Cost of living delivers bitter blow to brewers
THE North East has seen one of the highest number of brewery closures in the last year, new figures suggest.
The figures from the SIBA UK Brewery Tracker show that the region has lost 12 breweries in the last year, with five of those coming in the first three months of 2024. That was the second highest number of closures, behind just the North West.
A number of big name brewers in the region have gone out of operation in the last year, including Tyne Bank, Alpha Data and Black Storm. Earlier this month the Great North Eastern Brewing Company went into administration, with its manager warning that others could follow due to the pressures of pub closures, Covid loans and rising costs.
Andy Slee, SIBA chief executive, said: “Seeing a 2% drop in the number of breweries in the UK is a small shift, but not the start to the year the industry had hoped for, and as we look ahead to what promises to be a busy summer for pubs I’m hopeful we’ll see the dial swing into the positive as we did in Q2 2023.
“There is no single reason breweries in the UK close, but for most it is a combination of rising costs and slowing sales caused by the cost of living crisis, which when compounded by the repayment of substantial Covid loan debts makes many businesses struggle to turn a sustainable profit. And whilst the price of a pint on the bar is already high, this simply isn’t passed on to small brewers – with the price of a pint largely eaten up by one of the highest levels of taxation in Europe, and huge increases in raw materials and production costs for brewers.”
SIBA said the Government’s differential rate of duty for draught beer in pubs and taprooms, which reduced tax on beer sold in pubs compared to shops and supermarkets, was a positive step. But the organisation wants the move to go further.
Mr Slee added: “Extending the draught duty relief to 20% would be a game-changer for the industry and go some way to keeping the price of a pint in pubs affordable, whilst ensuring independent breweries are able to turn a sustainable profit. Every brewery closure is a huge loss to its local community and economy, and whilst the Covid loans offered to businesses to keep them afloat were a necessary step we are seeing many businesses now struggle with the pressure of the short and inflexible payment terms offered.”