Small brewers hit by falling beer sales
SIBA said UK independent breweries were struggling to cope with falling beer sales due to the impact of COVID-19 and the restriction of pub opening hours.
The brewing sector has been heavily impacted by the coronavirus pandemic and the closure of pubs during lockdown.
SIBA said the fall in sales came just as the Government prepared to slash the Small Brewers Relief (SBR). That measure was introduced to account for small brewers’ high production costs and allow them to compete with global brewers.
The Government is yet to reveal how much SBR will rise. Amid the uncertainty, 58% of brewers responding to a survey of its members by SIBA said they were delaying investment. A total of 51% reported delaying employing new staff, and 49% claimed they were delaying growing their brewing capacity. Just 4% greeted the Government’s proposed tax changes positively.
Craft beer sales down
SIBA has revealed that even after pubs and restaurants started to reopen this summer, craft beer sales remained at just over half of what they would have expected for a ‘normal’ July.
“This new data shows very clearly that breweries are delaying investment and growth as they simply do not know what their tax bill will look like in the future,” said James Calder, SIBA chief executive.
“It is making a very difficult situation near impossible for small independent breweries across the UK - businesses which have been hit extremely hard by coronavirus.
“Breweries saw their sales slashed by more than 80% when pubs closed and even in July once things had reopened sales were at half of what we would have usually expected. The timing of announcing a tax rise for many small brewers could not be worse.”
Damage
Tory MP and former pubs minister Andrew Percy backed small brewers and said the proposed changes would seriously damage the industry.
“The growth of small and craft breweries across the UK in recent years has been something of a jobs and economic success story,” he said.
“As well as supporting new jobs in brewing directly, this growth has supported jobs and businesses right across the country be that farmers, local pubs or bottle shops.
“This has been in no small part thanks to support offered by the small brewers rate relief. This relief has led to a revolution in brewing whilst at the same time increasing choice for consumers and introducing consumers, especially younger consumers, to new styles of beer.”
This new research follows the launch of a petition to Government to back local beer. It has called on the Government to reverse its proposed tax rise that would affect up to 150 small breweries.
The petition has reached 40,000 signatures in a few weeks and now has the support of consumer group Campaign for Real Ale (CAMRA).
Tom Stainer, CAMRA chief executive, said: “We need the Government to rethink their plans for changes to SBR to make sure that our local and small brewers can overcome the challenges they have faced during the coronavirus crisis and can invest and grow in the future."
