Thursday, August 29, 2013

The Craft Brewing Scene Heats Up

The Brewsky crew at their soon-to-open JP Nagar location

Bangalore is already India's craft brewing capitol and things are about to get more interesting as several new breweries come on-line. The importers of Geist have two brewpubs called Brewsky launching soon. One in JP Nagar and the other in Sarjapur. A new brewpub called Three Monkeys is going into the Gopalan Mall and they have already lost their first brewer. Both the Bier Club and Punjabi by Nature have new branches opening soon in Whitefield and Prost in Kormangala is now pouring. Toit has plans for a second location and will see two new breweries "bookend" them on 100 Foot Rd. One is part of the Vapour chain and I don't know much about the other. One thing I do know is that these newcomers will have to be good to compete with Toit. A 5HL German system has just been installed in the Sheraton Hotel. And I've even heard rumors of a brewpub going into the Inorbit mall, just down the street from Craftworks. I say the more the merrier but prospective brewery owners should consider that it's not easy to brew great beer - as some have already found out - and it's not an inexpensive business to get into. One would be well served by looking into the regulations before getting too far. Most states in India still do not yet allow brewpubs or microbreweries. The few that do and what I know of the regulations are:

Karnataka - Brewpubs only. 50% of installed capacity paid yearly in advance at the rate of 17Rs./liter. Wholesaling of kegs is not allowed. This is a major impediment to growing a small successful brewery especially for start-ups with less than ideal locations. One can only hope that things will improve but considering the difficulty that all of the existing breweries experienced this year in just renewing their license, I'm not very hopeful...

Maharashtra - Brewpubs & micros. Maximum production of 200,000 liters per year (way too low!). Wholesaling of kegs is possible but with the low production cap, hardly worth the trouble.

Haryana - Maximum production of 700,000 liters per year.

Goa - Brewpubs & micros allowed. 90% of yearly installed capacity paid in advance at varying tax rates, with the highest being 28 Rs./liter for brewpubs and 31 Rs./liter for micros depending on alcohol content and retail cost per 650ml. Way too complex and expensive!

West Bengal - Brewpubs only.

Punjab - Brewpubs & micros. Maximum production of 700,000 liters per year.

The Brewhouse at Toit

The process of opening a small brewery in all of these states is far from easy. The regulations are cumbersome and poorly thought-out. Taxation is excessive and most states want a large percentage of the excise tax paid in advance - which is the wrong approach. What the states should do is collect a "brewers bond" once from each brewery when a license is applied for - as is the case in many other countries. This bond would roll over from year to year if there is compliance and proper payment of tax and seized if not. Taxes should be paid quarterly and based on beer racked to serving tanks or kegs from fermentation tanks. The excise department should also inspect breweries for compliance and audit the books unannounced periodically. 

While there are many obstacles to opening a brewery in India, poor infrastructure also makes it a more expensive proposition than it is in many other countries that have reliable power, good water supplies and sewage treatment plants. A considerable sum will have to be spent to remedy these deficiencies. Some other considerations - malt takes three months to get here from Europe, is taxed excessively and with the rupee tumbling, getting quite expensive. There is a global shortage of the choicest hops making them difficult or impossible to obtain. And last but certainly not least, it can be difficult to recruit a talented brewmaster - the guy (or gal) who is responsible for beer quality and on whose shoulders the brewery's reputation rests.

Craftworks Beer News

  • Porter is back on-tap and will replace Stout for a short while.
  • A new batch of IPA is on-tap. I used Warminster Maris Otter malt in this one instead of Wyermann Pale Ale malt. The consensus is good.
  • Our 50th brew will be on-tap soon, an extra special Anniversary Ale (ESB) to commemorate our first year of operations!