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Brewery Insolvencies Rise as Operational Costs Increase

Soaring operational costs and a greater competition between brands have seen the number of UK breweries becoming insolvent more than triple in the past year, with smaller brewers worst affected, according to data released by tax and audit firm Mazars.

Using Insolvency Service data, the company said the number of insolvencies rose to 45 in the year to March 31, 2023, up from 15 in the previous year. Paul Maloney, associate director at Mazars, said the insolvencies are largely of smaller craft breweries who have “suffered from an oversaturated market and from rising overheads”.

Mr Maloney said: “Craft breweries have been struggling for some time, but rising prices have brought their financial challenges to a head. Craft brewers often offer ‘premium’ beers, but consumers are turning to cheaper alternatives. As such, discount brands produced by large international brewers and supermarkets’ own brands are increasingly becoming a choice for consumers.

“The craft beer market has grown enormously over the past decade. The cost of living crisis means that many of these brewers are struggling to carve out a niche in a shrinking market. Some of them will not make it.

Smaller breweries also often suffer from limited routes to market, lack proper distribution channels to consumers, and are dependent on taprooms and supplies to local bottle shops. Those restrictions limited the turnover of many craft breweries, meaning they were unable to break even.