As consumers opt for cheaper options during the cost of living crisis, the number of UK breweries going out of business has tripled in the past year, with smaller craft beer manufacturers most at risk.
According to most recent official Insolvency Service statistics analysed by Mazars, an audit, tax and advisory firm, 45 breweries entered insolvency in the 12 months ending March 31, compared with 15 in the previous year. The report added that more beer makers were likely to go bust as the competitive market and the squeeze on consumer spending continue to affect sales.
Paul Maloney, associate director at Mazars, said the insolvencies are largely of smaller craft breweries who have “suffered from an oversaturated market and from rising overheads”.
“Craft breweries have been struggling for some time but rising prices have brought their financial challenges to a head,” Maloney told The Guardian. “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.”
He added that the craft beer market has become “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,” he said. “Some of them will not make it.”
Breweries that have entered administration in the past 12 months include Newcastle’s Tyne Bank Brewery, which was founded in 2011 and had contracts with Morrisons and the Co-op. Wild Beer Co, a brewery based in Somerset with deals with Marks & Spencer and Waitrose, was bought out of administration in December, five years after raising £1.7m through crowdfunding in order to build a taproom.
Meanwhile, UK-based craft beer maker Brewdog announced earlier this year that it is expanding in China after partnering with brewing giant Budweiser. The joint venture with Budweiser China will see the Scottish firm’s Punk IPA and other beers brewed in China.
Brewdog also says it plans to open more bars in the world’s second largest economy. In a statement, Brewdog founder James Watt described the Budweiser partnership as “transformational” and said it would bring the craft brewery to “every corner of the world’s biggest beer market”. Under the deal, Brewdog said it expects its beers would begin to be produced at Budweiser China’s Putian craft brewery, in the south-eastern province of Fujian.
To use this website you must be aged 18 years or over. Please verify your age before entering the site.
