BrewDog CEO James Taylor said the fourth quarter of 2025 will be crucial to the company after it was forced to axe jobs this week.
The Ellon-based business that has sites across the UK and worldwide and was the self-proclaimed ‘craft punk pioneers’ said the enforced extra costs to the sector have been driven by soaring energy bills, rising labour costs, escalating ingredient and packaging prices, and a raft of new taxes and regulatory charges.
It added the scale of the cost shock has forced many businesses, BrewDog included, to take difficult decisions to protect their long-term future.
Taylor said: “In the past year alone, energy and utilities, wages, national insurance contributions, raw materials, packaging and regulatory costs have all moved in the wrong direction.
“We estimate that, taken together, these cost increases have added more than £1bn to the sector’s collective bill.”
Almost 1m pints extra per hour must be sold
BrewDog claims that to recoup these costs, the sector would have to sell an extra 950,000 pints every hour.
BrewDog recently announced a series of strategic measures to strengthen its business and prepare for the next phase of growth. These include targeted headcount reductions, UK bar closures and the sale of the Lost Forest estate in the Scottish Highlands.
“These were not easy decisions but they were the right ones,” Taylor continued. “They allow us to focus on what we do best – brewing great beer, running brilliant bars and delivering for our community of customers and shareholders.
“Having returned to profitability in 2024, we are now setting the business up for a period of stability and sustainable growth.”
However, the company warned that the forthcoming Autumn Budget represents a critical moment for the future of Britain’s brewing and hospitality industries.
“The tax rises that came into effect in April, notably the increase in duty on non-draught beer and the scaling back of business rates relief for pubs, have made a tough trading environment even tougher,” said Taylor.
Staffing costs significantly raised
BrewDog added the biggest impact for hospitality has come from increases to the national living wage and employer national insurance contributions, which together have significantly raised staffing costs across the sector.
“Other markets have already recognised the scale of the challenge,” said Taylor. “Both Germany and Ireland have announced or proposed VAT reductions for hospitality – with Ireland cutting VAT from 13.5% to 9% from July 2026 to help protect jobs and support recovery. The UK Government should follow their lead.”
BrewDog also highlighted sharp inflationary pressures across key inputs such as poultry and other food ingredients, which have further increased operating costs for pubs and bars. “If the Chancellor chooses to clobber the sector again in this Budget, many independent brewers and pub operators will simply not be able to withstand the pressure,” said Taylor.
“Britain’s brewing heritage is something to be proud of. With the right policy environment, this sector can be a powerhouse for jobs, growth and creativity.”
BrewDog is calling on the Government to take action to support the sector – including reforms to business rates, relief on beer duty and a review of the cumulative cost burden that is threatening the viability of thousands of UK pubs and breweries.
The company is also urging the Government to consider temporary VAT relief for hospitality to protect jobs and sustain local economies.
British Beer & Pub Association CEO Emma McClarkin is backing BrewDog. She said: “This analysis from BrewDog reinforces the cumulative impact of the huge barrage of costs the industry has had to cope with and the difficult choices businesses are having to make.
“We urge the Chancellor to act in the Budget to recognise the importance of the beer and pub sector to our economy and community by detailing meaningful business rates reform, cutting beer duty and reviewing punishing employment and packaging costs so we can thrive at the heart of high streets, towns and villages across the UK.”
