Could UK’s craft beer boom be coming to a rather abrupt end because of Brexit? The impact of Brexit on UK craft beer can be seen in the last 18 months, over 100 small brewers have shut up shop and 45 of them closing in June alone, according to the accountancy firm Mazars. There has been a decline in craft beer popularity with Britain’s burgeoning craft beer scene has been dealt a hammer blow by the decision to leave the European Union, with hundreds of microbreweries going to the wall in the past 18 months. It seems the craft beer industry future is in doldrums.
Small brewers of Craft beer after UK Brexit are the most affected. As stated 45 small brewers had gone into liquidation, but many more have either been sold or swallowed by rivals.
The impact of UK Brexit on craft beer:
A survey by the Brewers’ Association found that 60% of UK craft brewers believe that Brexit has had a negative impact on their business. The impact of Brexit on UK craft beer has been devastating to say the least. There are many factor that has led to a decline in craft beer popularity.
Increased costs for importing and exporting beer
Increased cost is also an impact of Brexit on UK craft beer. Also changes in new rules on beer duty could potentially be the death of craft beer. Beer, wine and spirits used to have different levels of tax but from Aug. 1 have been taxed according to alcohol content. That means a 10.1% rise on bottles and cans of beer, and stronger craft beers are hit harder.
Increased bureaucracy and paperwork
Post UK Brexit exit the businesses are grappling with expensive and time-consuming paperwork, the very same red-tape bureaucracy that Brexiteers promised leaving the bloc would put a stop to.
Changes to the rules on labeling and packaging
There has also been changes to the rules and regulation for labeling and packaging to add to craft beer market challenges.
Loss of access to the European single market
“It just got too much Brexit,” Karjalainen of Bone Machine Brewing Co said. “We were heavily geared for export. We’d be selling to Finland, Sweden, Norway, Ireland, Netherlands, Italy, and Spain. We had Hungary in the pipeline. And it all disappeared with Brexit.”
The impact of Brexit on UK craft beer individual breweries:
Small breweries have been caught in a perfect storm. The first blow was UK Brexit, the pandemic only made matters worse and now the cost of living crisis has put a final nail in the coffin for many.
Kimi Karjalainen and his brother Marko poured their life savings into Bone Machine Brewing Co when it opened. “The entire investment, not including time and labor that we gave for free, was about £70,000,” Karjalainen said. After Brexit it was gone.
Bone Machine is one of more than 100 small brewers that have been forced out of business in the past 18 months.
The future of the UK craft beer industry
One of the craft beer market challenges is consumers generally, willing to spend less at the moment.
The potential for the industry to grow and thrive in the long term
So, does this mean it is death of craft beer? Well, even though customers have less money in their pockets, they haven’t lost the taste for craft beers. Though the impact of Brexit on UK craft beer larger firms is less and they still doing well. According to The Grocer, Brewdog, the Camden Town Brewery and Beavertown all saw supermarket sales rise more than a quarter.
The challenges that the industry will face in the coming years
Craft beer industry future also is affected by obstacles the industry has had to tackle. In the early stages of the energy crisis, brewers were hit by an unexpected shortage of carbon dioxide and a vast surge in the cost of barley and hops following Russia’s large-scale invasion of Ukraine.
More breweries are shutting down this year than previous eight year of business. Staffing is still hard. Electricity is still pretty expensive.
According to Yvan Seth, founder of Jolly Good Beer, Seth, everyone though it was cool to drink craft beer till the next big thing and led to decline in craft beer popularity.
Trouble brewing
Impact of Brexit on UK craft beer can be seen as below.
- 366,300 liters: Average production of beer by members of the Society of Independent Brewers (Siba), 11% below 2019 levels.
- 684: Independent brewers in the UK, out of a total of 1,828, as of the start of this year.
- 63%: SIBA members who say their focus this year is on survival.
The decline of the UK craft beer industry is a major setback for the industry. However, there are still many reasons to be optimistic about the future of craft beer in the UK. The UK has a long and rich history of brewing, and there is a strong community of craft brewers who are passionate about their craft.
