Friday, 19 August 2016

Vigo Hand Labelling Machine

Righty, quick technical post. This is mainly to help out a brewing friend, but hopefully some other people might find it helpful.

We have had a nice bottling line for over 3 years now, It works well and we're really pleased with it. Prior to that we hand bottled. To be honest it's really hard work and tedious. However it is a way forward for breweries wanting to have control of thier own product, rather than contract bottling.

We started by applying labels by hand. That really is tedious. Later we borrowed a hand driven machine from Stringers. Nice people, who seemed very happy to continue to let us use their's. However, we got a little fed up of not having the machine right there and handy, so we bought our own, exact same machine.

It is supplied by Vigo. It's OK, but doesn't have great instructions. So I did a video. It's a bit roughly edited, but, you know, time and that.

Hand Labeling Machine from Hardknott Brewery on Vimeo.

Tuesday, 26 July 2016

Moo Bar - a public information post

The beer supply chain is complicated. There are lots of links with beer going one way and hopefully money flowing back to brewers, eventually. What goes on behind the scenes is fairly much hidden from the drinker. If we get grumpy with a pub because they are well over-due paying an invoice we might stop supplying. Sometimes this is temporary and may even go completely unnoticed by the beer drinker. A few harsh words, or more often than not carefully worded emails are exchanged, owed money gets paid and the beer flows again. Everyone is happy. I would not normally publish information about which outlets are more trouble, it wouldn't be right, but there are times I feel like grumbling. Brewers do tend to talk to each other and there is an increase of sharing of information in this regard.

Sometimes it gets to the point that there is a company that is behaving so abysmally that it is only right to call them out for the sake of all the very good businesses that are above board and working hard to run successfully businesses legally and more importantly in a morally sound manner. Be it pubs, breweries, wholesalers or any other businesses in the whole of the beer and wider alcohol industry we should not have to fight rogues.

I want to share with the reader my all-time worst ever experience bad business practice. In 12 years of trying to eek out an honest living this has become the one defining event. I refer to Moo Bar, that small chain of venues in the Penrith and Carlisle area. The concept is the brain child of a Nigel Tarn, previously famous for a bogus sale of his previous business for £7 million. (the sale never actually happened and Turbo drinks went bankrupt) In an apparent shock event this week the landlord of Moo Bar Carlisle, the property owner, evicted the operators, Moo Bar limited (Company number 08447386).

There has been local support for Moo Bar. Clearly the operation has found a good following amongst enthusiasts in the city. Be it for a good range of beers or for providing a music venue I am uncertain. Never-the-less the support is impressive. However, the facility that has been provided is clearly not a viable business and has been funded by unscrupulous and unauthorised borrowing from many people, in particular many smaller breweries like Hardknott. I have information that would indicate sums of in excess of £50,000 to brewers and beer wholesalers alone. Moo Bar owes Hardknott in excess of £2000, and this is after we helped Nigel's cash-flow problems in the early days with a supply of £500 for lines dedicated to Hardknott (which was never honoured in any reliable way) - we know some other brewers have done similar.

Nigel Tarn - Business buffoon
or downright crook?
either way, don't trust this man.
Nigel was from the start erratic in his payment of invoices. Initially not the worst, but never paid them in any structured way. Amounts paid were inconsistent with invoiced values making reconciliation of accounts difficult. If I were charitable I could say this is because Nigel is an accounting buffoon. However, I do wonder if this was a deliberate and cynical attempt to be obtuse so as to try and con us from day one.

Fast forward to September 2015. Much of Moo Bar's account was grossly overdue. Many invoices were over 90 days from delivery date. We were starting to fight with Moo Bar to get payment for beers and repeatedly had the company on stop.

We also noticed that companies house records showed a lack of filing of accounts and other mandatory documents. They have never, to this day, filed accounts for an operational company despite clearly trading. We were getting extremely worried and had already had the tip-off from other brewers that Moo Bar was in trouble.

