30US, and that was considered expensive. Of course, we have import costs, but the excise is the extra that makes everything expensive..

[Beerlust]

10 hours ago, MUZZY said:

Pubs go broke! It's a concept that is really difficult to get your head around but it does actually happen.

Look at every one of them as a microcosm. For every one of them that goes down, 20, 30, 40 or more people (depending on the size of the pub) lose a job.

Being flippant won't help those 20, 30, 40 or more people that just lost their jobs, nor those at the next pub that is only a whisker away from going under.

Zoning laws seem very lax these days, so I do understand how some pubs can go under if proximity between competitors is a bit clustered.

It's a touchy subject very close to my heart.

Cheers & good brewing,

Lusty.

[Shamus O'Sean]

3 hours ago, karlos_1984 said:

I enjoy all of the above, except bottling. Bottling sux and is a PITA. It's the only part I dread doing because of the stuffing around sanitising and filling, capping and packing away etc. Takes up the whole kitchen for a good couple hours from start to finish. SWMBO has more patience than I give her credit for.

And before anyone suggests it, no I can't change to kegs. Not enough room or cash to get it setup at the moment. 

I hear ya Karlos.  Bottling is my least favourite part of the process too.  Maybe when I was typing I was blinded by my general enjoyment of the hobby.

[Hairy]

Pubs in NSW make most of their money from gaming. It is quite sad.

[elLachlano]

Big ups to all who have weighed in. I like a lively debate. I suppose the damage that alcohol does to the wider community can justify the taxes imposed, somewhat. I just don't trust the Australian Government to spend the revenue wisely to counter the fact.

Craft and microbreweries surely suffer and so does the consumer. For now, in order to have the tastiest beers at the most reasonable prices it's homebrewing for me, with the occasional splurge on a night out or bottle of something a little stronger.

[Malter White]

8 hours ago, Beerlust said:

Look at every one of them as a microcosm. For every one of them that goes down, 20, 30, 40 or more people (depending on the size of the pub) lose a job.

Being flippant won't help those 20, 30, 40 or more people that just lost their jobs, nor those at the next pub that is only a whisker away from going under.

Zoning laws seem very lax these days, so I do understand how some pubs can go under if proximity between competitors is a bit clustered.

It's a touchy subject very close to my heart.

Cheers & good brewing,

Lusty.

You may have misunderstood my gist. I wasn't being flippant, I was concurring. The cost of doing business is prohibitive. Two iconic pubs on either side of Adelaide's east parklands come to mind, The Stag and The Royal, have gone out of business in recent years. They are both in excellent locations, so the question begs, why did they fail? 

[Malter White]

13 hours ago, karlos_1984 said:

I enjoy all of the above, except bottling. Bottling sux and is a PITA. It's the only part I dread doing because of the stuffing around sanitising and filling, capping and packing away etc. Takes up the whole kitchen for a good couple hours from start to finish. SWMBO has more patience than I give her credit for.

And before anyone suggests it, no I can't change to kegs. Not enough room or cash to get it setup at the moment. 

I find bottling somewhat gratifying ie. the finished product. I use PET bottles so capping is simple. Cleaning bottles is another thing altogether. I would gladly allow someone to take that chore away from me.

[Norris!]

9 hours ago, Hairy said:

Pubs in NSW make most of their money from gaming. It is quite sad.

I did some work with a regional pub where the issue was the gaming and how to replace the lost revenue if gaming was removed. It was hard for the committee to see a way around staying open without the gaming revenue. It took some thinking but the answer is the marketing of a family culture backed with events and to make the pub a community place again. The surveys showed the community felt the pub was simply a sad place with the regulars being gamblers, while the food was amazing, the pokies diminshed the atmospshere for most people. Push the post mix drinks and the keg beers, due to the margins versus bottle/canned margins( and highlight nearby breweries which will tie into other marketing opportunities and events) while leveraging the great restaurant they had to increase the revenue and cut expenses, while slowly replacing the gaming with weekly events, and finally continue to maximize a yearly festival returns.

It isn't easy being in the pub business due to the complexities and driving forces and the contracts with the pokies makes it hard to give up the golden goose for the benefit of the community.

I found it pretty interesting.

[Marty_G]

21 hours ago, MUZZY said:

Yes it will keep going up perennially. It's indexed every Feb and August.

Before being linked to the CPI it was raised in an ad hoc ... when Keating was treasure and modernised the economy he took that out of the equation and linked excise rises to the CPI ... I now think linking it to real wage growth would be better suited ... like so many I recall going to the pub on a Friday after work, getting a schooner and a packet of smokes and change out of a $1.00  ... the kicker is I was only earning $44 for a 40 hour week ...  

