UK: Number of breweries breaks 2,000 barrier for the first time since the 1930s

There are now over 2,000 breweries in the UK for the first time since the 1930s, according to new research by UHY Hacker Young, BQ Live reported on October 23.

UHY Hacker Young adds that the number of breweries in the UK has jumped 18% in just one year from 1,692 in 2015 to 1,994 at the end of 2016. The number has risen by 64% over the last five years, from 1,218 in 2012.

The UK has been going through a craft beer revolution with sales of higher margin artisan style beers soaring both in pubs and in supermarkets.

The success of the pioneering craft breweries has attracted more entrepreneurs, some of whom honed their skills with homebrew kits, to raise money and open their own micro-breweries.

UHY Hacker Young says that micro-breweries have also benefited from a tax break, introduced in 2002, allowing breweries producing less than 5,000 hectolitres, to pay 50% less beer duty than their larger counterparts.

The leading accountancy firm also explained that a number of high profile M&A deals in the sector continues to attract investors into the sector to help fund microbreweries.

In addition, other private equity funds are increasingly looking to capitalise on the growing success of breweries. For example, L Catterton, a PE fund backed by LVMH, recently invested in the Scottish craft brewer Innis & Gunn.

UHY Hacker Young says that, as more craft brewers are acquired by the majors, decisions will have to be made whether the small craft brewer’s production site is closed.

James Simmonds, Partner at UHY Hacker Young, said: “The craft beer boom has reversed around 70 years of consolidation in the brewing industry. There is plenty of growth still to come.

"However, the majors are beginning to make a fightback by acquiring craft brewers and launching their own artisan style brands like Hop House 13 Lager.

“The craft brewers can’t afford to rest on their laurels they will need to work hard to get their product into that limited shelf space and bar space.”

Simon Mydlowski, a leisure and hospitality solicitor at Yorkshire law firm Gordons, said: “The number of pubs closing in recent years has created greater competition for space among the growing UK brewery sector, however many are facing this challenge by opening their own premises or tap rooms.

“New innovative ales and further concepts such as matching beer with street food are bucking the trend. More and more people are making a lifestyle choice to focus on experiencing new beers rather than concentrating on main stream brands which were the staple of the large pub network.”

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