Craft Brewery Closings Escalate In UK

, Craft Brewery Closings Escalate In UK

A perfect storm of circumstances has led to an escalating number of craft breweries in the United Kingdom “going into administration,” a legal step that company’s employ to possibly stay the process of closure.

When a company enters administration the control of the company is passed to the appointed administrator (who must be a licensed insolvency practitioner). The administrator’s primary goal is to leverage the company’s assets to repay creditors as quickly and as fully as possible without preference.

, Craft Brewery Closings Escalate In UKSometimes the companies are able to restructure and survive but more times than not “going into administration” in the UK is a death knell that speaks to the brewery’s pending closure.

And in late April and early May two London craft breweries Brew By Numbers and Brick Brewery filed “notices of intent to appoint administrators” according to trade website just-drinks, a precursor to “going into administration.”

The lingering impact of the pandemic and the worst inflation in 40 years, which is making the cost of doing business more and more difficult, has led to an alarming increase in craft brewery closures in the UK.

A grueling 36 breweries have closed in the United Kingdom this year, equal to approximately two per week, according to Steve Dunkley, head brewer at Beer Nouveau based in Manchester, England who has created a comprehensive list of British breweries closures in 2023.

On January 20th the UK’s award-winning  Bad Seed Brewery announced its closure via twitter citing the economic impact of the Covid  pandemic, cost-of-living crisis, and “societal and market changes”, as the reasons behind the closure…

“The beer world is very different to when we started in 2013. It has been thrilling to be part of the journey – and hopefully in our own small way, part of the change. But all journeys must come to an end.

BrewDog co-founder & CEO James Watt told the Independent that a pint of his Punk IPA would cost £27.50 (almost $34 US) if his beer prices matched the rising costs that businesses were currently absorbing.

, Craft Brewery Closings Escalate In UKOn February 27  Rob Theakston managing director of the Black Sheep Brewery notified clients that the brewery was raising the price of its beers pre-tax 19.5%.

This from that letter…

“Over the last year, we have seen significant increases which have impacted on our production costs despite working tirelessly with our suppliers to minimize their effect. These increases have come from a number of sources including increased utility charges and raw material costs. These cost pressure leave us in the position of having to implement a price increase.

 “We will be raising our published wholesale selling prices for all deliveries made on or after Monday 27th February 2023. The increase will be +19.5% excluding duty.”

About 80 UK breweries closed in 2022, and analysts fear more than triple that number could close this year.

So fasten your seatbelts beer-lovers because 2023 is already shaping up to be a rocky year for craft brewers in both the US and the UK.

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