Nigel suggested that we delivered more beer COD. Now, we have a strict policy here at Hardknott; Being on stop for unpaid invoices means being on STOP. No, we will not accept cash-on-delivery until the outstanding invoices are paid down. Starting up the van to go all the way to Carlisle to find the cash wasn't there was an option I was not prepared to consider1. Several other brewers had reported that COD delivery agreements had been made only to find no cash ready when the delivery was made.

We hit an impasse. We were not going to deliver unless Nigel paid his outstanding bills. Although we were not explicit he probably realised we were not only at the point of not delivering until he paid down his account, we had also already made the decision to reduce his account facility to zero.

Please remember, this is all before the floods in December 2015.

Nigel made some excuse about a serious illness, and being robbed by a member of staff. If I were honest I had already long ago placed Nigel in the chancer, bluffer and query rogue bin since my early dealings with him. I was fairly sure these were nothing more than excuses and based at best on distortions of the truth. We asked for a crime number as presumably it had been reported to the police2.

Nothing more came of it. No monies paid, no further communications from Moo Bar, despite us sending repeated email requests for payment. Of course in the middle of all of this there was the floods, giving Nigel a perfect sob-story to cover the fact that his business was already in serious trouble.

After what I thought was a reasonable amount of time I sent a final email pre-warning of a letter before action.3 This was then fairly swiftly followed up with the promised letter. By this time all of Moo Bar account with us was well over 90 days aged. We had paid all the beer duty, staffing costs, VAT, cost of malt and hops etc to our suppliers Further emails were sent indicating that the next course of action would be application for a County Court Judgement. No reply, no money. So, I applied for a CCJ, which we were awarded. I sent further emails stating that the bailiffs would start knocking next.

At this point there was an attempt to make amends. A second villain of the piece made an entrance. For the time being I shall refrain from further details, other than to say we realised that this character already had form and there are very possibly innocent people (or at least unwilling accomplices) who I am not willing to drag into this sorry story. An attempt to do a deal ensued, but sadly the deal fell far too short for us to be happy and we decided to walk away.

In the interim I discovered that many breweries and distributors were owed significant amounts. I started to investigate further and found a huge amount out about Nigel and some of his business dealings. In the end I stumbled upon the employee who was alleged to have robbed Nigel. This was a revelation, and certainly gave a signifiant alternative view on the dark dealings that had been going on.

The chef involved had been accused of stealing, it seems because he was paying suppliers cash on delivery out of the till to make sure stock could be bought. The chef was arrested on the day of his granddaughter's christening. We have checked the information we have in our emails and there is a sneaking coincidence in the dates of the start of the investigation and the date we requested a crime number. We are afraid we might have precipitated an innocent man's arrest as a result of us demanding proof of this "crime". He was interviewed and released, but too late to attend the important family event. To my knowledge no further action has been taken.

I also have information about signifiant PAYE irregularities in the Moo Bar empire.

The two ex-employees I have spoken to have indicated that there was never any "serious illness" - the information I have suggests that Nigel suffered from a bit of acid reflux. An uncomfortable but not serious condition. I know, I suffer and have to take "proton pump inhibitors"3. It is quite normal for the quack to recommend a camera is sent into the oesophagus and stomach just to make sure it isn't cancer. Decent people don't go around using this as an excuse to avoid paying debts.

I have information that would indicate that Nigel pretended to be in hospital when in fact he was on holiday living it up leaving staff to fight with the problem of an increasing number of suppliers who were refusing to deliver due to unpaid bills.

This morning I spoke to a spokesperson for Walton Goodland, the estate agency who is dealing with the lease. The outstanding bill for rent on the property amounts to in excess of £20,000. Moreover, the reason rents have been returned by the landlord is because the rents have been paid in the name of Baa Carlisle LTD (10087794) - where as the lease is in the name of Moo Bar limited. This is important in many ways. Firstly if the landlord accepted the payments from the wrong legal entity that incorrect legal entity would then achieve a right to operate from that property, whist the previous entity would still owe outstanding monies.

