The number of UK breweries going into insolvency over the last year has jumped 82 per cent from the previous year, as smaller craft breweries were hit the hardest.
According to data by accounting firm Mazars, last year (ending December 31), 69 UK breweries went insolvent, up from 38 a record for 2022.
Those that went into administration in the past year included Greenwich-based Brew by Numbers, Peckham Rye-based Brick Brewery and Bethnal Green-based Boxcar Brewery. Others across England include North Yorkshire’s Black Sheep and Liverpool’s Love Lane Brewery.
Mazars stated that a large portion of those that went into insolvency are smaller craft breweries, which have suffered from an oversaturated market, high interest rates and soaring inflation.
The firm stated that the craft beer market has become increasingly crowded throughout the last decade. It was revealed that a total of 430 new craft breweries opened up in 2017, in addition to the record 520 that opened up in 2016 to brew this popular beer.
However, now, all of these craft brewers are competing for a place in a shrinking market as consumers cut costs. On top of that, many craft breweries have been unable to expand past local markets, which has restricted their profitability.
Mazars stated that the rise in interest rates has made it more expensive to lease brewing equipment and inflation has pushed up many of the biggest costs to brewers such as electricity prices, hops and wage bills.
And as the cost of living crisis rages on, some consumers have turned away from the premium beers produced by smaller craft breweries in an attempt to curb spending.
Paul Maloney, associate director at Mazars stated that “despite the popularity of craft beer and ‘hipster’ independent breweries, the cost-of-living crisis is continuing to take its toll on brewers.”
“With a lot of consumers tightening their belts, cutting costs by buying a mass-market brand lager instead of a craft beer is a relatively easy thing to do,” he added.