Lockdown Part 2

On Tuesday (October 13) the government decided to once again close all bars and restaurants for at least four weeks. The number of corona infections has risen rapidly in the last few weeks. So rapidly in fact that the Netherlands (and Belgium) are now among the nations with the highest number of daily infections. For two weeks the government tried to curtail it by adding a few minor restrictions. They did not help. To prevent the hospitals  being swamped by corona patients everything is done to not have too many people in the same space.

Bars and restaurants already had a difficult time during the spring when everything closed. The intervening period wasn’t great with fewer tourists and people who were still apprehensive to show up. Sure the government will try and help out but some owners will decide to pull the plug after this new setback.

Blame

So who is to blame for all of this? The government could have been more strict in their decisions. They were not very clear about what needed to be done. Where other countries have strict lines of number of infections that when crossed will lead to new restrictions we decided not to. Prime minister Rutte seems to rely on the common sense of people. But the people let him down. Where in most countries people just did what they needed to do we flaunt the rules and social constructs and just do what we want. Seemingly without any regard for those around us. We complain that we are restricted in our freedom. Yet no other country in Europe has as much freedom to move around as we do.

Breweries

The  breweries seem to have done ok. The first lockdown period made them aware that setting up online shops and pickup points would help and it did. The sales of bottles went up as well with people opting to drink more at home and not in bars. They will likely survive the next phase as well, though the breweries with pubs will have it harder.

Prohibition?

The police union has suggested that the best thing to do would be a complete prohibition of alcohol sales. Alcohol seems to play a part in the spread of the virus. Bars closed at 10 at night for a while and huge lines formed in front of supermarkets for people to get beer and continue drinking and partying at home. And yes, it seems alcohol at the moment is doing more bad than good with huge outbreaks happening during parties, sometimes in cafes. Sure, not the more thinking people of IPA and sour drinkers but still. And if you read this and are afraid you won’t have enough alcohol for the coming weeks then maybe you should get help first before raiding the supermarket for some Schultenbrau.

Let’s hope it doesn’t come to the total ban of alcohol sales. This would mean that many more people will lose their jobs. With around 600 breweries in this country (not all professional) many depend on the income of selling beer. And let’s not even start thinking about all the liquor store owners, employees, suppliers etc. With bars closed shops are the only remaining thing.

How can you help

Stay the f&#* at home! And if you do have to leave the house wear a facemask. The sooner we get the hospitals empty again the better. In the meantime buy your beer directly from the brewery or from a local liquor store. Some (beer) distributors have opened the doors too for private buyers. Check out in your area what is available. And think of those around you. We can do this!

Corona and Breweries, Part I

This is part I of a hopefully not too long series of how the corona virus is affecting the world of Dutch breweries. Starting with the breweries, I will also discuss how it influences bars and shops.

It has been over a month now since the bars and restaurants in the entire county closed. Everyone involved with beer has been hit hard. The bars are of course completely closed and they try to make a bit of money by selling beer and food for takeaway. Shops other than supermarkets have in some cases seen losses of 50% or more. But hardest hit seem to be the breweries.

Breweries have lost most, if not all, of their primary sources of income. The bars are completely closed, the sale of kegs down to 0. Sales of bottles have gone down as well to the specialty stores. Only those selling to supermarkets seem to be doing ok but tanks are empty, in many cases for the first time in years.

Times like this ask to be inventive. Many breweries have started selling beer directly at the brewery. Something that in normal times is not allowed but this government has decided not to interfere in most cities and counties. But you can only sell so much, and only to people who really want it. It doesn’t make up for all the other sales. Often it is the only way to generate at least some income. Sure, it might take a tiny bit away from the shops, but most people buy one bottle from a brewery together with bottles from other breweries. Here the brewery can sell a box of beer at once. These small sales though can only recoup about 20% or less or regular sales. Yes, you read that correctly, many breweries have lost 80% of their income.

Government Help

The government is providing some help, but this is not reaching all the breweries. The government works with a list of business that they deem need help in this crisis. Breweries at the start were not on that list. They will get some deferrals for income taxes and the government can pay a large chunk of the salaries if employees cannot work anymore, this up to 90% if a company has lost 100% of its business.. But this is not including other parts of the salaries like labour costs, pensions and paid vacation. These costs keep adding up.

Restaurants and bars are on the list. Brewpubs in most cases are not. If your entry into the Chamber of Commerce mentions a brewery first and a brewpub second, you are not on the list so you don’t get the money a restaurant would get. It was only on the 28th of April that it was decided that businesses could get help (a one time sum of € 4.000) for their second type of business, like a brewpub/restaurant.

