Frequently Asked Questions
With a Close Brewery Rentals (CBR) partnership, a brewery benefits from the unrestricted use
of an identified stock of casks/kegs (containers) for a fixed cost. The brewery gets the full use of the
assets for as long as they are needed.
Frequently Asked Questions
What are the main advantages of renting casks and kegs?
The main practical advantages to renting this type of equipment surrounds the ability to outsource some costly
areas of container management (e.g. supply chain management, container tracking and repair). From a finance
perspective rental removes the need to tie up capital or debt lines, and container stocks can be managed in
line with business requirements. Cash released by the scheme can be used to accelerate growth and fund the
associated working capital requirements
It may also be possible to assign a rental agreement to another brewery, if for example a brewing contract is
not renewed. Thus containers can follow the contract and be kept separate from core populations.
What about my existing stock of containers?
CBR will be delighted to discuss buying back the existing container population and renting them back to the
brewery, releasing capital back into the business and matching future cost to income
What is the normal rental term?
The usual term will be 3 to 5 years. At the end of the initial rental period the containers can be returned or
the rental extended for as long as required by the brewery.
How will rentals be structured?
Rentals can, if required, be tailored to match expenditure to income. For example seasonal payments matched to
the traditional period of strong demand for a brewery's products.
How will containers be branded?
New containers will be supplied to the customers' specification, otherwise from new stocks that CBR holds.
Whilst CBR will have a prominent brand identity it is important the Brewery's colour banding is used to aid
identification.
How long will it take for casks or kegs to be delivered?
Where containers are required to a specific specification then the delivery time will be dependent upon
the lead time with the appropriate manufacturer. Otherwise CBR may be able to deliver quickly from an
existing stock of standard specification new containers.
What if the cask or keg is lost or stolen?
Customers are responsible for the safe keeping of the containers. However CBR will provide a unique
cask and keg tracking service to help a brewery to protect these assets. This will also provide the
brewery with valuable management information.
Is Close Brewery Rentals a member of Keg Watch?
Yes. CBR will log all cask serial numbers with Keg Watch and regularly monitor its site for any of
CBR's containers which are out of position. CBR will then liaise with its brewery customers regarding
their return.
Who is responsible for repair and refurbishment?
CBR can provide a repair and refurbishment service helping to maintain our casks and kegs in good
condition and extending their useful lives.
So is this rental agreement "off balance sheet"?
Yes, subject to the confirmation of the company's auditors, this should be a formality.
Can customers claim any tax allowances?
CBR will own the containers therefore the brewery will not be able to claim writing down allowances.
However customers will be able to offset the full rental against taxable profits.
Can customers claim the VAT charged on the rentals?
Providing they are registered for VAT, the VAT payable on the rentals can be reclaimed
What are the other advantages of container rental?
- There is a low initial outlay, often only one month's rental is required leaving existing credit lines intact for other needs.
- Reduced and regular monthly rentals helps budgeting.
- Off balance sheet accounting treatment improves returns ratios as the capital employed is not classed as capital of the brewery.
- There is no depreciation risk, CBR depreciates the asset.
- Cash and capital is conserved.
- The brewery does not assume long term risk of ownership; therefore the lease rental expense is fully deductible from the brewery's profit and loss account.
- Container rentals can cut through "red tape"; rentals are often accounted for in an organisation's operating budget rather than capital budget.
Additional benefits with sale and rent back include:
- 100% financing without significant down payments
- Generation of cash and or income gains.
- Elimination of asset residual risk
Other Products
In addition to the core activity of providing uniquely tailored packages for containers CBR will offer other facilities to encompass all
aspects of equipment required by breweries. Examples would be bottling, washing, filling and brewing plant, through to conveyor systems,
fork lift trucks, commercial vehicles and any other equipment required.