New microbreweries can pay pro-rated licence fee from May under new framework

(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

SINGAPORE - Something is brewing for aspiring start-ups in the microbrewery industry.

From May 1, new microbreweries will face lower entry barriers - they will have the option to pay a pro-rated licence fee instead of an annual fee of $8,400 upfront.

The licence fee will be $2,100 per quarter in the first year and business owners will be able 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 on Saturday (Feb 23), 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 startup 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 micro-brewery to produce their beer, had asked Mr Chee if more could be done to help entrepreneurs like themselves.

Previously, microbreweries paid the same annual fee as large-scale breweries. This cost about $43,000.

But in 2012, the Singapore Customs introduced a microbrewery licence with an annual fee of $8,400. This licence 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."