UK brewing industry facing crisis over energy prices

Brewers along with pubcos have sent an urgent warning as energy prices continue to increase. 

Business leaders from across the brewing and pub industry have signed an open letter to the Government and leadership candidates warning businesses will close and jobs will be lost if immediate action isn’t taken on energy bills for businesses.  

The news follows calls from organisations representing the UK’s independent brewers and beer consumers​ that last week called for urgent action on energy and support for the sector.

Irreversible damage

Chief executives of regional and family brewing and pub businesses to international companies have now come together to raise alarm of the ‘real and serious irreversible’ damage the energy crisis will cause if the Government does not implement an urgent support package that effectively caps the price of energy for businesses.

It is an issue impacting the entirety of the industry’s supply chain, with major CO2 producer​, CF Industries announcing it will be ceasing production of what the bosses called a "critical component" in beer production and dispense in pubs. 

Representatives from brewers J.W Lees, Greene King, St Austell Brewery, and Carlsberg Marstons, were among those who raised the concerns. 

Paul Davies, chief executive officer, Carlsberg Marstons said: “The UK’s brewing industry is facing a crisis far graver than that which we faced during the Covid lockdowns of the past few years. We have seen surging commodity prices and a doubling in the cost of malt, as well as C02, gas and energy costs nearly tripling since 2019. ​

Iconic beer brands

“On top of all this, our industry has felt the impact of an over 50% rise in aluminium costs for cans, plus rising labour costs. Without immediate, direct Government support, many of the UK’s craft and cask ale breweries will have no choice but to close for good. We are going to lose in one winter, generations of iconic beer brands.”​

Emma McClarkin, chief executive, British Beer and Pub Association said: “This rise in energy costs will cause more damage to our industry than the pandemic did if nothing is done in the next few weeks, consumers will now be thinking even more carefully about where they spend their money.”​

Nick Mackenzie, chief executive of Greene King, said: “While the Government has introduced measures to help households cope with this spike in prices, businesses are having to face this alone, and it is only going to get worse come the autumn.”​

Kevin Georgel, chief executive, St Austell Brewery said: ​“Having survived the unprecedented challenges arising from the pandemic, pubs and breweries are once again faced with an existential threat because of circumstances beyond their control."​

Brewers are not the only manufacturing sector to call for help as Scottish Bakers, the membership organisation which supports the bakery trade throughout Scotland, has written to politicians to bring to their attention the plight the sector in Scotland is currently facing.

It has called for urgent action over rising prices highlighting electricity, gas, insurance, fuel and ingredients.