[Marty_G]

9 minutes ago, Norris! said:

I did some work with a regional pub where the issue was the gaming and how to replace the lost revenue if gaming was removed. It was hard for the committee to see a way around staying open without the gaming revenue. It took some thinking but the answer is the marketing of a family culture backed with events and to make the pub a community place again. The surveys showed the community felt the pub was simply a sad place with the regulars being gamblers, while the food was amazing, the pokies diminshed the atmospshere for most people. Push the post mix drinks and the keg beers, due to the margins versus bottle/canned margins( and highlight nearby breweries which will tie into other marketing opportunities and events) while leveraging the great restaurant they had to increase the revenue and cut expenses, while slowly replacing the gaming with weekly events, and finally continue to maximize a yearly festival returns.

It isn't easy being in the pub business due to the complexities and driving forces and the contracts with the pokies makes it hard to give up the golden goose for the benefit of the community.

I found it pretty interesting.

I could probably write a thesis on this stuff ... I can't talk about any other state apart from a Qld perspective what the supermarkets have done with pubs is criminal for want of a better description ... the State was very reluctant to allow pokies into pubs but with so many going broke in the 80's  they relented around 1990 and also brought in off-site bottle shops as well which could only be linked to pubs ... this was a great result for pub owners and many saved their lively hood  and made money ... the big supermarkets pushed hard to get alcohol sales into supermarkets but couldn't so around 2000 they came in with a massive cheque book and bought pubs ... which was great for the big pub families and those that had the best pubs in the regional towns as they paid big money ... I know the Weller family sold one pub, the Villa Noosa Hotel, in 2002 for $44 Million ... What the supermarkets have now done to those pubs is gut them renovate and totally change the character of the pub from the old school watering hole with public bar, lounge and beer garden  to a gaming venue that sells food, beer and has a play ground ... they stay open 24/7 and suck money out of the community ... and this is still happening as they are still buying pubs or getting new/transferring licences that are offered  ... the result now there is a rise in wonderful purpose built small Gastropub style bars selling good beer and food run by hipsters/young entrepreneurs  ... which I think is great ... so the younger more discerning culture is pointing the middle finger directly at the big supermarket gaming houses  ... I love it ...  there is only one thing that i find annoying about them is the beers have obscure names and when you ask the staff what type of beer it is they don't know ...  so you pick one blindly and it is  a hot Qld summers day with the humidity in the 90's and they poor a heavy Ale when a cool light refreshing lager is required ... 

[RepSpec]

I got into Hb from a love of craft and megaswill beers and a mate was Hb at the time. Got a kit for my 30th bday and have put down 17 or so brews in 2 years.

I love trying new thing's, a great feeling of accomplishment from creating something almost from scratch. 

I also (like others) enjoy the cheaper aspect of it. My most expensive brew was my "lotso" brew. That pushed $60-70 based on the hops used. But I got 28 PET longnecks out of it...that's 2 slabs. Saved the same in dollars if I had of purchased a slab of "bridge road pale" or the like. While I'm all for supporting independent brewers, with mortgage and such, it's too much.

The best part of Hb was this forum and when I had interest in one of my recipes...then to have Mikes15 (I think) from NZ brew my beer and then give it enormous praise...I was blown away.  Couldnt have wiped the smile from my face!

[Norris!]

@MartyG1525230263

Great insight and backstory, I often wondered about that connection. Me being from America I am used to the convenience of getting what I need at a big chain, but since moving he re I see how vibrant the small and medium size family businesses are and the overall benefit they provide to the community. Yes I do get a little annoyed that I have to go to 3 different shops sometimes, time is also a resource, but I think the overall benefits outweigh my slight annoyance.

 

[Marty_G]

4 minutes ago, Norris! said:

Yes I do get a little annoyed that I have to go to 3 different shops sometimes, time is also a resource, but I think the overall benefits outweigh my slight annoyance.

this is the key to keeping the money in the community ... I now live in a small rural town on the Sunshine Coast ... have easy access to the big supermarkets, 5 minute drive from the village, where I do much of my weekly shopping but I deliberately buy Bread, meat and veges from my local village stores ... the product while dearer is a better quality and the money stays in the community, gives locals jobs and gives the village a vibrant atmosphere ...  

[Norris!]

1 hour ago, MartyG1525230263 said:

this is the key to keeping the money in the community ... I now live in a small rural town on the Sunshine Coast ... have easy access to the big supermarkets, 5 minute drive from the village, where I do much of my weekly shopping but I deliberately buy Bread, meat and veges from my local village stores ... the product while dearer is a better quality and the money stays in the community, gives locals jobs and gives the village a vibrant atmosphere ...  

So true.

[Beerlust]

1 hour ago, MartyG1525230263 said:

this is the key to keeping the money in the community ... 

There was a "beer culture" doco released a few years back that exemplified this.

Cheers,

Lusty.

[Norris!]

@RepSpec

I remember your Bitsa Ale, it looked amazing. I think it has become a thing to brew a bitsa when times call for a clean out, you definitely started trend and a name with an amazing recipe that stands on its own rights.

