The Campaign for Pubs has written to the Chancellor and the Secretary of State for Business, Energy and Industrial Strategy urging them to take action to stop the spate of small brewery closures. There have now been over 80 small independent brewery closures this year, with the current level of energy prices and the cost-of-living crisis seeing many brewers shut down with a loss to the UK’s brewing scene, as well as a loss of jobs and to local economies.
The threat from unaffordable energy bills is existential for many of the UK’s burgeoning small craft breweries, all of whom rely on significant energy usage. This is combined with other rising costs, including the price of malt and hops, and the cost-of-living crisis, which is reducing consumer spend. Urgent action is therefore needed from Government to stop the spate of closures and to sustain the wonderful range of beer brewed by excellent smaller brewers up and down the country.
The letter, from Campaign for Pubs Brewery Coordinator, Phil Saltonstall, Founder of Brass Castle Brewery and Vice-Chair Dawn Hopkins also criticises the lack of appropriately targeted Government support and the complete lack of dedicated assistance for brewers during the COVID-19 crisis, despite brewers plainly being part of the fabric of hospitality. Even now, potentially positive initiatives such as draught duty reform and a proposed Deposit Return Schemes are flawed and skewed against smaller brewers in favour of large multinational producers, who enjoy a very close relationship with Government. With more of the UK’s small breweries closing day-by-day, the UK Government must step in to protect to the UK’s craft beer sector, rather than continue to assist multinationals to achieve greater market share at the expense of our brewing heritage.
The Campaign for Pubs is calling for the following measures, to stop the spate of brewery closures and support small brewers during the current crisis:
- Extend business rates relief to small brewers
- Further and more meaningful action on energy bills for businesses
- Changes to Draught Duty Relief to allow pubs to sell takeaway cask/draught beer
- Changes to the Deposit Return Scheme to make it work for smaller brewers, as opposed to only working for big brewers.
Draught Duty Relief is in principle a welcome measure but is flawed because as currently proposed it would stop sales of takeaway cask and draught beer, which doesn’t make sense and is detrimental for both brewers and pubs. Cask beer is vital for pubs and pubs are vital to small brewers, so reform is needed to allow a sealable container option gives customers the opportunity to safely enjoy takeaway cask beer. Removing that option flies in the face of decades of policy and messaging about drink-driving.
The Campaign for Pubs is also calling for serious review of the Deposit Return Schemes (DRS) that come into force in Scotland shortly, before then coming into effect across the rest of the UK in 2024. The UK Government has dithered over this policy since it was announced by Michael Gove in 2018 and now – at this particularly challenging time – small breweries are beginning to discover what they will have to pay to be involved and by how much their product prices will have to increase. The scheme in its current configuration loads significant financial costs and bureaucracy onto smaller breweries, with no relief for size or economies of scale. Larger brewers are easily able to shoulder those additional costs, but small brewers faced with identical costs will invariably have to cease trading in small pack, like canned beers. DRS is in principle a welcome and long overdue measure, but larger companies have found an opportunity through the legislation (and the remarkable short-term derogation for glass bottles in England particularly) to undermine competition from smaller brewers, with Government assistance.
The range and diversity of the UK brewing scene is not only important for brewers and employees, it is also vital for pubs, to remain able to showcase a range of different and often local beers on the bar and for tourism as well as local economies. The Campaign for Pubs is also calling for support for pubs and wrote to the Chancellor in mid-November urging the Government to address the situation facing pubs
Phil Saltonstall, Brewer Coordinator of the Campaign for Pubs and a founder of Brass Castle Brewery said:
“The growth of small breweries in the UK has been a major success story, in spite of the ongoing monopoly dominance of a few huge breweries. The Government is now in serious danger of actively allowing this important growth industry to fade away.
“The Government has bowed to big brewery lobbyists and announced alcohol duty and deposit return measures that will disproportionately disadvantage smaller competitor breweries.
“Meanwhile, no sector-specific support has been provided to brewers at any point, meaning that after having struggled through the COVID crisis, we are now facing the economic pincer of huge increases in input prices across the board and a cost-of-living crisis which means that our consumers are having to cut back. Small businesses like ours need dedicated and ongoing help with rising energy prices and certainty over planned policy measures, to know what our costs will be in the medium term and to allow us to chart a course through the current storm.”
Dawn Hopkins, Vice Chair of the Campaign for Pubs and a licensee in Norwich said:
“Our small, independent breweries are in crisis, already over 80 have closed this year, many more are on the edge and the situation is getting worse.
“Our proud brewing industry is under threat from the ever-rising cost of utilities and ingredients, the loss of pubs and the cost-of-living crisis, and they need support and help right now.
“I urge the Government to stop turning a blind eye to this dire situation and to act now before we lose any more breweries. We urgently need a meaningful support package to get small brewers and pubs through this winter”.