Brexit 'could benefit UK craft brewers'

Craft brewers could see opportunities arise as foreign drinks importers face challenges due to the marked devaluation of the pound and anticipated issues around importing and exporting surrounding Brexit, according to Dutch banking group Rabobank. 

A new report by the bank said: “In the craft segment, British brewers could see domestic competition ease as foreign competitors are affected by weakness in the British pound and the long-term threat of trade barriers.”

Currency benefits​

The report continued: “In exports, British craft brewers would also benefit from the British pound’s weakness, but here, import tariffs would be a negative.”

Despite the importation costs for raw packaging materials to the UK, there was great value provided in UK sourcing already, such as barley and malt, according to the report.

‘Megabrew’ deals​

Brexit – and the devaluation of the pound – could also have an impact on ‘megabrew’ deals such as AB Inbev’s high-profile acquisition of SABMiller, Rabobank said.

“The value of SAB in British pounds will have gone up because a large part of the company’s earnings are in foreign currencies.

“AB Inbev could have benefited from the currency movement, but has hedged part of the purchase price.”

For SABMiller’s sellers, the pound’s depreciation was bad news because they could have hoped for a higher price today, it added.

How do you expect Brexit to affect your business? Get in touch by emailing daniel.woolfson@wrbm.com.​