The beer brewing bubble has burst
After years of growth, the number of beer makers is falling
THE boom in breweries was already stalling before the pandemic - now the industry has “all but been forgotten about”. Figures from the Office for National Statistics have revealed that there were around 1,420 manufacturers of beer across the UK as of March this year.
The number is down from around 1,440 breweries that were operating nationally in March 2019 - the first time the figure has dropped in at least the last decade.
Figures go back to 2010, when there were just 570 breweries in the UK, meaning the figure had more than doubled before the dip seen in the last year.
It suggests the boom in new brewers was already slowing down or reversing even before the pandemic had kicked in, raising concerns that the real impact of Covid has yet to be felt.
Industry experts say that breweries will need significant long-term funding and support to avoid further closures.
The vast majority of brewers are what the ONS refer to as micro businesses - those with fewer than 10 employees.
The number of these businesses fell from 1,210 in March 2019 to 1,180 in March 2020 - while the number of small brewers (with 10-49 employees) increased from 180 to 195, and the number of medium and large brewers stayed the same
The long-term boom in these smaller businesses is partly down to a surge in the popularity of craft beer, with increasing demand for more choice and specialist options such as vegan or gluten free beer.
The craft beer revolution was also fuelled by something called “small brewers’ relief” (SBR) - a tax break introduced in 2002 by Gordon Brown.
Since then, smaller breweries have benefitted from paying 50% less beer duty than larger beer makers.
These tax breaks are now under threat, with the Treasury considering reforms to SBR over concerns that it has actually curtailed growth in some respects.
The Small Brewers Duty Reform Coalition (SBDRC) argue that the scheme incentivises breweries to cut down on production to retain a cost advantage over those who do expand, resulting in fewer jobs.
However, the Society of Independent Brewers (Siba) say that the majority of small brewers use the relief to invest in their business to grow and pay down debt, and if it changes some will no longer be able to continue making beer.
Nik Antona, national chairman of CAMRA, said: “Many breweries have fought hard and the majority have survived the first lockdown, but it’s clear the industry was already in a vulnerable position when Covid-19 hit.
“Since then, breweries have all but been forgotten about, and may even be hit with higher taxes as the Government considers changes to Small Brewers Relief.
“This is a pivotal time that could make or break the industry. Our pubs and breweries are going to need significant long-term support and funding throughout the coming months to survive.
“Otherwise, I expect to substantial closures in future.”
The figures from the ONS reflect CAMRA’s own findings - their Good Beer Guide 2021 also found that the see number of breweries in the UK dipped between 2019 and 2020.
It’s the first time CAMRA’s guide has recorded a decline in numbers since the explosion in UK breweries started in 2008.
While 163 breweries have opened this year and are newly listed in the Guide, many more have closed their doors, reducing net figures.
In the foreword to the guide, celebrity chef Tom Kerridge said: “These figures are an early indication that all is not as it should be following a difficult year of lockdown restriction and social distancing measures.
“While every sector across the UK has felt the burden of Covid-19, brewers and pubs have most certainly taken the brunt of the impact.
“The one thing that I think we have all missed during lockdown is human connection and social interaction, which above all else, is everything that the Great British Pub provides - a warm, happy and friendly place for people to drink and eat.
“It is imperative that we continue to support our breweries and pubs to preserve them for generations to come.”