OnTap Magazine

44 | Summer 2024 | ontapmag.co.za I sit in a gorgeous market building outside of Stellenbosch overlooking beautifully curated gardens. It is the sort of space that has the potential to bring value to a neighbourhood as it brings tourists and with them, the much- needed job creation no government in the world would say no to. From the side of the road the building is partially hidden by natural gardens, designed to make the building blend into the agricultural land it is built upon. There is a large selection of wines available for sale, wines that are only from the region, due to objections from local wine farms that wines from further afield somehow endanger their own business. You can get coffees and food, but the beer taps are disconnected. Beer in this environment is seen as bringing in too many feet while not showcasing local products. This is where I ask, why no local craft beer then? “Because it’s beer,” my hostess, Tarryn, shrugs her shoulders and we both laugh at the oddly drawn distinction. This seems to be as close to an answer as they have received from the local municipality. They are currently running a social media campaign #bringbeerback to try and change that. Why is this an issue? Well, this is where the water seems perpetually muddy. There are local breweries that would benefit from exposure at a tourism centre—the industry is pretty much a collection of small businesses, and yet beer is excluded for reasons unknown. I have engaged with a few municipalities to try and understand why. Some of the problems come from a pre-conceived beer reputation; there is a view within some government institutions that beer is a drink of mass consumption and thus by extension, bad for society. Of course, anyone that has ever bought a craft beer realises that it is not a cheaply priced alcohol. Craft beer is in fact a drink of appreciation and can be any of around 259 beer styles. Lager is often mistaken as representing all “beer.” Black Label, Castle, Heineken and Windhoek (to mention a few large commercial beers) exist with their own brand following because they are all versions of lager beer and cater for different palates, mostly varying on the bitter-sweet balance. Craft breweries also make lagers, but generally as part of a wider range of styles. The concept behind craft beer, in fact, is very similar to wine in terms of bringing varieties of ingredients and aging techniques to different palates. Despite this similarity between wine and beer, the latter is often in the proverbial no-mans-land of regulation because of what seems like a further misconception around the market demographics and the source of the ingredients. Consider that AB InBev’s SAB sells both hops and malts to craft breweries, and in addition to this, with water being an important ingredient, there is even the presence of “terroir,” or regional variation in the natural resources used to produce the beer. Water and the “terroir” that makes up its mineral content and how they interact with malts, hops and yeast, give origin to established beer styles. The agricultural and tourism definitions in the by-laws dictate that wineries and distilleries can generally operate on agricultural land without a letter of municipal consent in some areas. The details around how large the site can be, as well as other legal requirements, are determined by the municipality’s by-laws and the liquor laws. Beer, however, is not currently defined by all municipalities. In fact, there were only four municipalities that I could identify, but it is possible there are more, because each municipality has a different format and set of definitions. Craft breweries then tend to find themselves on a “consent letter” of some sort, usually in industrial zoning or, only occasionally, in general business zoning. This ends up meaning that before they are allowed to even apply for a liquor manufacturing license, they need to get consent from a municipality. This usually takes a few months, but could be many months. This in turn represents months of rent being paid for a business that will only be able to apply for a licence to manufacture and serve or sell beer after a zoning certificate and consent letter are obtained. The liquor license takes around four to nine months, and again, sometimes longer. It is only upon obtaining the license that you can apply to register for excise. This process too takes many months and requires a bond registration, which is money that could be used to employ people in the new business. Instead, this money gets tied up in a bond account for SARS to claim if a brewery is unable to pay their excise. If all goes well, and a brewery is allowed to open, this small business would already be years into the process before starting to generate an income. This creates three very big problems for the craft beer industry: 1. It limits the participants to those who already have large sums of money at their disposal. This barrier to entry continues to lock people out of economic potential. 2. Craft breweries are not automated businesses and growth of volumes produced coincides with jobs created. The longer it takes to get going, the smaller the employment capacity is, stopping the industry from reaching its employment potential. 3. As a result of a brewery taking on so much potential debt, the business starts out with what is called a high debt-to-equity ratio, making the business less attractive to entrepreneurs and financiers. BEER’S REPUTATION THE IMPACT ON BEER