The UK’s brewing industry and pub sector supports 900,000 jobs in the UK, and contributes more than £20 billion to the UK economy. But like most businesses at the moment, independent breweries are struggling with huge sales dips. And at the same time, they still have to pay beer duty – the single biggest cost that breweries face.
It is true that they have one advantage that pubs do not – they can sell beers online or through retail.
Indeed, local and internet sales of craft beers are up 91 percent since pre-lockdown, according to as survey by SIBA – the independent brewers union.
But this is not nearly enough to cover the overall loss of sales – down between 60 and 80 percent – due to the closure of pubs.
And while the government’s support schemes may be stretching far enough to cover the big brewing conglomerates and pubs, it’s not necessarily the case for independent breweries.
According to a union body, beer duties are the biggest cost of independent breweries.
In fact, 80 percent reckon the government is not doing enough to support them according to the same SIBA survey.
Ultimately, SIBA says that despite the government’s ‘flexible furlough’ arrangements, there could still be hundreds of job losses at independent breweries across the UK.
James Calder, Chief Executive of the body, said in a press release that “irreparable damage has already been done” to many small brewers.
Calder told Express.co.uk: “Since the beginning of the lockdown we have worked flat out with Ministers, Government departments and MPs on the challenges my members face.
In lieu of pubs being open, breweries have had to rely on retail sales and delivery for income.
“The big ones have been beer duty – which is the single biggest cost to a brewery. Originally we called on the Government to suspend payments entirely, but instead the Government introduced ‘time to pay’.
“Brewers have not received anything like the level of support pubs have. This shouldn’t be a ‘them vs. us’ as we’re all in business together, but – the fact remains most pubs have received £25,000k retail, hospitality and leisure grants and 100% business rate relief. Most brewers have not received this.
“Can and bottle sales have grown a lot, but sales have dropped 82% in total, because the majority of beer small brewers make and sell goes to pubs. The uptick in can and bottle sales has no-where near covered the drop in pub sales.”
In a show of support, 14 MPs last week sent a letter to Chancellor Rishi Sunak requesting more government support for independent breweries across the country.
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Breweries say they aren’t getting the same level of support as pubs.
It reads: “Sadly, the Covid-19 crisis represents an unprecedented threat to our small independent breweries, the craft beer industry and the local jobs they support. With the closure of pubs, bars and restaurants in March, small breweries lost 80% of their business overnight.”
“While it is welcome that the Government has allowed those breweries with the correct licences to remain open for takeaways and deliveries (if they wish to do so) these small scale sales are no match for the loss of revenue from the closure of pubs as most small breweries have very limited access to supermarkets.”
“The Government has rightly introduced a significant package of financial measures for the hospitality, leisure and retail sectors including business rate relief and grant support.
MPs have written to the Chancellor to discuss the issues faced by independent breweries.
“Unfortunately, this same level of support that pubs have received has not been extended to small breweries as primary supply manufacturers, who have not been eligible for business rate holidays or the £25,000 grant.
“Despite breweries experiencing a sudden collapse in sales and not receiving direct financial assistance, they have continued to be liable for HMRC beer duty payments and other business costs.”
The MPs requested, among other things, that beer duties for independent breweries should be halved for the rest of the financial year.
It remains to be seen whether this will be the case.
Published at Mon, 15 Jun 2020 05:41:00 +0000