BrewDog Calls for Government Support as Hospitality Sector Faces £1bn Cost Crisis

BrewDog has issued an urgent appeal to the Treasury for enhanced support for Britain’s hospitality sector, cautioning that escalating operational costs are putting thousands of pubs and breweries at risk of closure.

The Aberdeenshire-based brewing company’s chief executive James Taylor has revealed that the UK’s pub and brewing industry has absorbed additional expenses exceeding £1 billion during the last year, with operators grappling with surging energy tariffs, wage increases, rising ingredient costs, and mounting tax obligations.

Taylor outlined the financial pressure facing businesses across the sector: “Energy and utilities expenses, staff wages, National Insurance payments, raw material costs, packaging expenses and compliance charges have all risen significantly within a 12-month period. Our analysis suggests these combined increases have imposed costs of over £1 billion across the entire industry.”

According to BrewDog’s calculations, pubs and breweries would need to sell approximately 950,000 additional pints every hour simply to offset these heightened expenses.

The company has recently implemented redundancies, closed several UK bar locations, and divested its Lost Forest estate located near Aviemore as part of a strategic restructuring programme.

Taylor defended the difficult choices: “These decisions were challenging but necessary. They enable us to concentrate on our core strengths – producing exceptional beer, operating outstanding bars and serving our customer base and shareholder community.”

The brewer emphasised that the upcoming autumn Budget represents a pivotal moment for Britain’s brewing and hospitality sectors.

“April’s tax increases, particularly the duty rise on packaged beer and the reduction in business rates relief available to licensed premises, have intensified an already challenging commercial landscape,” Taylor explained.

“Continental neighbours have acknowledged the severity of these challenges – Germany and Ireland have either implemented or proposed VAT reductions for hospitality businesses. Ireland will cut its hospitality VAT rate from 13.5% to 9% starting July 2026 to safeguard employment and encourage sector recovery.

“Westminster should adopt a similar approach,” he urged.

BrewDog is pressing the Government to introduce substantive measures supporting the sector, including business rates reform, beer duty relief, and a comprehensive assessment of the accumulated cost pressures threatening the survival of thousands of UK pubs and breweries.

The company has additionally recommended that ministers consider implementing temporary VAT reductions for hospitality businesses to protect jobs and maintain the vitality of local economies.