Section 140: breweries
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
1.1 This section applies to purpose built breweries that are not generally let and are not capable of being valued on the rentals basis.
1.2 The majority of breweries in England and Wales comprise traditional non specialised industrial buildings and are valued on the rentals basis utilising local evidence.
2. List description and special category code
2.1 List Description: Brewery and Premises IX
2.2 SCAT code: 031 Suffix: V
3. Responsible team
3.1 This class of property is the responsibility of the Industrial and Crown Team within the National Specialists Unit (NSU).
4.1 This will occur between the responsible caseworkers within NSU Industrial team.
4.2 Correct use of the Rating Cost Guide and rating manual contractor’s basis advice should ensure consistent valuations.
5. Legal framework
5.1 In Thomas (VO) v Manor Vinegar Co Ltd (1960) LT 53 R & IT 269, it was held that thirteen vats were rateable plant and machinery as “vats” which were in the nature of a building or structure within the meaning of Class 4 of the 1927 Order, being constructed on the site by fitting together, even the smallest being of substantial size and all being permanent since they were intended to remain in situ while functioning, and being removable only when taken to pieces.
At the time the legislation did not contain the size criterion that was subsequently applied. In considering rateability now, regard must be had to the relevant Plant and Machinery Regulations.
5.2 In Re the appeal of Wand (VO) 1966, LT RA 45 the Tribunal held that 2 Lancashire Boilers and 3 Air Compressors were rateable. These items were at Strong’s Brewery at Romsey and the Member had no hesitation in finding that the boilers with their settings and flues were structures or in the nature of structures within the meaning of Class 4 of the 1960 Order and were therefore rateable. After reference to evidence and case law concerning air compressors the decision continues as follows: “An air compressor to be rateable is required only to be used ‘mainly’ for the generation of power and the only evidence before me is that the ‘most important’ use to which the pneumatic power from these particular compressors is put is to ‘actuate a pneumatic machine which packs bottles into crates’. This, in my opinion, makes them ‘a source of main or motive power’ and they will therefore be rateable if that is the ‘main’ use to which they are put and on the only evidence before me I think I must hold that this condition is fulfilled.”
5.3 However in Ind Coope Ltd v Burton-on-Trent CBC (1961) 32 DRA 46 LT the Tribunal held that certain air compressors in a brewery were not rateable on the grounds that they were process plant for adjusting pressure to fine limits to regulate the feed system for the carbonated chilled beer and the bottling process and were not a source of main or motive power.
6. Survey requirements
6.1.1 The buildings housing process plant are similar to conventional industrial buildings and should be referenced to GIA. In addition there are a range of support buildings such as offices, laboratories, control rooms etc.
6.2.1 The plant comprises mainly steel vessels and tanks, the vast majority of which will be excluded from rateability by virtue of exception (a) in Class 4 of The Valuation for Rating (Plant and Machinery) Regulations.
6.2.2 Most of these items are however supported by structural steelwork and it is anticipated that all but the smallest of items will include elements in respect of foundations, settings, fixed gantries, supports, platforms and staging.
7. Survey capture
7.1 Survey data is recorded manually in binders and electronically on the Non Bulk Server (NBS).
8. Valuation approach
8.1 These is no rental evidence for breweries of this type and the contractor’s basis of valuation should therefore be adopted.
8.2 Breweries of this type are not suitable for comparison with other breweries. Each can vary in terms of office accommodation, warehousing, packaging facilities and output can depend on individual shift patterns.
9. Valuation support
9.1 Valuations are held on the NBS.
9.2 Refer to the relevant practice Note.
9.3 Where there is doubt as to whether a brewery should be valued on a rentals or contractor’s basis, consult with NSU Industrial team before reaching a conclusion.
Practice note: 2017 - breweries
1. Market appraisal
The majority of breweries in England and Wales are valued on the rentals method and their valuations will be reliant on local rental evidence. This practice note relates to those purpose built breweries that are valued on the contractor’s basis of valuation.
The ongoing decline in the demand for beer has been matched with consolidation amongst the larger brewers. In the late 1980’s the ‘Big 6’ brewers had 80% of the market operating out of 40 breweries. In 2013 the ‘Big 4’ brewers had 76% of the market occupying 10 breweries.
2. Changes from the last practice note
The practice note for the 2000 rating list included co-ordination arrangements which are now dealt with in the Rating Manual section for the class.
3. Ratepayer discussions
There have been no discussions with the brewing industry.
4. Valuation scheme
There is no full scheme of valuation as Breweries valued on the contractor’s basis of valuation are managed by a limited number of specialist caseworkers who are part of the Industrial and Crown Team of the National Specialists Unit. The majority of costs are derived from the Valuation Office Cost Guide with guidance on costs for specialist buildings being given by BAMS.