What you need to know before starting a micro-brewery in South Africa

Legal firm Wright Rose-Innes recently published an information booklet on some of the most interesting questions they were asked over the last year.

One of the stand out questions is how one starts a micro-brewery in South Africa.

Micro-brewery’s have grown increasingly popular in South Africa over the last few years, with a number of craft breweries such as Devils Peak, Cape Brewing Company, and Black Horse all gaining international attention.

According to Wright Rose-Innes, to operate a micro-brewery where you manufacture liquor (at or below the threshold volume as prescribed by legislation) and sell it for retail purposes, you are required to obtain a micro-brewery or micro-manufacturing liquor licence.

This can typically be obtained from your provincial Liquor and Tourism Authority, it said.

“This authority issues various registration certificates for the sale and supply of liquor, which can be categorised into two main types namely on-consumption licences (restaurant/tavern) and off-consumption licences (microbrewery/liquor store/wine grocer),” said Wright Rose-Innes.

“An applicant for a micro-brewery licence may be a natural or juristic person such as a company or trust.

“The applicant will need to ensure that the premises are zoned for business use appropriate for the running of a micro-brewery and that any building plans or renovations, should such be required, are approved by the local government (after considering recommendations by the local building control officer).

“You don’t have to wait for your building work to be completed however, and may submit your application before you commence with the construction work.”

It added that from an equipment perspective, it is important that the correct brewing equipment is obtained and that it meets the requirements of applicable health and environmental specifications.

Should your brewery wish to cater for visitors, you will also need to look at aspects such as sufficient parking and health and safety compliance in respect of your potential patrons. Your identified location is also important for your licence application, it said.

“Your brewery should be at least 500 metres away from places of worship, educational institutions, schools and/or other similar facilities,” it said.

“As the public interest is taken into account by the liquor authority when considering licence applications, quite often licence applications are unsuccessful because neighbours or members of the public object to the issuing thereof. Factors such as contributing to tourism, creating employment etc. on the other hand can be factors that weigh in favour of an application.”

“Every application will have to go through a rigorous process before it can be approved by the liquor authority. Should you wish to start a micro-brewery it will be important that you understand the various steps and the information that needs to be correctly submitted with your application in order to position your application for positive consideration.

“Any non-compliance with the legal requirements will diminish your chances of successfully obtaining your licence and quash your dreams of opening up your own local brewery.”

Increasing competition

According to craft beer site, CraftBru, the number of artisanal beer brewers in South Africa has grown from about 30 in 2013, to a number closer to 200 five years later.

While this means that there are now more formal regulations and procedures and regulations, you can also expect to face steep competition.

According to a JTB Consulting report released at the end of 2017, the bulk of these breweries are based in the Western Cape – however steady demand has increased elsewhere in the country.

Speaking to JTB Consulting, Kevin Wood, owner of Darling Brew in the Western Cape, indicated that he expected local craft beer output to double over the course of 2018.

However he noted that Darling Brew had spent R52 million on building a new brewery to meet this demand, and there was massive scope for the growth of craft beer in  South Africa as the footprint for production is so small.

Read: South Africans are drinking themselves to death

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What you need to know before starting a micro-brewery in South Africa