My memory is notorious for being bad, there are already several references to that on here, but I remember looking at it and going my my my that looks nice...but I could totally be wrong, see above reference.

[Ronnie Dale]

Spent a few years in Ohio where there is a 'Mom and Pop' law that keeps the smaller shoppes open.  Beer, bread, cigarettes and milk. The wholesaler publishes the base price of goods every morning to the shoppes and government.  No one is allowed to sale the four items for less than that price plus 25%.  Keeps the little guy in business, the big grocery stores never have beer on sale and usually sell it at a higher cost than the battler.  Of course the wholesaler can still sell for less to big guy, just the big guy must use the base price plus 25%

I seem to be ramblin, but I know what I mean.

[DonPolo]

On 3/3/2019 at 9:01 AM, Norris! said:

It isn't easy being in the pub business due to the complexities and driving forces and the contracts with the pokies makes it hard to give up the golden goose for the benefit of the community.

I found it pretty interesting.

Certainly is interesting. I have a friend who owns a pub down the coast which when he bought it was slowing going down hill, only frequented by 'undesirables'. He did some renovations, improved the restaurant but things weren't improving. Then he upped the prices and removed a lot of the gaming machines. The 'undesirables' left and the community came back and now it's going gangbusters.

[DonPolo]

On 3/3/2019 at 9:42 AM, MartyG1525230263 said:

..  there is only one thing that i find annoying about them is the beers have obscure names and when you ask the staff what type of beer it is they don't know ...  so you pick one blindly and it is  a hot Qld summers day with the humidity in the 90's and they poor a heavy Ale when a cool light refreshing lager is required ... 

Fortunately the staff in all the pubs down Canberra way will ask you if you want a taste if you ask them what are the beer styles like? I've tasted up to 10 different beers sometimes. I've then bought a beer almost to do the right thing because by that point, I was almost done! 

[Norris!]

@DonPolo

I am glad it is working out for them. It is hard to see how dropping the golden goose can help but here is an example, with some of the same and different circumstances that shows the philosophy can work, family oriented with a nice atmosphere and good food can bring the community back while allowing the pub owners to make a living, a win win.

Cheers

Norris

[DonPolo]

At the risk of alienating those, including me, who like to save money by buying packaged alcohol at Dan's or where ever. I wonder if the government has ever considered the community benefits that would accrue by taxing beer/cider in kegs less thus promoting drinking in pubs? It might be more difficult to reduce the cost of bottled spirits consumed in pubs but that is probably a good thing.

I must admit that I have to think twice when I have to pay $28  for couple of pints of some craft beers at a pub when for not much more I can produce about 40 pints of a kit ($16 APA ) and kilo ($8 x 2 LDM) brew, less when they're on special.

[headmaster]

I've run a couple of business cases to look at the costs of starting a microbrewery just out of interest really. The excise tax is the main killer for this idea. There would be plenty more craft  breweries all around us if the tax wasn't so utterly ridiculous.  The tax on a case of sub 4.9% abv beer (24X330ml) is $26.80.  After paying for labour, ingredients, rent, power, packaging, transport, and then all the taxes, including the excise tax, there's not much reason to be motivated to try and beat the megaswill breweries who are making beer that is like eating tinned dogfood, compared to our own homebrew or craft brew, which is like eating a proper meal. 

The lazy government loves to tax 'sinful' things like tobacco and alcohol, as you look like a criminal if you  complain about this in public. What this means however, is that we are even more  motivated to brew our own, so many of us would not have learnt this skill and got the enjoyment from doing so. The government can go and stick it's ridiculous excise tax where the sun does not shine as far as I am concerned. 

[DonPolo]

1 hour ago, headmaster said:

The tax on a case of sub 4.9% abv beer (24X330ml) is $26.80

So does that mean that the Aldi Rivet Lager at $28.99 per case is only making a gross profit for Aldi of $2.19 per case?

[headmaster]

From aldi website: *Please note: Pricing varies by state - $26.99 in VIC/WA and $28.99 in NSW/ACT\

Being 4.6% the tex might be less, I would have to check. But yeah possibly they are only making $4.10 on this in total. So Aldi's margin may be less than a dollar per case. 

Also, some of these retailers choose to sell some lines at break even or at a loss for various reasons. 

[DonPolo]

I know this may be heresy but I have to be honest. I was staying at my son's place and he was away for the evening. Having arrived late and not having anything to drink, I opened his fridge to see what was on hand.

There was one lonely Rivet Lager can in the door and I thought 'what the heck'.

To my great surprise it wasn't all that bad!

If I had to drink megaswill, it is certainly the right price. It won a bronze medal at the Australian International Beer Awards for whatever that is worth (probably not much) but I was surprised. Apparently it is brewed an Australian brewer in Vietnam.