Food and Drinks

12 Hong Kong breweries pull out of Beertopia craft beer festival over rising costs; I have to raise rents, founder says

Rent increases for stalls unaffordable and will force beer price rises for festival-goers, say alliance of craft brewers; seven-year-old festival founder defends charging them more, saying his rent for harbourfront site has risen 50 per cent

PUBLISHED : Tuesday, 28 August, 2018, 5:31pm
UPDATED : Tuesday, 28 August, 2018, 10:07pm

A dozen Hong Kong breweries have pulled out of the city’s biggest annual craft beer festival, Beertopia, citing rising costs.

In a Facebook message posted on Monday by the Hong Kong Brewers’ Guild, which has about 20 members, 12 of them, including Moonzen Brewery, Black Kite Brewery and Gweilo Beer, said they had decided not participate in this year’s Beertopia because they and their customers would have to pay more.

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But Jonathan So, the founder of the event, now in its seventh year, said he was paying 50 per cent more than last year to rent the Central harbourfront venue, yet ticket prices would be lower than in 2017 and food prices unchanged.

“Raising the stall prices is not passed to the consumers,” he said. “We have to share that with the vendors. Not everyone is happy to participate.”

The craft beer festival Beertopia will be held on October 5-6. Rohit Dugar, founder of Young Master Ales, one of the breweries boycotting the event, said: “Beertopia has been a craft-beer-focused event, with little or no participation from big brands. But the cost for consumers is creeping up. We told the organiser about this in the last few years, but this year it went too far.”

The costs of renting stalls varies depending on their size. Some hirers are charged commission on their beer sales. Two years ago, Dugar said, the commission was 20 per cent, but on the day the festival started, hirers were notified it would be doubled to 40 per cent because ticket sales were lower than expected.

Dugar said it was inevitable breweries would pass on cost increases to the consumer, who would pay significantly more for each beer they sampled.

Donald Yeung To-fung, marketing executive for Lion Rock Brewery, said the cost of renting a stall was a major financial concern for the three-year-old brewery.

“Before it was around HK$20,000 to rent the booth and we would just break even or lose a little bit, but when we inquired about this year’s event, we were quoted HK$28,000 to HK$30,000 and so there was no way we would even break even,” he said.

So said last year stall rental prices ranged from HK$9,000 to HK$17,000, while this year they were HK$11,000 to HK$24,000. Potential hirers had been notified of the increased cost of stalls in March. “The vendors may be complaining because they have to include costs of delivering the beers, manning the stalls, decoration, or maybe they are flying a brewer over,” he said.

Yeung said it was not necessary to hold Beertopia at the Central harbourfront event space, which was expensive to rent.

When we inquired about this year’s event, we were quoted HK$28,000 to HK$30,000 and so there was no way we would even break even
Donald Yeung To-fung, marketing executive for Lion Rock Brewery

“Craft beer people will go where the event is held, no matter if it is in Kowloon or Central. It’s better to be able to break even,” he said.

He added: “When we first started we needed Beertopia to promote ourselves, but now we can join other events like Wine & Dine, Ocean Park, Lan Kwai Fong Beer & Music Festival.”

Laszlo Raphael, co-founder of Moonzen Brewery, said Beertopia had shifted from its original focus of promoting local craft beers.

“When people go to a craft beer festival, they want to try local beers, not beers from other places,” he said.

He said sometimes consumers blamed vendors for raising the prices of beers at the festival, but it was the fault of the organisers.

“There isn’t much new at Beertopia this year. Though entry is cheaper, the tokens are more expensive. I think they’ll get more people in, but once they’re inside and they see the prices of the beers, they may not be as inclined to try more beers,” Raphael said.

“Business is business – it’s not personal, but we cannot support this type of business model. It’s not just about the booth; the organisers need to motivate people to go to Beertopia and that means having cheaper tokens so that people can try more beers.”

He added: “There will be other festivals in Hong Kong and we’ll continue to produce high-quality beers. We don’t want to be too sour about [Beertopia].”

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So said of the 12 breweries’ decision: “It’s a shame some local breweries are not participating. We would want to have as much local craft beer as possible, but they felt the prices were high.”

He said this year Beertopia was being held in October rather than September because there is a higher chance of better weather, and the rent for the harbourfront space was higher because the festival site was closer to the Hong Kong Observation Wheel than last year.

So said no big beer brands – such as Tiger, Singha, Tsing Tao, Heineken or Carlsberg – were taking part. “We have nearly 300 craft beers for people to try,” he said. There will also be beers from five to six local breweries that people can try.

Not everyone who attended Beertopia was a craft beer geek, So said, which meant he needed to entice visitors with food, a shisha garden, big tents, DJs, bands and artificial grass.

“We get compared to festivals in the region or back home [in North America], but Hong Kong is more expensive than other places. The rent [is] way more, it costs more to raise and store marquees, toilets, the cost of cleaners, these all trickle down to the consumer,” he said.

“Consumers are kind of aware of these high costs. Hotels and restaurants can hold craft beer events, but they can’t hold more than 200 people.”

Dugar of Young Master Ales said being able to host the event in a large space was Beertopia’s advantage, but it was time for breweries to do their own events, albeit they might be on a much smaller scale. For example, Lion Rock Brewery would have the Tap Takeover event at Hong Kong Island Taphouse in Tin Hau on September 1.

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Meanwhile, a week after Beertopia will be The Great Hong Kong Craft Beer Festival 2018 at PMQ in Central on October 12-13.