The debt with the landlord goes back in excess of 9 months and well before the floods.

Nigel is trying to set up new companies and allow the old Moo Bar Limited to become struck-off as a result of the company appearing to Companies House to be inactive. This is easy to achieve if all the directors resign. Once a company is struck off there is no longer a legal entity that can be chased for debts. It is a tidy trick used by unscrupulous rogue traders like Nigel and his friends. However it can be fought if there is proof that there is still action against the company, which there is. We intend to continue to fight this, as I know several other people are also doing.

Taking the action to communicate this story, which really only looks at a fraction of the deceit and bad-practice at play, is not something I am doing lightly. Calling out a "customer" might make prospective accounts worry that this is my normal MO potentially giving Hardknott a bad name. I hope they will understand that Moo Bar is a competitor to above board routes to market. I would hope that legal and ethical businesses will see ultimately my action is in the name of improving the lot for any decent business in the alcohol industry.

There are a lot of very reasonable and above-board pubs and bars doing things in an honest and reasonable way. It simply is not fair that this outfit is taking good business away from good places.

Yes, I'll not deny I want my pound of flesh, I can't have my money, and I do want to hurt Nigel, seriously. Baseball bats are probably not a good idea, and anyway, Nigel is using the keyboard as his weapon of choice, so why should I not do the same?

Nigel is a good bullshitter. He has various people believing the rubbish he is pumping out. However, he has robbed me of £2000. He has robbed numerous breweries of various amounts of money. He is damaging the brewing industry and my biggest fear is that he will "restructure", form a new entity and successfully trade from a new premises. I want people to know exactly the sort of person he is.


1It seems to me if you have the cash to pay for the beer you want now then you should be able to pay down a previous invoice. Once an account is in the state whereby the aged debt is shelved and future deliveries are all paid COD then a serious cash-flow problem has started. It is only a matter of time before that business goes south.

2it is worth noting that much communication with Nigel was via emails.  We have various dates in that email thread that helps us piece together and be sure about certain things.

3No, I'm not really sure what that means either.

Sunday, 5 June 2016

Temperature Control of Fermentation

There is a risk I am entering into a techie phase in this blog. I'd like to extend an apology to anyone who is checking in for some sort of controversial hyperbole of increasingly doubtful declaration of awesomeness. Making really great beer does require some diligent appliance of science, technology and engineering. We're still a very small brewery, but intent on growing and improving along the way. For various reasons, not least of which is the fact that a lot of brewers read this blog, I thought I'd share some details of our current journey.
Our current temperature control panel.
Note replacement controller at the top as the
original units became expensive to replace.

One of the most important parameters in the brewery is fermentation temperature. Sure, mash temperature is also important, as are things like timings of hop drops in the copper etc, but you can manually monitor and correct for them in process. Fermentation happens over a period of several days. You can't be there all the time to turn on the chilling as and when. Some sort of automatic temperature monitoring and control system is just about essential.1

A simple thermostat would do, to a point2.  Unfortunately this form of control is inherently unstable and there will always be an oscillation of the actual controlled process variable4. This is generally being made worse by the presence of relatively large RC and DV lags5. If you are trying to control at 20 degrees centigrade using a regular thermostat your temperature is highly likely to be oscillating anything up to 2 degrees either side of your set point6. Yeast isn't too keen on this sort of environment.

