Craft Breweries In Crisis As UK Closures Escalate

Nearly as many UK craft breweries closed in the first six months of 2023 as in the whole of last year.

And that’s not good…

Just as in the states, many craft brewers in the United Kingdom are struggling and closures are on the rise.

According to  accountants at Price Bailey, a record 35 breweries went bust in the first six months of 2023, almost the same number of closures as the whole of 2022 (38).

“The craft beer market was already oversaturated before the economic fallout from the pandemic tightened its grip,” Matt Howard, head of insolvency and recovery at Price Bailey told the Drinks Business. “Many breweries were walking a balance sheet tightrope and have been plunged into the red by a combination of soaring overheads and falling demand for premium brands.”

“Supermarkets are allocating less shelf space to premium brands as consumers rein in their spending. The shift towards cheaper global beer brands has left many craft beers with diminished market exposure.”

“Smaller independents generally have much higher exposure to market risks. “It is likely that insolvencies will continue to rise into 2024.”

The Society of Independent Brewers (SIBA, like the Brewers Association in the US, but with a British accent) Head of Communications, Ned Walker told the Drinks Business that he sees the escalating number of closures  as the end result of a perfect storm of post-pandemic factors…

The growth in brewery startups has slowed in recent years and we are now starting to see a significant number of business failures as the market becomes increasingly saturated and brewers face stronger economic headwinds”. Soaring inflation is leaving consumers with less money to spend on premium products.”

“Even in benign economic conditions small breweries can struggle to turn a profit for a few years Howard added.  But with higher borrowing and raw ingredient costs, coupled with weakening consumer demand, many startups are likely to fold before they get out of the red.”

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