British brewers will have to tackle a number of challenges after the Budget as tough new costs pile on the pressure, the British Beer and Pub Association warned.
Now, bottled beers face sharply rising costs in 2025 and the centuries old tradition of brewing beer “faces real and present dangers”. The BBPA is calling on Government to review new additional costs such as packaging and employment costs.
Brewers were making, on average, just two pence per bottle of pre–packed beer prior to the Chancellor’s Budget; this took into account duty, packaging, and retail costs.
The Budget’s announcement that a rise of 3.6% on non-draught beer will mean a painful £80m extra cost to the sector, the BBPA estimates.
There are also EPR (packaging) fees being introduced which would mean an extra £138m from April – this is equivalent to around an extra 4p per 330ml bottle, and 7p per 500ml bottle.
The British Beer and Pub Association warned this could wipe out the paper-thin profits brewers make per bottle, which are sold in both pubs and supermarkets.
Breweries pour billions into the UK economy and are world-renowned part of British manufacturing, despite the several significant challenges they face.
Latest figures from 2024 Oxford Economics research show GVA contributions by breweries amounted to £5.7 billion, and they supported 85,000 jobs up and down the country. This vastly underplays how brewers support the thousands of jobs the pub sector creates.
It could lead to businesses making tough decisions in order not to undermine growth and carrying on pouring billions into the UK economy.
Emma McClarkin, CEO of the BBPA, said: “The sector does face real and present dangers to growth and investment, and Government must confront the reality of the Budget’s consequences.
“While the draught beer cut was a welcome acknowledgement of the importance of our sector and the price of a pint, major challenges remain and next year will present a major challenge for the industry.
“The cumulative impact of the Budget for our industry, means, at a conservative estimate, a £500m increase to the cost of doing business for the industry. This is on top of up to £138m of additional packaging costs for beer in glass bottles putting pubs, brewers, investment and jobs at continued risk. They may have to make tough decisions, such as passing on extra costs to customers and indeed reviewing the viability some iconic beer brands.
“We urge the government to urgently consider how to phase in some of these eye-watering costs over a longer period, continue to review and reduce EPR fees to ensure they are fair and sustainable, so we can continue to play a critical role for the UK’s economy, employment, and culture.”
According to the BBPA’s brewery database, there were 1,885 breweries in the UK in 2023, a decline of 37 on the previous report in 2020 (1,922).
Although this represents a smaller relative decline than that for the pub sector, it still highlights how the challenging circumstances of the last few years have affected both pubs and breweries where beer still accounts for two third of alcoholic beverages sold.
