Craft breweries shutting as inflation bites
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Peninsula Group, HR and Health & Safety Experts
(Last updated )
Peninsula Group, HR and Health & Safety Experts
(Last updated )
The number of UK breweries going bust has tripled in the past year, jumping to 45 in the year to 31 March 2023, up from 15 in the previous year
The insolvencies are largely of smaller craft breweries which have suffered from an oversaturated market and rising overheads.
Even without the cost of living crisis there would have been a major shakeout in the market, as the boom in craft brewery start-ups meant that there were too many breweries competing for limited shelf space in supermarkets and bar space within pubs, warned Mazars.
‘Craft breweries have been struggling for some time but rising prices have brought their financial challenges to a head,’ said Paul Maloney, associate director at Mazars.
Smaller brewers have struggled with falling consumer spending when it comes to beer as the cost-of-living crisis has deepened.
Maloney said: ‘Craft brewers often offer ‘premium’ beers, but consumers are turning to cheaper options. As such, discounted brands produced by large international brewers and supermarket own brands are increasingly the choice for consumers.
‘The craft beer market became heavily overpopulated over the last decade. The cost of living crisis now means many of these brewers are fighting for a place in a shrinking market. Some of them will not make it.’
Small breweries often suffer from limited routes to market, lacking proper distribution channels to consumers. These smaller companies often do most of their business within local communities, relying on taprooms and supplying to local ‘bottle shops’. That has limited the turnover of many craft breweries, meaning that many were not able to reach breakeven.
In the past year Tyne Bank Brewery, which was funded through a crowdfunding campaign in 2015/16 and had contracts with Morrisons and the Co-op, went bust, while London-based Boxcar Brewery also called in administrators due to an ‘unworkable situation’ with landlords and debt issues.
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