Thu 3rd Oct 2013 - Black Sheep turns to keg after substantial loss Black Sheep Brewery turns to keg after substantial loss: Black Sheep Brewery, the Masham, Yorkshire-based brewer headed by Robert Theakston, has reported a substantial loss of £740,000 in the year to 31 March after losing 6,000 barrels of pub company business. It made a pre-tax profit of £504,000 the year before. The company saw turnover drop 5.4% to £18.79m, down from £19.86m the year before. Managing director Robert Theakston said: “This year, given the aggressive driving of Doombar by Coors into the market and the pub groups buying increasing amounts of microbrewery cask beer, we have seen our Best Bitter hit particularly hard, and volume has dropped way faster than we have been able to control. As a result, during the year, we lost just short of 6,000 barrels in the national pubco sector – this represents 90% of our volume drop for the entire year. We are totally focused on re-housing profitable volume and controlling further loss of barrelage.” The company has restructured its sales team and is to introduce keg Best Bitter. Theakston said: “I am aware of the preconceptions surrounding keg, but the opportunity the keg market brings is not to be dismissed. It will allow us to reach into the types of venues that can’t justify cask beer. There are an awful lot of sports clubs, hotels and restaurants than can only take keg beer that we currently can’t trade in. We have also installed a five-barrel brew plant to give us the flexibility to produce the new interesting beers that the current market pace demands.” Theakston reported that the £740,000 loss included exceptional items of £197,000. He said: “Duty still accounts for £8m of our turnover. There remains a constant threat from the microbrewery explosion, and the cheap beer they are able to sell only serves to artificially drag down the wholesale price of cask beer, thus making it very difficult for a brewery paying full duty to be competitive. Nonetheless, we have spent a significant amount of time developing our recovery plans for the next 18 months and we fully expect to turn the business back into a profitable one within that timescale.” Chairman Paul Theakston said he was confident about the business: “Our total volume sold into local direct trade, wholesalers and take-home declined by only 1.3% in the face of a 5.1% decline in the national beer market. Our Achilles heel has always been in our cask beer sales to the national pub companies, where downsizing their estates and a policy of buying an increasing proportion of their cask beers from microbrewers, thus taking advantage of a significantly reduced buying-in cost through Progressive Beer Duty, has been the order of the day.”