By Peter Schwartzstein
LONDON | Tue Oct 23, 2012 9:20am EDT
LONDON (Reuters) - A single vat bubbles languidly in the corner, while the air in the small, high-ceilinged space under a South London railway arch slowly fills with a zesty, hoppy smell, as the latest batch of Black India Pale Ale gradually fermented.
This is the Kernel microbrewery, one of many new kids on the British beer block who are bucking the downward national trend in beer drinking.
Where once the big, multi-national beer corporations accounted for the lion's share of brewery growth, now small, independent brewers with names like Beavertown Neck Oil, East London Jamboree and Hackney Hopster that are leading the way.
"This stuff's great, way better than the big brand beers," Max Marcus told Reuters as he cradled an early afternoon pint of Camden Ink at the Exmouth Arms in London's Clerkenwell area.
Microbrewers are tapping into what many see as a weariness with big, established brands.
"People are moving away from the mainstream rubbish," Andrew Turner of the recently opened London Fields brewery said. "They want to drink good local stuff."
That 158 breweries have opened within the past year alone would appear to bear out microbrewers' contention that they are merely tapping into renewed interest in Britain's ale heritage.
"We're easily impressed by exciting Fosters adverts, and so we buy their product," said Roger Protz, author of the authoritative "Good Beer Guide. "But we're tired of drinking the advertising."
Apart from the taste, small brewers have also benefited from tax breaks.
The so-called progressive beer duty offers 50 percent tax relief to brewers producing relatively small quantities.
Unsurprisingly, perhaps, bigger brewers are crying foul.
They insist that such a favorable tax environment for low volume producers provides a powerful incentive for microbreweries to remain micro, while encouraging the emergence of further small brewing enterprises.
And they believe the appeal of cask beer is such that even within the highly competitive London market, there's plenty of custom to go round.
"The demand is out there, people enjoy our products," said Tanya Marsh of the Kernel Brewery in Bermondsey, South London, which has recently moved to a much bigger site.
CRYING INTO THEIR BEER
Microbreweries have seen their numbers in Britain rise above 1,000 for the first time in over 70 years, in contrast to the situation elsewhere in the industry.
Domestic production of beer has dropped from 39 million barrels in 1974 to 27 million last year, as Britons' affection for their national drink has waned.
Conscious of microbreweries' success with cask ale, big brewers are waking up to the potential of more traditional beers.
Some industry analysts think that Molson Coors' 2011 takeover of Sharps, the small Cornish producer of the popular Doom Bar beer, is the first in a process of microbrewery buy outs.
"These companies have seen that the beer market is changing - consolidation of the industry is going to be the trend," Protz said.
Many microbrewers insist they would never sell out. Above all, many appreciate that their success resides in their charming local appeal.
Not that they don't have their problems. The smaller fry, for example, simply cannot compete on cost.
Michael Cox, owner of the Still and Star free house in the heart of the City of London, estimates that a barrel of microbrewed beer will generally set him back about 70 pounds ($110), against the 50 pounds he usually pays for a barrel of a more mainstream beer.
For all their legions of new admirers, microbreweries often find themselves shut out of pub distribution networks that balk at elevated prices and the logistical challenges posed by micro-brewers' inability to produce large quantities on demand.
Such struggles make microbrewed beer's success all the more striking.
But Still and Star publican Cox says that it's microbrewed beer's quality that will ensure its continued success.
"I buy beer from small, independent brewers, because I know that even though it's more expensive, it's just better beer."
(Editing by Stephen Addision)
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