Timothy Taylor still thriving in increasingly tough environment

TIMOTHY Taylor & Company saw sales increase by nine per cent last year despite an increasingly difficult environment for the beer industry.

The brewer of Landlord reported turnover of 22.6m in the year to September 2009, up from 20.7m the previous year, while pre-tax profits were 3.2m, up from 3.1m in 2008.

Charles Dent, managing director, told the Yorkshire Post: “We had a pleasing time with sales. We did well against trends.”

He said excise duty was the single largest cost of production and has risen by more than 25 per cent over the past two years.

It equated to around 6.5m last year, compared to the 1m that Timothy Taylor spent on ingredients for its products.

“It is a very unfair tax. You can’t have discrimination nowadays in most things – sex, religion, age – but in tax it is not a problem,” said Mr Dent.

The British Beer & Pub Association said that the tax system discourages the consumption of low-strength alcoholic drinks such as beer, which results in lower tax revenues, fewer jobs and more pubs closing.

Under the current regime, alcohol in the form of beer costs 42p per unit on average compared to 37p for vodka, 38p for gin, and 33p for cider in the off trade.

The BBPA is lobbying for a rebalancing of the duty rate between different types of drinks.

Brigid Simmonds, chief executive of BBPA, said: “Taxing beer fairly would create thousands of new jobs and substantial extra tax revenues.”

The organisation believes that the 7bn annual tax contribution from beer sales is close to revenue-maximising level and any further increase would lead to a fall in tax take.

Mr Dent said: “It’s got to the stage where the golden goose is being killed.”

He urged the coalition Government to consider very carefully the impact before any further increase on excise. Mr Dent added: “You should not be deceived into thinking that by putting the price of alcohol up you will solve the abuse of alcohol and the problems of alcohol.”

Despite this, the company is performing well, said Mr Dent, and last year brewed around 60,000 barrels of beer. Output has been growing progressively over the last decade.

The family-owned company spent 2.3m last year on work to improve production at its Keighley base and has so far built a new office and transport depot.

The company will spend a further 2.5m this year installing a new barrel wash and six new fermenters. This work should be complete by next April.

Mr Dent said the work will enable the brewer “to produce consistently and on time everything we have to, even when there’s a surge at Christmas, Easter and Bank Holiday weekends”.

Timothy Taylor appointed a new non-executive director this year, with a strong background in brewing and pubs.

Tim Clarke spent a decade as a stockbroker at Panmure Gordon specialising in brewers before moving into the industry and holding chief executive positions at Bass Leisure Retail and Mitchells & Butlers.

Mr Dent said: “He has always been a great fan of our beer and I felt very lucky to get him. He has a very good understanding of brewing and the experience and sensitivity to understand a family company and can see us in the context of the outside brewing world.”

Mr Dent said the strategy for Timothy Taylor was to “carry on brewing the best English ale and do the very best service to go with it and be a part of the best English pubs. On our pub side, which is one quarter of the business, deliver the best in food and drink and service in the pubs we have, which are managed or tenanted.”

According to the BBPA, 39 pubs are closing each week.

“The headline is lots of pubs are closing,” said Mr Dent, “but when you look under the surface the really good pubs are doing very well and are attracting customers that might have gone to a restaurant because they are doing a much better offer of food and it is a friendlier place to be.”

More than half of Timothy Taylor’s production now goes to pubs in the south of England.