A LOGO!8 PLC and a touch screen HMI

There is a control technology, which is really quite old, so old in fact that it predates my first study of the subject when I was starting my career in the early 80s. It's called three term control and applies proportional, integral and derivative algorithms to the system to keep the process variable, our fermentation temperature, absolutely blob on and a stable as a rock. It's what we currently use on all our fermentations. Our yeast really seems to like it a lot. However, I think there are better ways of doing it still... The panel I've built is looking a little sorry for itself and the controllers I've used are somewhat overpriced now in my view - long story, but it turns out to be expensive to maintain, despite being originally economic to make. Time has come to update the system

Proving the PLC and HMI can talk to each other via ethernet
At BeerX I had some very lengthy chats with the nice people on the Siemens stand. I had already told them that I had used on of there PLCs7 on a keg washing project. I had already identified that this nice little module has got three term controllers built in. The conversation galvanised some action to actually taker advantage of combined wisdom.

So, as a collaboration project I've decided to work with them to get a turnkey system up and running that is appropriate for the micro-brewery sector. The last two days I've been getting it set up on the bench, complete with a rather sexy touch screen HMI8

There will be more posts to follow describing my journey back into the world of control engineering and hopefully provide some of my previous experience, and even a little bit of my degree to develop cost effective and appropriate automation to the small scale brewer9.

Meanwhile, you'll have to excuse me, I have some PLC programming to do.

I'm looking forward to getting the trending function working
Being able to graph the control system will help tuning.
1I know some brewers get up at stupid o'clock in the middle of the night to deal with this sort of thing. I have too when something has gone wrong with my system, but you really shouldn't have to. I don't think it's a sign of dedication to the cause, I think it is just daft when the technology exists to eliminate the need.

2Thermostats are what we control engineers3 call "on/off control" - there is almost always a thing employed called hysteresis or time lag, without which noise would be amplified and cause contact chatter.

3Actually, I've come to realise that if I drill down into my skill set, my qualifications and  experience, this is actually my true core skill. Luckily brewing can use a lot of knowledge from this particular discipline, and so I intend to apply a lot more over the next couple of years to make our brewery even better.

4There we go, that's proper control engineering techie speak. The process variable is the thing you are trying to measure and control, in our case the temperature of the fermenting wort.

5Wow, WTF? RC = resistance x capacity and DV = distance / velocity. So, your cooler can apply a certain kW of cooling to your tank. The tank has a certain thermal capacity - that's RC. It is a time constant. The circulation in the tank, which has some sort of velocity figure, means that between the cooling cutting in and the cooler wort being seen by the thermometer will create a time delay. There may also be delays in the cooling system itself, between cooling being demanded and the cooling action actually acting on the tank.

6Set point is just the value at which you are trying to maintain your process variable.

7**yawns** - PLC = Programable logic controller. They are highly specialised little computers that are dead easy to program, if you are a control engineer, to control all sorts of stuff. Quite a lot of bigger breweries automate their production with such things.

8More acronyms - HMI = human machine interface. This one seems quite powerful, and actually the most expensive part of the set-up.

9One of the down sides of this blog, and generally being a little bit gregarious, is that many people call me up for advice. I sort of like that really, but it is a drain on my time. Mostly they are brewers who have not long been brewing and have hit a technical challenge they can't fix, or more often than not people thinking of setting up a brewery and looking for advice. My advice has generally been to try to lean on the side of "don't do it, it'll ruin your life forever".

I think there are too many breweries in the UK now. I'll make absolutely on secret of that opinion. So,  more and more I am becoming reluctant to hand out random advice with no return on the time invested. Indeed, there are one or two notable examples of negative experiences in that respect, I'll say no more.

That might seem a little churlish, and quite unfair on some of my very best brewing friends, who have stayed loyal and friendly, even if just behind the scenes. However, I am now looking for some sort of monetisation for any help I give. I believe there is a gap in the micro-brewery sector of the skills of a control engineer who also has significant brewing experience. I'm pleased to say that Siemens also recognise that and we are developing a very positive relationship. Part of the agreement for me getting some support from Siemens is that I can be a resource to help brewers who want to use their equipment to help automate their brewery. I'm happy to do so, and will continue to monitor if this is a diversification I should be looking to generate revenue from.

