Forty-three UK breweries have become insolvent in the last year, according to national accountancy group UHY Hacker Young. Many were small, independent craft beer producers facing mounting cost pressures.
“The craft beer boom was one of the most exciting recent trends in food and drink,” said Brian Johnson, partner at UHY Hacker Young. “Unfortunately, it is a sector that attracted too many entrepreneurs who struggled to break even.
“The recent closures suggest the UK’s craft beer market cannot continue to support all the independent producers that have sprung up in the last 15 years. Weak consumer spending means many breweries will have to adapt to leaner times.”
He said producers who are often reliant on local bars and direct sales are particularly vulnerable if their customer base cuts back on spending. There is a concern that many consumers will trade down to cheaper beer brands as they tighten household budgets. This trend is making it harder for craft brewers to justify their typically higher price point.
“For smaller brewers who rely on loyal local followings, even a slight dip in demand can tip them over the edge. With so many brewers competing for attention, it’s increasingly hard to survive.”
He adds that many small brewers are struggling to scale up. Only the bigger craft breweries can access supermarket shelves or national pub chains, meaning that many breweries cannot achieve the economies of scale needed to break even.
