Still reeling from the aftershocks of a pandemic that locked down the hospitality industry for almost two years, and consumers with less money in their pockets, the UK craft beer biz is facing tough times.
The UK’s brewing industry is “in real crisis” a British Parliament member has warned and Labour MP Charlotte Nichols, who chairs the All Party Parliamentary Group on Pubs, and has asked for targeted help.
Just as in the US, the prices of raw brewing ingredients are soaring in England and craft brewer’s already slim profit margins becoming paper thin. As a result brewers are being forced to raise their beer prices just to survive, a move that is equally devastating to cash-strapped bars, pubs and restaurants.
On February 27 Rob Theakston managing director of the Black Sheep Brewery notified clients that the brewery was raising the price of its beers by 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.
In December MP Nichols raised the plight of small breweries in the House of Commons according to the BBC, explaining that “breweries were being hit by a number of issues, including the cost of grain – which often comes from Ukraine and the surrounding region – and the impact of the cost-of-living crisis on both their staff and their customers, and skyrocketing energy prices.”
“The sector is in a real crisis at the moment,” said Nichols, added. “They’re getting it not only from their manufacturing costs but also those struggles hospitality businesses are facing, as consumers have less money in their pockets.”