Number of brewery insolvencies triples in past year, says Mazars
Examples of breweries that entered administration in the past year include Tyne Bank Brewery, which was funded through a crowdfunding campaign in 2015/16
The number of UK breweries becoming insolvent has tripled in the past year, jumping to 45 in the year to March 31 2023, up from 15 in the previous year, says Mazars.
This news comes as insolvencies have largely been felt among smaller craft breweries who have suffered from an oversaturated market and from rising overhead costs.
According to the firm, even without the cost-of-living crisis, there would have been a “major shakeout” in the market, as the boom in craft brewery start-ups meant that there were too many breweries competing for limited shelf space in supermarkets and bar space within pubs.
In addition, small breweries often suffer from limited routes to market, lacking proper distribution channels to consumers.
These smaller companies often do most of their business within local communities, relying on taprooms and supplying to local ‘bottle shops’. That has limited the turnover of many craft breweries, meaning that many were not able to reach breakeven.
Examples of breweries that entered administration in the past year include Tyne Bank Brewery, which was funded through a crowdfunding campaign in 2015/16 and had contracts with Morrisons and the Co-op.
London-based Boxcar Brewery also called in administrators due to an “unworkable situation” with landlords and debt issues.
Paul Maloney, associate director at Mazars, 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 options. As such, discounted brands produced by large international brewers and supermarket own brands are increasingly the choice for consumers.”
He added: “The craft beer market became heavily overpopulated over the last decade. The cost-of-living crisis now means many of these brewers are fighting for a place in a shrinking market. Some of them will not make it.”