Seasonal changes

SIBA’s National Chairman Richard Naisby ponders some of the big changes coming up for independent brewers as he looks ahead to the summer season…

If the weather forecast is to be believed, today's may be the last frosty morning of the season. Trees are in leaf and this brewer's thoughts are turning to the summer schedule of sporting events, beer festivals and barbeques.

The winter of 2022/23 seems to have gone on for an inordinate length of time, and though the feared blackouts did not happen, the energy crisis was all too real for all of us in the beer business. The closure of so many pubs was always going to lead to a reduction in the number of brewers, though it is heartening to see that the rate of closure seems to have slowed since the dark days of December. Thankfully, we now have a reliable way of measuring our progress or decline. The launch of the SIBA UK Brewery Tracker generated many favourable comments and some surprising headlines. SIBA now has the most powerful tool for measuring the health of our industry. Since it is updated on a quarterly basis, it is both rigorous and timely. I hope we'll start to see the end of some of the sillier articles that have been a feature of the business commentary in recent years. It is only when the data is solid that we can expect sound decisions to be made.

The Holyrood parliament has announced a delay in the implementation of the Scottish Deposit Return Scheme, as well as some – very welcome – concessions that will favour the smallest producers. SIBA has been instrumental in obtaining this re-think and we'll continue to press for changes that recognise the enormous challenges faced by the independent brewing sector. The campaign is not over but SIBA can be very proud of the work done by the staff team and the Scottish directors (Jamie Delap deserves special mention for work above and beyond the call of duty).

While the Scottish parliament is delaying a harmful proposal, Westminster is busy enacting the legislation that will provide for a differential in draught beer duty. I was going to write ‘a cut’, but since the headline rate rose by a compensating amount this just amounts to a taxation hold for beer sold in pubs. It is, however, a significant moment – recognition of the unique social advantages that only supervised drinking can provide. In itself, this small change won't make a big enough difference to anyone. But as an indicator of the direction of travel, it is a huge step in the right direction. The supermarkets have had it their own way for far, far too long…

The big changes this year will come in August when the long-awaited alcohol duty reform goes live. I think we are all aware that this brings mixed blessings. SIBA has been holding detailed webinars for those who wish to familiarise themselves with the minutiae. As ever, the proof will be in the pudding, but I will be surprised if we don't see some megabrew beers reformulated so that they fall under the magic 3.4% duty barrier.

April saw the launch of an ill-advised t-shirt by Marks & Spencer featuring a fake ‘Craft Beer’ logo. While it is good that a major UK retailer sees the marketing benefits of associating themselves with our industry it is probably fair to say this was a failure on many fronts.

It did, however, highlight some of the legal and trademark advantages offered by SIBA membership – advantages that all members should be aware of.

The frost has melted, the sun is now out. I need to work out where my cricket whites were left at the end of last season. My hop audit tells me we are down on numbers for some of our expected summer beers and the outdoor taproom won't clean itself.

Welcome to the change of the seasons!

Cheers!

Richard Naisby Chairman SIBA

The total number of breweries in the UK has remained ‘relatively stable’ in the first quarter of 2023 according to figures released from the SIBA UK Brewery Tracker - which tracks new brewery openings and closures across the UK to give net numbers both regionally and Nationally.

Covering the period from the start of January 2023 to the end of March 2023, the SIBA UK Brewery Tracker shows some regions increasing their net brewery number, and overall the UK figure being down by just -4 on the start of 2023 – just a 0.22% change and a much better picture then many in the industry would have predicted given the mounting pressures on small independent breweries.

“It is very positive to see some areas of the UK now in growth and a National figure which has beaten the odds to remain relatively stable, despite the challenges faced by brewers. With rising raw material and utility costs, alongside existing market access issues, far too many small breweries are closing but the figures paint a much better picture than many predicted.

“Small breweries have a hugely positive impact on their local community, providing jobs, raising money for charity, supporting local initiatives, and providing access to the freshlybrewed local beers that are now in such demand across the UK. All small independent breweries deserve your support,” said Andy Slee, SIBA Chief Executive.

“It is clear that demand is there from drinkers for great quality beer from local breweries, but getting those beers onto bars and into the hands of consumers can be tough in a competitive market. It’s the reason why so many breweries are now opening community taprooms where they can serve brewery-fresh beer direct to local people,” Andy added.

The SIBA Craft Beer Report launched in March showed 40% of independent craft breweries now have a taproom (up 10% on 2022) and that on average 27% of an independent brewery’s income now comes from sales direct to consumers via their taprooms, brewery shop or webshop – a huge increase for an industry historically heavily reliant on pub sales.

According to the latest SIBA UK Brewery Tracker figures, Wales leads the UK in terms of brewery growth, with their net number rising by an impressive +5 overall, whilst just over the border the West of England saw the needle swing in the opposite direction, with figures falling by -4 overall. Surprisingly this was mirrored in the South East, an area which has seen a huge growth in breweries in recent years, who also registered -4 overall in the first three months of 2023.

South West and North East England each had a decline in their overall brewery numbers of -2, with Scotland seeing a smaller decline, now with -1 brewery less overall.

It was a more positive picture elsewhere though, with the East and Midlands regions each seeing a +2 growth. The North West of England and Northern Ireland have finished the first quarter of 2023 on the same number as they started it, with any closures counteracted by new openings.

SIBA UK BREWERY TRACKER Q1, 2023

Covering period 01/01/23 - 31/03/2023

UK: 1824 (-4)

Scotland: 145 (-1)

Northern Ireland: 29 (-)

North East: 263 (-2)

North West: 209 (-)

East: 180 (+2)

Midlands: 284 (+2)

West of England: 71 (-4)

Wales: 107 (+5)

South East: 331 (-4)

South West: 205 (-2)

The above shows the new total number and net change compared to 01.01.23

The SIBA UK Brewery Tracker can be found at www.siba.co.uk/ brewerytracker

SIBA responds to announcement of delay for Scottish Deposit Return Scheme (DRS)

"The announcement by the First Minster that the Scottish Deposit Return Scheme (DRS) will be delayed until March next year gives small breweries time to at least catch their breath and begin to prepare for its introduction.

“While we fully support the principle of DRS, we have highlighted for many months the extreme complexity of the scheme in Scotland which many small producers do not have the resources or finances to prepare for. Many small breweries have been anxious about the impact it will have on their businesses as they face the cost-of-living crisis, energy price increases and the lingering effects of the pandemic.

“Last year we called on the Scottish Government, in partnership with others, for them to do three things – reduce the costs to small businesses, amend the terms of the scheme so small producers weren't required to take on extra debt and to delay the start of the scheme in order to allow small producers time to implement the scheme successfully. It is welcome that they have listened to all three and under the new First Minister now delayed it. Now is the opportunity for the Scottish Government and Circularity Scotland to work in partnership with small businesses to come up with real solutions that work for everyone not just the largest businesses and we look forward to working with them to address the other barriers to a successful launch of the DRS,” said Jamie Delap, SIBA Scotland Director.