New figures from SIBA show the UK brewing industry is seeing a high closure rate, with a net loss of 38 businesses in the last three months.
The figures, from the SIBA UK Brewery Tracker, show the UK total number of active brewers now stands at 1777, a drop of 38 since the end of the fourth quarter of 2023.
The year on year comparison shows a slightly more positive picture, with some regions seeing overall growth when compared to this time in 2023. The East has had a particularly strong 12 months with a +11 net growth rate, with the South East (+3) and South West (+2) seeing more moderate growth.
The UK year on year comparison is also down by 47, led primarily by a -19 net closure rate in the North West, -12 in the North East, and -11 in both Wales and the Midlands.
“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,” said SIBA chief executive Andy Slee.
“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.”
The government’s differential rate of duty for draught beer in pubs and taprooms — meaning there’s less tax on beer sold in pubs compared to shops and supermarkets — has been hailed as a hugely positive step. But SIBA says it must to go further to have a lasting impact.
Andy 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.”
