Lower entry costs for budding microbrewers

(From left) NTU engineering students Rahul Immandira, Abilash Subbaraman and Heetesh Alwani, founders of Binjai Brew, who made headlines for brewing beer in their university hostel.
(From left) NTU engineering students Rahul Immandira, Abilash Subbaraman and Heetesh Alwani, founders of Binjai Brew, who made headlines for brewing beer in their university hostel.PHOTO: ST FILE

They can soon choose to pay pro-rated licence fee instead of entire $8.4k annual fee up front

From May 1, start-ups in the brewing industry will have something to raise their glasses to.

New microbreweries will get the option to pay a pro-rated licence fee instead of the whole annual fee of $8,400 up front.

The fee will be $2,100 per quarter in the first year, and business owners will be able to get a refund if they give up their licence early.

Senior Minister of State for Trade and Industry and Education Chee Hong Tat, who announced the new framework yesterday, said that this would allow budding microbrewers to test new business models or products without incurring high entry costs.

Mr Chee said: "In other words, a start-up only needs to pay for the duration when they are in operation instead of forking out a lump sum for the annual licence, when it is not certain at the beginning how long they will remain in business."

He was speaking at student-led start-up conference Unicon 2019, which was held at the National University of Singapore.

The Pro-Enterprise Panel (PEP), which encourages a pro-business environment here, worked with the Singapore Customs to implement the new framework for microbreweries after receiving suggestions.

 
 

In his speech, Mr Chee said he had spoken to the three Binjai Brew founders who made headlines in April last year for brewing beer in their Nanyang Technological University hostel.

He had asked the engineering students - Mr Rahul Immandira, Mr Abilash Subbaraman and Mr Heetesh Alwani - about their plans and how the PEP can support them.

The trio, who have since partnered a microbrewery to produce their beer, had asked Mr Chee if more could be done to help entrepreneurs like themselves.

Until 2012, microbreweries had to pay the same annual fee as large-scale breweries - $43,000.

But that year, the Singapore Customs introduced a microbrewery licence with an annual fee of $8,400. It allows new or smaller businesses to work with existing breweries to produce beer and test their flavours in the market before deciding to expand commercially.

Mr Chee said: "This idea of lowering entry barriers to encourage entrepreneurship can also be applied to other regulatory licences. I encourage the business community and our government agencies to work together with PEP to explore these possibilities."

A version of this article appeared in the print edition of The Sunday Times on February 24, 2019, with the headline 'Lower entry costs for budding microbrewers'. Print Edition | Subscribe