Thursday, 2 June 2016

The oxygen conundrum bottles versus cans

Cans keep out oxygen, so they say. Bottle tops don't do quite such a good job, so we are told. It's all to do with the seal that can be achieved. Oxygen can sneak through the tiny molecular gap that might be present between glass and the plastic seal on a cap. Metal to metal is a far tighter closure, apparently.

That is all well and good, but is it possible to get beer into the can reliably without oxygen pick-up? As it happens, Stonch has already cast doubt on that. I can't really be sure, except for the fact that the canning lines I have seen seem to not have all that a reliable way of purging with CO2 and there is certainly no pre-evacuation of the can.

However, our bottling line at Hardknott is the double pre-evac counter pressure filling type machine. What this means is that a contraption attaches to the bottle neck sealing hermetically from the atmosphere. Most of the air1 is pumped out. The bottle is then filled with CO2 at a pressure of 1 atmosphere gauge pressure2, i.e. 2 atmospheres absolute. This process is then repeated again, hence the word "double" in the name.

Only then is the beer allowed to flow into the bottle, under a counter pressure of more CO2 at around 2 bar. When the beer goes into the bottle it is extremely oxygen free. When the pressure is released the beer fobs a little, and we set the rate of bottling to get the right fobbing, along with a little squirt of sterile water to help it foam. This fob is all beer and CO2 with only a tiny area exposed to the air.

The canning lines I have seen try to puff out the air with a little tube that goes to the bottom of the can. The beer is filled from the bottom of the can to try and push the CO2/air mixture of unknown purity out of the can. Any fob will have quite a significant area in contact with the air.

In my view to can reliably with low levels of oxygen it would be necessary to do the process in a blanket of CO2, rather than the open systems I've seen.

Cans might keep out oxygen, but I'm fairly sure it is a lot harder to stop it being in there in the first place. The filling process is certainly not as hermetic as with our bottling line.

Because it is difficult to explain in words I did a little animation for our bottling line.

from Hardknott Brewery on Vimeo.

Incidentally, I hadn't really thought about the problems of canning compared to bottling until Jon from Stringers pointed it out to me the other day. All the result of a chat over a beer. Isn't beer good.


1Our vacuum pump gets down to about 0.1 atmosphere absolute pressure.

2Gauge pressure is the pressure relative to the atmosphere.

Monday, 9 May 2016

Best Supermarket for Craft Beer?

If you have been following Hardknott for any length of time you'll know we've had great success with our beers into Morrisons. Certainly most of the supermarkets are now realising they need to add some craft beer to their line-up. Morrisons have certainly upped their game and are pushing to have better beers. We are part of that push.

Nothing can ever stay the same. We started with three beers in Morrisons, Azimuth, obviously, as our staple, Infra Red, which is a bit of a darling for us, and Code Black, which if I were honest is a bit extreme in the favour profile for most people.

Code Black didn't make the sales needed to justify the shelf space. It's a fairly hard costing issue. Shelf space costs the retailer money. Turnover per shelf metre is a key indicator of performance. Not surprisingly Code Black got the chop quite early. A shame, but hardly surprising given a microsecond of thought.

A year into supplying Morrisons and they are keeping things very live, as are we. It's fun to produce something new and it really excites me to get that new thing out there to the great craft beer fans. Last year we launched Intergalactic Space Hopper at Craft Beer Rising in Glasgow. It was well received and we supported it in our own way with a very daft video, where I make quite certain that no one is going to accuse me of not putting my own reputation on the line for the purposes of getting us noticed.

Intergalactic Space Hopper from Hardknott Brewery on Vimeo.

Looking at the total craft beer range the beer buyer decided that Infra Red perhaps hasn't done quite as well as they would like and we should try some thing else in it's place. He noticed Intergalactic Space Hopper had been making a few waves and asked if we'd like to consider supplying that instead of Infra Red. To be fair, I guess Morrisons probably listed it despite my crazy video antics, or for that matter any other imagery that might have originated from the Hardknott PR clunky machinery. Whichever, we're just pleased we can once again get much more of our great craft beer out to very many more people.

