Black Sheep ‘bears the scars’ as it tumbles to a loss

Robert Theakston, managing director, told the Yorkshire Post that it has been “a very challenging year” for Black Sheep, but that he is positive about its future.

The Masham-based company, which was established more than 20 years ago, recorded a turnover of £18.8m in the year to the end of March 2013, down from £19.9m the previous year. Pre-tax losses for the year were around £740,000, compared to a pre-tax profit of £504,000 in 2012.

Mr Theakston said: “We bear the scars of a difficult trading environment, where small regional brewers like ourselves not benefiting from the Government’s ‘progressive beer duty’ policy, and not having a pub estate to support the business, are finding it tough.”

The so-called ‘progressive beer duty’ offers 50 per cent tax relief to brewers producing relatively small quantities. But bigger brewers insist that such a favourable tax environment for low-volume producers provides a powerful incentive for microbreweries to remain micro, while encouraging the emergence of further small brewing enterprises.

Mr Theakston added that the smaller brewers use the tax relief to sell their beer at cheaper rates than those not benefiting from the scheme.

Black Sheep’s loss before tax of £740,000 included £197,000 of exceptional items, including voluntary redundancy costs of £61,000.

The company said in the accounts that it is “regretted, but perhaps understandable”, that this year it will not declare a dividend.

But Mr Theakston was optimistic about the firm’s future. “There is a long history of brewing in our family and this is not the first time we have experienced difficult times in the brewing industry, and I think this gives us an exciting opportunity to push Black Sheep on into the future.

“In response to the market, diversification is key but I would like to say we are totally committed to cask beer, that is what the business was founded on and we remain 100 per cent behind.

“So much so we have installed a small five-barrel micro plant which allows us to create new and interesting cask beers that you will see on the bar soon.” Black Sheep has invested £50,000 in the new equipment.

Black Sheep’s existing main brewhouse has a minimum brew run of 50 barrels, which has limited its ability to develop new beers.

Mr Theakston added: “We are introducing a keg version of our Best bitter, giving us opportunity’s in different markets, as well as continuing the strong growth of our bottle beers in the off trade, and further developing our export trade.”

The Black Sheep Brewery in Masham made its first beer in 1992 after being built up by Paul Theakston, whose family had brewed in the area for six generations.