The new venture will also look to open a chain of pubs

The new venture will also look to open a chain of pubs

Two Scottish microbreweries are hoping a planned merger will help push exports up to a third of total sales.

The Isle of Skye Brewing Company and Isle of Arran Brewery expect to finalise the merger early next year, and will immediately target overseas markets including the US and Japan, Skye Brewing MD Angus MacRuary told just-drinks today (5 November). The increased capacity should help boost exports from 5% of sales to a target of about 30% within three years, MacRuary said.

“I used to describe our exports as vanity sales,” he said. “But now we will be doing that on a much larger scale, it'll be no longer vanity, it'll make commercial sense.”

The new venture, which is expected to have the Arran Brewery name, will boost each brewer's capacity by 250%, including facility upgrades that should come online next year, MacRuary said. Turnover is expected to be about GBP1.2m (US$1.9m).

Arran Brewery MD Gerald Michaluk also plans to open a bottling plant in mainland Scotland within two years to reduce costs from outside bottlers.

MacRuary added that exports bring back higher margins to microbreweries because of excise costs within the UK.

“Excise duty comes out of the equation when you go abroad,” he said. “All you're looking at is your costs plus your margin, so we can be competitive in the export market.”

However, MacRuary said that he has “barely scratched” the UK market and will continue to chase increased sales in England.

The company hopes to emulate the success of other Scottish micro-brewers, such as BrewDog, with a chain of pubs. MacRuary said the new pubs will target an older audience than competitors.