Council grants fee relief to proposed Goulburn brewery

Tribe Beweries Pty Ltd (formerly Brewpack) CEO Anton Szpitalak said the move at Tuesday night’s meeting sent a clear message that the council wanted to promote business and growth.

“I’m very happy with the outcome and it’s an incentive program that very much aligns us with the council’s aim,” he said.

Councillors decided to grant a deferral on section 64 water and sewer charges in the first year for the planned $30 million brewery at South Goulburn. These will be paid at the end of year two, and then subsequently at the end of each financial year’s operation.

Cr Margaret O’Neill also successfully argued for a 50 per cent reduction on these charges, conditional on the company creating 10 new jobs annually, or 30 over three years. These employees must be from the Goulburn Mulwaree council area.

The discount means the council forgoes $3, 285,000 in section 64 fees over five years, a regime under which developers effectively “buy in” to the infrastructure.

But Mr Szpitalak says that’s a small price to pay for a major investment that will ultimately create 150 jobs for Goulburn. He argues his company is not seeking millions of dollars in subsidies, but a reduction in the amount it will pay the council for an employment generating enterprise.

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“We are seeking to create a global hub of premium beverage production and its associated benefits – skilled employees, national and international visitors and associated economic activity,” Mr Szpitalak wrote to the council.

He said other brewery developments, smaller than his, had won larger unconditional incentives interstate, including Brewdog in Queensland.

Moreover, his company’s plans had “more than doubled” since winning council approval for the project in 2014. It is now expanding, rather than relocating its Smeaton Grange operation to Goulburn. 

The Brewery would be located in the former Coles Myer Distribution Centre on the corner of Ducks Lane and Hume Street. 

It will initially manufacture up to 30 million litres of craft beers annually but will also churn out ciders, soft drinks, RTDs and boutique non-alcoholic beverages.

Mr Szpitalak describes it as a state-of-the-art facility, pegged to be the largest and “most sophisticated” of its kind in Australia, with “best in class” brewing and packaging technology. Eventual production is expected to total 70 million litres.

He told Tuesday’s meeting that he was disappointed that the report to councillors did not mention his proposal to tie employment targets to the reduction in water and sewer charges.

Staff had written a detailed report. Utilities director Grant Moller recommended deferred payment in the first year and subsequent charges payable only at the end of financial years, based on actual rather than predicted usage. But he warned against setting a larger precedent.

“(The company) will be a large water user (about 27.3 megalitres in its first year) and will have considerable discharge into the sewer scheme. They already have approval to receive the Special Industry Water Charge, which is a 42 per cent discount on the current residential usage charge,” Mr Moller wrote.

“Although the section 64 fees are substantial, it is worth noting that there are other land developers in the region who also pay substantial fees to buy into the council’s infrastructure.”

But Cr O’Neill argued the council had to “spend money to make money.” She cited the abattoirs, Supertex and Menduni Industries as large businesses that had received council assistance in the past.

“A lot of work has gone into negotiations with the developer,” she told the meeting.

“We’ve been out there trying to find business and jobs for Goulburn and we have an opportunity here. We as a councillors have been putting the State Government down for not doing things for Goulburn. If we’re to get ahead, we have to start giving, not taking.”

She proposed an alternative motion, which won support from the majority of her colleagues.

However, Deputy Mayor Alf Walker voted against the move. He asked Mr Moller what impact the $3.285m in forgone charges would have. Mr Moller replied that it was a loss and would affect future capital works, but how that was recouped – either through deferred projects or via rates – was a council decision.

Cr Walker said his “risk appetite” was not comfortable with creating such a large incentive, given that the company had already received the special industrial water rate.

“Yes, it’s important to create opportunities for the city but at the end of the day, we have a governance role. We are directors of a business...and the decision we have to make is how far we go with incentives before impacting on the bottom line.”

Cr Peter Walker disagreed. He said the fee relief shouldn’t be seen as a loss, but a gain that the council wouldn’t have had otherwise. Together with jobs, beautification of the city’s south and ensuring the industry’s longevity, he argued it would have many flow-on benefits.

“We have been knocking on doors for business to come here...This will allow Goulburn to blossom and show people just who we are,” he said.

After the meeting, Mayor Bob Kirk endorsed this view. He told The Post he didn’t believe in handouts to companies but was comfortable with this arrangement because it tied the company to preset targets. If it didn’t achieve them, the discount wouldn’t apply.

Tribe Breweries enlisted former Mayor and now government relations consultant Geoff Kettle to help argue the case. Mr Kettle acknowledged he met with Cr O’Neill, Cr Kirk and general manager Warwick Bennett before the meeting. He and Mr Szpitalak also requested a meeting upon seeing Tuesday’s report. They briefed councillors before the forum.

Mr Kettle commended the council for the decision and for its work spruiking Goulburn’s credentials to the State Government.

“It flags to those businesses that the council is not just walking the walk but talking the talk,” he said.

Mr Szpitalak said the $30m investment represented substantial growth anticipated for the Goulburn complex over time, but also an upgrade in the company’s quality and capabilities. More exports are planned.

Asked whether he would have withdrawn the project if the lower fees weren’t granted, he said without them, he would have had to substantially change the plans. 

Preliminary infrastructure works are underway at the Brewery. Mr Szpitalak said it was expected to be operational in September and staff recruitment would occur “very soon.”