Apparently it is going live today, although twitter tells me it's been on the shelves for a few days already in some stores. Out goes Infra Red, in with Intergalactic Space Hopper, and early indications are that it is doing well.

Looking at Twitter I'm seeing some people finding Hardknott in Morrisons and declaring them the best supermarket for craft beer. I don't know if this is fair, or entirely due to Hardknott, but I'm going to claim it anyway, as outrageous and potentially inaccurate declarations are by and far the most successful ways of getting one's name better respected.

So, get sown to Morriosns and buy some stunning craft beer from Hardknott.


Tuesday, 3 May 2016

Due Diligence

This is mainly aimed at brewers, it's a long post, sorry. If you are interested about beer pricing as a drinker, you might also be interested, but it is a long and weighty read. If you are a brewer, and you are not worried about the subject of due diligence and how it applies to your own business risks I suggest you read this carefully.

Beer is taxed quite heavily. This will not be news to the reader, at least I hope not. Around 40% of the gross money we collect for the beer we sell goes off in VAT and duty. On top of that we have such things as PAYE, NI contribution, both employee and employer1, business rates, insurance tax2 and more.

If we dare make a profit we'd be taxed on that too, not that there is much left in the pot for profit, such are the narrow margins on beer. You see, we haven't put up our wholesale list price in six years. To make more sales we are finding we have to discount harder despite our beer getting better and better and better.

I would estimate, and without checking my accounts properly, that close to 50% of the gross monies we collect go right back to the Government.

This is all good in many ways. We live in a civilised and caring society. The politicians want to try and tell us that everything is broken. Personally I think we live in a great country where we all have the right to vote, our children get free schooling, you are not charged to go to see a doctor, they don't check your medical insurance when you are admitted to hospital. You can call the cop shop and a person in a uniform will generally take you seriously without you having to bribe him.  We can drive down our roads without having to pay tolls in the most part and deaths have been reduced significantly due to spending on all sorts of road safety measures.

We, the brewers help pay for a lot of that, and I'm proud that our industry helps keep public services going. We run an honest and above board business and have had the ethos that if we try to pay our taxes, within the lawful constraints that exist, then we will stay out of trouble with HMRC. Our accountant advises us on the best way of ensuring we only pay what we should, and ensure we have the correct business structure to do so.

When we first started brewing we had two visits from HMRC within a fairly short period of time. Both were fairly thorough, but the outcomes showed that we were doing things right. The inspectors made comments about how we should tighten up on one or two things, but due to our careful and above board record keeping we got a clean bill of health.

The most important thing that we gained was a line of communications to HMRC should we have any questions. The officer was very helpful and seemed to welcome communication regarding various matters. Then, all of a sudden, the banking crisis and subsequent deficit hit hard. One day we decided to throw a whole tank full of beer away. I tried to contact the officer in HMRC and was told he had been moved out of the beer duty department and in fact HMRC wasn't chasing the likes of us anyway. Funding to the officers was slashed and there was no one left to help us. We were almost told that we could do what we liked.

Since then a huge number of new breweries have sprung up. Many are very enthusiastic, some even make good beer, but with little gap in that market in our corner of the world there is very definitely oversupply of fair-to-middling cask beer. We are told we are expensive. We know we are expensive and there is two very good reasons for us to be so; we make good beer, and we pay all our taxes and duty. We know that some businesses do not, and in particular some micro-breweries cannot be doing so at the wholesale prices they are charging.

We have unsubstantiated reports of newer breweries delivering beer without paperwork, for cash, no questions asked. The prices can only be viable if VAT and duty are being evaded. There is also significant evidence further down the supply chain of businesses avoiding paying VAT, corporation tax and worse still, limited companies that seem to deliberately set up to run up debts and then become dissolved by a mechanism called compulsory strike-off. This last one is very important, so take notice of this.