Bars and restaurants have closed, meaning nearly 100% of all kegs from breweries are not being sold at the moment. The distributors of this beer are getting government support, breweries luckily now get some as well. But the distributors don’t get paid anymore by the bars, so they cannot pay the brewers, leaving the breweries without money from that side.

Deferral

Income tax has been postponed for a while so breweries don’t have to worry about that just now. But that doesn’t mean that it doesn’t have to be repaid. There’s a big chance this will have to be done again when the bars and restaurants are up and running again. The question for the government now is how the breweries are going to repay it and in what time period. With a looming recession we don’t really know if people will start going to bars and restaurants again like they did before.

The Catch-22 of bank loans

If you were a healthy company before corona hit you can get a loan. But because the economic outlook at the moment is not great they are hesitant to just give you a loan, unless you hook up with a company that offers loan but against staggering interest. And the costs that are not being paid right now (taxes for example) will have to be repaid later, adding another figure of money a brewery won’t be able to pay back. The government is pushing the banks to offer loans, the banks say ‘but they cannot pay it back’. The government and brewers say: ‘yes dear banks, that’s the problem and that’s why they need the loans’. And so the cycle continues. Breweries in most cases also have nothing to put up for the loan, another reason banks are hesitant.

Rent

Big breweries often also lease properties in exchange for their beer being served there. These bars are trying to get discounts on rents. In some cases this has already gone down 50%, in other cases breweries (like Haacht) have decided not to ask for any rent during this period. Smaller craft breweries don’t have constructions like this and will have to pay the rent of the brewery space.  So the small brewers are not helped in this scheme and breweries with brewpubs are doubly hurt.

The brewery landscape in one year

It is undeniably true that some breweries won’t be able to come through this. CRAFT, (the organization where all craft brewers are part of) issued a statement that 50% of all breweries are in grave danger.

Michel Ordeman of Jopen, also the head of CRAFT, says that small breweries provide a lot of work as well. Not only in the breweries but also in the brewpubs and restaurants.

First of all we don’t know yet how long bars and restaurants will be closed. So far until at least May 20, but it could be longer if we as a nation decide to go outside en masse again and not stick to social distancing. And if everything does open again nothing is sure as well. Some breweries are going to offer free beer or heavily discounted beer to bars. This could lead to a new price war and might force some breweries who cannot afford this to fold.

50% of all breweries left after all this is over? A shakeup was bound to happen, but like this? The beer shops, bars and festivals will look very different in a year.

Support your local brewer, especially in these strange times

On Sunday afternoon, March 15, the Dutch government took the unprecedented step of closing all restaurants and bars and to keep children home. What followed was a frantic hour-and-a-half to give customers their last meals and drinks before closing the door at 6 pm. This will last until at least April 6th although no one seems to believe things will open again a day later. Corona is here and it will stay for the time being.

That night instagram and facebook were full of pictures of unlit, empty bars. Chairs and stools on tables, not a customer in sight. The streets in Amsterdam and Utrecht, always busy with locals and tourists, are now mostly empty.

No customers means no income. The government is now trying to everything in its power to try and keep all businesses running. People will still be paid and businesses will not have to pay their taxes immediately. Banks are not asking small businesses to pay back their loans straight away but have halted this for 6 months. I will never vote for any of the political parties in the cabinet right now but they are trying to keep the country running. Sometimes it is a good thing to live in one of the richest countries in the world.

This governemt is also not standing in the way of any ideas to keep getting an income. Many breweries are now selling beer online or are driving around the city delivering beer. Or you can just drive to the brewery and buy it yourself directly from the brewery. This has to be done to keep things running, some breweries had 0 orders last week. If you don’t have bottles in a supermarket things are going to get very tough. Beer festivals have all been canceled until at least early May.

This crisis is going to change the world where we live in. We don’t know when it will be over and we don’t know how we are going to get out of this. But it is going to be naieve to think that in a year the same breweries and bars will still be around. Some tanks will fall dry and breweries will end operations.

And what can we do? As has been the mantra these last few years: support your local brewer! Bring your favorite bar to you! Some bars offer packages that they can bring to you, peanuts and games included. Order some beer at a local brewery and have them deliver it. The big guys will be fine once this corona thing is over (including Corona), but it is the smaller ones that will suffer. Support them now if you can. Let’s beat this together and keep beer culture alive.

I cannot visit places in the coming weeks, but I will see if I can still post things online now and again.

Take care my friends and hold on. Most of you will be fine, but you can seriously hurt others around you. And remember that the party that will happen once live has returned to normal will be epic.