Alcohol suppliers, distributors rush to meet demand ahead of Apr 19 nightlife reopening

Singapore

ALCOHOL distributors in Singapore are scrambling to meet the surge in demand for booze from nightlife businesses, after the government's surprise announcement on Monday (Apr 4) that the sector can fully reopen from April 19.

The good news came a week after the latest easing of safe management measures that include lifting the ban on alcohol sale and consumption after 10.30 pm, and doubling the size of gatherings and dining-in groups to 10 people.

Tan Wee Han, the chief executive of Brewerkz under the Easy & Light Group, told The Business Times that he does not have much reserves of the beer that the company produces for its restaurants and its supply to clubs, hotels and other F&B establishments.

He added that it is just about able to meet the higher demand, and it would likely take about 4 to 6 weeks to build up its buffer inventory.

"It's a good problem, but nevertheless it is still a problem we have to deal with," said Tan.

The group's wine distribution arm, Crystal Wines, is expected to take up to 3 months to react to the higher demand, as it imports the wine it sells to restaurants, pubs, clubs and hotels, said Tan, who is an executive director there.

The company did not place orders for more stock as it did not know when the nightlife sector was going to reopen, he added.

Taking the cue from the opening up in Europe and other parts of the world earlier this year, wine supplier Asia Wine Network (AWN) had placed wine orders from the 12 countries it imports after the Chinese New Year in February.

However, due to supply chain disruptions, the shipment is only expected to arrive in May, said its founder and director Roderic Proniewski.

Supplying to hotels and F&B establishments, AWN saw an almost two-fold increase in sales since the latest relaxation of measures, but is still about 20 per cent lower compared to pre-pandemic levels, he said.

"We expect to see some shortages in April until our shipments come through in May. Apart from shipping delays, we have also seen operating costs going up by about 15 per cent because of higher costs of manpower, electricity, and imports," Proniewski said.

"I'm not expecting to hit pre-pandemic sales figures for now, probably only near September."

Craft brewery Lion Brewery - which supplies beer to bars, restaurants, pubs and hotels - has seen an increase in orders of late, which general manager Will Julius attributed to the longer operating hours of F&B establishments.

He shared some concerns about meeting demand that arose since the relaxation of alcohol consumption, which came with "almost no warning".

"We are happy that these measures have been relaxed, but the reality is there may be a bit of squeeze from suppliers generally as they struggle to keep up with the large increase in demand," said Julius.

It is still too early to say if the announcements will affect bulk sales, he added.

Meanwhile, Trouble Brewing's chief executive Joseph Barratt observed a 30 per cent increase in sales for the first week since Mar 29, but similarly noted that it is too early to tell what the impact from the resumption of the nightlife businesses would be.

"Our hope is that with F&B returning to life and increased international travel, we'll be in a position to make up the ground lost in the past 2 years," he said, noting that several clients had closed during the pandemic.

He added that the alcohol delivery company's main concern now is in the supply of malts and grains used to brew their beer.

"Where it would have previously taken 2 months for deliveries, the lead time now is around 4 months or more," he said.

AWN's Proniewski noted that deliveries are now about 50 to 60 per cent longer - what used to take a month before the pandemic now takes about 6 weeks, he said.

Higher freight costs, fuel prices and electricity tariffs were also worries cited by Lion City Meadery director Justin Herson.

Production-wise, the company is largely able to meet its increasing demand as their business model allows them to produce quantities that are "far larger" than other local brewers, he said.

The increase in orders has also not matched up to the level of sales the company witnessed pre-Covid. "In spite of that, the overall outlook is positive and we expect sales to ramp up at a moderate pace," Herson said.

As for brewery Rye & Pint, which supplies beer to establishments like Ce La Vi and Sixteen Ounces Craft Beer Bistro, its director Luther Goh said that some customers had pre-empted the easing of measures, resulting in a slight ramp up in production in the days leading up to Mar 29.

Goh noted that the growth in demand is manageable, as it had been producing beers at only 40 to 50 per cent of its total capacity, leaving plenty of room to scale up production. Prior to the pandemic, it had been about 80 per cent.

Alongside these craft breweries, household names Tiger Beer and Heineken assured that they will have enough supply as nightlife businesses open up.

A spokesperson for Asia Pacific Breweries Singapore, which owns the brands, said it is prepared to support bars, pubs and entertainment outlets in their reopening with the supply of its beers, as well as work closely with them on recovery plans.