From 1st November 2014 it became a condition of approval to produce alcohol, or run any sort of alcohol warehouse, that we apply "due diligence" to our business. We are, if I were honest, still trying to work out the full implications of this, but we are considering the fact that it might mean looking very carefully at all our business transaction.

I take the following from the Excise Notice 226: Beer Duty;
35.1  What is due diligence?
Due diligence is the appropriate reasonable care a company exercises when entering into business relations or contracts with other companies, and how it responds in a deliberate reflexive manner to trading risks identified. 
It does go on to say specifically about duty evasion and fraud.

35.3  What am I expected to do?
From 1 November 2014 it becomes a condition of your approval as a registered producer or packager of beer that you must:
(a) objectively assess the risks of alcohol duty fraud within the supply chains in which you operate
(b) put in place reasonable and proportionate checks, in your day to day trading, to identify transactions that may lead to fraud or involve goods on which duty may have been evaded
(c) have procedures in place to take timely and effective mitigating action where a risk of fraud is identified
(d) document the checks you intend to carry out and have appropriate management governance in place to ensure that these are, and continue to be, carried out as intended
From this, talking to other brewers, it seems that the interpretation is that we only have a responsibility to monitor for duty evasion. Little breweries don't send out beer under "duty suspense" and all duty is paid by them, so why do they need to worry?

Well, if you think HMRC are only interested in beer duty, and don't care about VAT evasion or unpaid PAYE and NI, or other evasion then I think you are wrong. Equally, you have a responsibility to your own business to manage your risks and exposure to bad debts. We have a hard line on this and upset some customers as a result. But frankly, when we see a risk approaching, and we have our well respected maltsters and hop merchants rightly putting us on stop, and the cash hasn't come in from a customer yet again we believe we have a right to get a little hissy. We are happy to risk losing a customer who isn't paying fast enough anyway.

When a business is looking a bit dodgy and payment is repeatedly, consistently and grossly overdue we start to view continued trading with them a problem. At the very least, remember that around 50% of what they owe us is tax, which in all likelihood we have already paid. If we continue to trade with them they are risking our business.

Bad payers have offered on many occasions cash on delivery solution for future deliveries. I feel that is a great idea, provided they pay down first what they owe. However, this is not their meaning, what they intend is to keep the debt just where it is, and future payments will be cash for just the beer delivered. I feel that once a business has got into this situation it is so much in trouble that there is a real risk of the situation being compounded. We always say no, even if they are trying hard to "trade out" of their predicament.

Is that too hardball? Perhaps, and to say I don't feel a pang of guilt about it would be lying. However, to load the van, pay a driver, put miles on that van, and then to find the cash isn't there when the van gets there is too much of a risk for me. If they cannot at least put some money in our account first we just will not deliver.

"But we need the trade" says one brewer. "OK, but what about due diligence?" is my reply. "That only applies to beer sent in duty suspense, surely?"3

I do not think so. I don't know for sure, but it appears that HMRC have identified that there is significant risk in the alcohol supply chain of tax evasion and even tax and company fraud. I think they are putting the onus on brewers to start to rattle this out. If as an HMRC registered alcohol producers we supply a company that becomes insolvent or we have not verified that they are VAT registered, or are otherwise evading taxation then we may well be liable for a lot more than we bargain for. I do not believe HMRC are limiting our responsibility to just beer duty. Even if they are, if we cannot pay our beer duty because we have traded irresponsibly they will have no sympathy for us.

