The 43 breweries that have become insolvent include names like Fourpure, By The Horns, Magic Rock Brewery, Burton Town Brewery and Wild Weather Ales.
The accountancy firm highlighted that many of these are small, independent craft beer producers, who have been impacted by increases in national minimum wage, employer national insurance contributions along with inflation across ingredients, brewing equipment and energy bills.
Brian Johnson, partner at UHY Hacker Young, said that many these small brewers are now caught in a “perfect storm” of production costs soaring while household spending remains tight.
Recent closures
“The craft beer boom was one of the most exciting recent trends in food and drink. Unfortunately, it is a sector that attracted too many entrepreneurs who struggled to break even,” he said.
“The recent closures suggest the UK’s craft beer market cannot continue to support all the independent producers that have sprung up in the last 15 years.”
He added: “Weak consumer spending means many breweries will have to adapt to leaner times.”
Johnson explained that producers who are often reliant on local bars and direct sales are particularly vulnerable if their customer base cuts back on spending.
Trading down
He raised concern that many consumers could trade down to cheaper beer brands as they tighten household budgets making it harder for craft brewers to justify their typically higher price point.
Johnson added: “For smaller brewers who rely on loyal local followings, even a slight dip in demand can tip them over the edge. With so many brewers competing for attention, it’s increasingly hard to survive.”
He also highlighted that many small brewers are struggling to scale up. While bigger craft breweries can access supermarket shelves or national pub chains the smaller breweries cannot achieve the economies of scale needed to break even.
