In a joint letter addressed to current Chancellor Nadhim Zahawi, the Campaign for Real Ale (CAMRA) and Society of Independent Brewers (SIBA) have warned of the “grave uncertainty” the UK’s brewing industry faces due to spiking energy bills.
The letter, signed by SIBA chairman Roy Allkin and CAMRA chairman Nik Antona, cites dramatically increasing energy bills, supply chain issues, reduced hop harvests and CO2 shortages as some of the factors that have pushed the industry into one of its “most challenging times”.
As a “first step”, the industry bodies call for an energy cap, similar to that for consumers: “Many breweries want to introduce measures to reduce their energy use by installing green technology, and would greatly benefit from tailored Government policies on renewable energy generation and storage, electrolysis and small-scale CO2 recovery systems…many of the Government funds available – such as the Industrial Energy Transformation Fund – are only aimed at large businesses.”
Although the letter mentions that the UK’s distilleries benefited from “£11 million to help them go green”, it must be noted that the Scotch whisky industry is also being severely affected by these rising costs, despite that grant.
Some brewers have taken to social media to share horror stories of upcoming bills. Darren Anley, of Siren Craft Brew in Berkshire, said: “Our bill for the warehouse and tap room has gone from £20,000 to over £85,000. Current forecasts for variable rates will see that going to £105,000 next year. I don’t want to even think about the brewery costs, which already start 5x higher.”
Pubs are also facing rises in bills which could prove to be critical both for them and the brewers dependent on on-trade sales. Ye Olde Fleece Inn in Kendal shared on Twitter that its energy bill for next year is calculated at £124,000, an £80,000 increase on this year. Earlier this week, The Guardian reported that more than 70% of UK pubs might not survive this coming winter.
Yesterday, the publication also revealed that several major energy firms were now refusing to supply small businesses altogether, or not without a £10,000 deposit, due to concerns about not receiving payment.
Another worry for the sector is reduced consumer spending power due to rising household bills. A recent YouGov survey (commissioned by CAMRA) found that 52% of Brits believe the price of a pint to already be unaffordable.
In addition to the forecast energy emergency, the letter also cited uncertainty surrounding the Alcohol Duty Review, which was delayed in July, as a cause for concern: “Many brewers have already factored these duty changes into their planning for next year, but do not know if they will happen on time. When the Draught Duty Rate is introduced we’d encourage you to expand from the proposed 5% discount to 20% to provide a boost for the brewing and hospitality sector and include 20 and 30 litre containers used by small brewers in the scheme.”
However, Zahawi is unlikely to be in a position to resolve these crises for much longer, with a new Government (and Chancellor) coming in with the conclusion of the Conservative leadership contest next month. Thinking ahead, the British Beer and Pub Association wrote to Liz Truss and Rishi Sunak, asking them to pledge support for the sector, especially in light of soaring energy bills.