Beer sales fall ‘off a cliff’ in the UK

Small brewers will be hit “much harder” than any other business by the UK’s coronavirus lockdown, according to a new report which shows well over three quarters of this month’s beer sales have fallen “off a cliff”.

Beer sales are down by 82% since the outbreak of Covid-19, with many businesses struggling to survive, according to a survey carried out by the Society of Independent Brewers (SIBA).

SIBA represents roughly 800 independently-run breweries which produce small quantities (around 5,000 hectolitres) per year, although some members produce up to 200,000HL annually and make up 1% of the UK’s overall beer market.

Of the 282 breweries surveyed, more than half (54%) said they haven’t been able to access government support. Two thirds (65%) have stopped brewing altogether, while just under a third (29%) of brewery owners said they could make redundancies this year to stay in business.

The news comes days after it was estimated that some 50 million pints of beer already sitting in kegs in UK pubs will go to waste this year.

Unlike large brewing businesses such as AB InBev and Heineken, who the capacity to supply supermarkets with larger volumes, small independent breweries sell the majority of their beer through pubs, bars and restaurants, meaning the lockdown measures “have hit them much harder,” James Calder, SIBA’s chief executive, said.

While on-trade institutions are suffering, online retailers and the off-trade are performing well. Kantar data showed that sales of alcohol rose 22% in March 2020, slightly ahead of average grocery sales growth for the month (20.6%).

That said, large breweries are also feeling the strain. AB InBev halved its final dividend for 2019 earlier this week, and has drawn down its entire US$9 billion loan facility in order to compensate for anticipated losses this year as pubs and bars have been forced to close around the world.

“Pubs, bars and restaurants have been receiving help from the government,” Calder said, “but none of the same schemes apply to our small breweries who saw their sales fall off a cliff almost overnight. They urgently need a package of measures to keep them going otherwise many won’t be able to reopen.”

CAMRA chief executive Tom Stainer said the lockdown is “devastating” the UK’s small brewing industry now that their primary route to market is “all but blocked”.

“We need to ensure that brewers have the same access to business rate reliefs, loans and grants that is currently available for pubs. We’d also like to see beer duty payments deferred and licensing laws relaxed so that brewers and pubs that only have on sale licenses can sell to the off trade during the crisis.”