SIBA members are offered due diligence support. As is the case with SIBA it isn't always easy to find all the information you need, but it is there. If you are a brewing member go to and then click on "members toolbox" - enter your username and password. If you do not have this then ring 01765 640441 and there should be a helpful person there who will assist. If you are not a member of SIBA I strongly recommend you join up, they are the best solution to ensuring compliance with due diligence.4

Once in your toolbox find the My Toolbox drop down and select My Tools, Due Diligence Tool. There is full instruction on what you can do. It is not compulsory to use this method, but it is a template that SIBA have developed that might help. The bit that is most helpful in my mind is the ability to run a due diligence company search. This should bring back any concerns about a company. My advice is if there are any concerns about the health of a company, whatever risk you feel is appropriate for your own trading situation, consider that there is the extra risk that HMRC might prosecute you if there is any evidence of tax evasion of any sort in your supply chain. If your company fails because of bad decisions on your part then it seems clear HMRC will blame you for not being diligent.

I would also advise checking companies house, if the business you are trading with is a limited company. Check they exist and that their filing is up to date. This is an easy check to do. I strongly recommend this as a free check that anyone can do, even if you are not a member of SIBA. Also check out the directors, and search as if they might be trying to hide something, because some do. Directors can have different personas on companies house by entering a different addresses, or using nicknames or shortened version of their names, or by missing out middle names etc.

Oh, and check they are VAT registered. It's easy to do for any EU company.

For me there is a further responsibility to your own company. Yes, I know, when you go into business, as an entrepreneur. you take risks. You want your baby to work, you've dreamed of setting up a microbrewery for ever. Trading is hard, you need to make that sale, that beer needs to be shifted. You might not get paid for that beer. If your business ends up not working because you made bad choices, you might lose your business, perhaps you owe you family because they supported your mad-capped dream. Perhaps you have a charge on your house, you might lose that too.

But if you trade without doing the checks, or worse, you are aware that there is a risk and you carry on trading anyway, not only might you lose your business, and your house, and the respect of your family and friends, you might also end up in prison. Yes, I think it is that serious. HMRC know there are problems, and they are coming after everyone that is evading taxation and those that aide and abet it.


1We pay more for the privilege of employing people than the people pay themselves with respect to NI.

2Public and employee liability insurance is mandatory when in business, quite rightly so. It does seem wrong to me that something that is essential and correct to spend money on when in business is then taxed too.

3It concerns me that some brewers are happy to continue to supply businesses that are clearly so far adrift that the debt to the whole industry is so large that they cannot clearly be sustainable. Long term I do not believe it is helpful to the industry and is propagating an ever increasing debt issue in the brewing industry. I am concerned that the situation is not sustainable.

4I've just run a check, it came back within an hour. I'm pleased to say that the particular company came back with extremely good results, so they can have beer.

Thursday, 7 April 2016

Distracted by something that exists

So, craft beer doesn't exist eh?

Well, we call our beer craft, and it certainly does exist.

There are people who like to call their beery retail outlets craft beer bars. I know of quite a few that certainly exist. They often sell cask beer too, and generally do not sell the sort of ubiquitous mess-produced crap that we all want to fight against. They do sell keg beers, and can often be a lot more down with the kids that more traditional pubs.

I've been talking behind the scenes with a nice man called Oliver Brooks. He's been tapping my brain for ideas to do with setting up a micro-pub. Finally this year he got his ideas, and some of mine, up and running. It's called Tapster's Promise and it's in Colne, Lancashire. My reward for helping in a really very tiny way was for him to order some beer from me. I like people who buy my beer.

I like what he has done. It's small enough to be intimate and friendly1 but probably just about big enough to make sense. He's variously calling it a micro-pub or a craft beer bar. I guess I don't really care, but it definitely exists.

We've just heard that right now they have our stunning Azimuth IPA on keg, as well as Dark Energy. And just to be properly inclusive, Oliver has also got a cask of Continuum, reportedly tasting very tasty.

Good job I don't live in Colne, else he'd rob back all the money I got off him for my beer.


1This seems to be a trend that isn't mentioned often, but I think quite relevant to the craft beer thing. People like people. It is one of the things that is noticeable for craft breweries generally, the fact that there are people that the fan can find