UK: Q1 sees 38 breweries close in the UK
The UK brewing industry has seen a net closure rate of 38 in the first quarter of 2024, new figures have shown, The Morning Advertiser reported on April 29.
The recently rebranded Society of Independent Brewers and Associates (SIBA)’s Brewery Tracker, which takes all brewery opens and closures into account, revealed the total number of active breweries in the UK currently stands at 1,777.
However, when looking at the data on a year-on-year basis, this was more positive with some regions seeing overall growth compared to last year.
The east saw a rise of 11 more breweries while the south-east was up three and south-west two.
The overall UK year-on-year comparison was down by 47, largely driven by 19 net closures in the north-west, 12 in the north-east and 11 in both the Midlands and Wales.
Chief executive Andy Slee 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 the second quarter of 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.
“While 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 tracker looked at the individual regions this quarter and found the south-east was hit the hardest with a net closure rate of 10.
The Midlands followed with seven net closures and Scotland saw six. Meanwhile, the north-east and north-west regions fared marginally better with each seeing a five net closure rate while the south-west saw four.
Moreover, the east region saw a moderate one closure rate during the first quarter of 2024 with Wales and Northern Ireland both seeing no change in the number of breweries.
The trade body also outlined while the Government’s differential duty rate for draught beer in pubs and taprooms means there is less tax on beer sold in pubs compared to the off-trade has been a hugely positive step, this must go further to have a lasting impact.
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, while ensuring independent breweries are able to turn a sustainable profit.
“Every brewery closure is a huge loss to its local community and economy and while 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.”
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