Brewers fear Brexit beer price hike

By Nikkie Sutton

- Last updated on GMT

Worry: brewers are alarmed over rising costs of materials
Worry: brewers are alarmed over rising costs of materials

Related tags: Brewing

Panic has spread among Britain’s brewers who fear Brexit will lead to a sharp rise in the cost of raw materials and impact the price of a pint, The Morning Advertiser (MA) has learnt.

Industry organisations are already armed to tell beer drinkers that brewers could be placed under financial stress when the UK divorces from the European Union, and have alluded to a potential rise in the cost of beer.

Society of Independent Brewers (SIBA)​ managing director Mike Benner said: “Also the fundamental truth is that craft beers rely heavily on quality, often imported ingredients such as American, New Zealand or Australian hops and different types of specialty malts.

“Independent brewers use these quality ingredients purely for their flavour, which means consumers are getting very good value for money when they choose an independent craft beer.”

However, despite the negatives, the weaker pound could be viewed as a silver lining in the interim.

He added: “While rising raw material costs are clearly a big issue for Britain’s independent craft brewers there are some positives effects of a weaker pound, including a surge in tourism to the UK.

“British beer is famous around the world and as well as tourists seeking out quality British craft beers to try when visiting, I believe there will also be opportunities for more and more British brewers to export their beer in coming years as the thirst for our quality beers continues."

Hop Stuff Brewery owner James Yeomans was also optimistic about a drop in currency, which he said could provide opportunities.

Golden opportunity for brewers

He told The MA​: “The falling pound presents brewers with a golden opportunity to look at exporting beer. Demand for UK craft beer is at a record high, we’re getting approached regularly to start sending beer”

“Although Brexit adds risk, it isn’t going to happen overnight, and while Brexit rumbles on, the market remains open and relatively easy to access.”

“The world is a big place, and there is demand for UK craft beer coming from all corners. If people want your beer and you want to sell it, you can normally find a way to make it work.”

Dark Star Brewing Co​ director James Cuthbertson said there was no doubt Brexit had already harmed UK brewers in terms of the cost of ingredients.

He said: “We’ve seen our average hop price for delivery in 2017 rise by some 9% against 2016.

“But it’s fair to say that we shouldn’t put the blame squarely on Brexit alone, the craft beer market is booming and demand for hops is soaring and with that the price, particularly those like Cascade which we import from the US.

“In comparison, 98% of our Malt is sourced from UK and prices are stable.

“At Dark Star, we’ve swallowed the last two significant ingredient rises, but there comes a time when you have to pass these costs on, in part if not in full.”

Can’t start cutting corners to find savings

He added: “We have our own estate of pubs, so we understand the pressure at the pumps from the consumer, our jobs needs to be to explain why the beer is more expensive to the consumer – if it was fuel we were talking about, you’d be sure to have heard all about it.”

“What we can’t do as brewers is start cutting corners to find savings, the beer will suffer, the consumer will notice, the reputation of craft beer in the market will be adversely affected and we’ll have a real problem.

“What we need to do is ensure that from brewer through to consumer, we keep beer as a premium product, one that people are prepared to pay for, despite any price increases.”

North Bar Brewing Co​ director Christian Townsley said the vote to leave the European Union had already resulted in price rises.

He added: “Brexit has led to price increases on European resources such as doliums [one-way kegs vital to the distribution of our beer].

“There's also uncertainty about how exporting will work in the future. We've no idea what the impact is going to be on the customs paperwork and process, the information required on our packaging, the price importers will pay for our beer, 'tariffs', etc.

“So many factors are unknown! It's happening, and I'm absolutely gutted, but for now we just have to crack on with business and see how it unfolds, adjusting elements of our business as and when in order to keep our growth strategy on course.”

Related topics: Beer

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