Saturday, 18 January 2014

"It did not make sense for us to carry on": Reasons for UK brewery closures, 2010-2013

One of the most difficult challenges in my work to understand the modern brewing industry is to determine how profitable breweries are and the factors that influence their success or failure. After all, your average brewer is highly unlikely to let me look at their accounts book. So last week I decided that one way to undertake this task was to look why breweries have shut their doors and ceased brewing in recent years. After all, if a lot of them are closing for financial reasons, this may indicate that times are tough for the industry, despite media reports that wax lyrical about the plethora of breweries opening and the vast bounties of beer available to drinkers.

Determining the causes of brewery closures was not easy; in fact in a lot of cases I simply did not find any explanation, despite spending hours on the internet searching. Given time constraints, I was only able investigate closure reasons for fifty-three of the seventy-nine breweries that the Quaffale website listed as having ceased trading between 2011 and 2013 (plus one other known case). I only found the information I needed for twenty-nine of them. Okay, this is not a huge sample, but it is all I have for now (work continues). My results are shown in the table below, from which some tentative conclusions can be made.


It is clear that a significant proportion of the breweries sampled have closed for non-financial reasons. Five ended their operations for what I have termed ‘personal’ reasons. For example, Angus Ales in Carnoustie – which produced a range of golf-themed beers – closed in December 2012 because the owner was in an accident, after which he felt he sadly could not go on.

There are also a twelve breweries, 41.38 per cent of the sample, which closed because of changes in business structures (this is, however, a very loose category). The story Jolly Brewer microbrewery in Wrexham is one example. Its owner, Pene Coles, had started selling her own bottle conditioned beers from her shop – which by no coincidence sold home brewing supplies – in 2000. But around a decade later she was convinced by Sarah Atherton and Keith Porter to join them in running the fledgling Sandstone Brewery. There is however one major issue regarding the breweries that ceased trading because of alterations to business structures. Seven breweries were sold as going concerns or taken-over, but I have found no information on why their original owners put them up for sale in the first place, which raises further questions. For example, were unprofitable breweries sold to new owners who hoped - however misguided that hope might be – that they could be turned around? Anglo-Dutch Brewery, which was started by Mike Field and Paul Klos in 2000, was sold in 2011. Under the stewardship of Richard Sharpe and Paul Horne it has now become the Partners Brewery Ltd. Why Field and Klos gave up brewing is a mystery? It could be for financial reasons, but naturally many other explanations are possible.

Only four breweries have closed because of property issues. The Botanist brewpub, which operated between 2011 and 2013 in Kew, London, was taken over by another company who promptly shut the brewing operation down. In three other cases the pubs which hosted the breweries shut, which could be linked to financial circumstances of the pub trade and not necessarily to do with the profitability of the brewery operation.

Lastly, eight breweries explicitly stated that they ceased operations because their financial performance was poor. If we also consider that some of the other breweries above may have been sold because they were unprofitable, a maximum fourteen of those in the sample, just under fifty percent, possibly fell on hard times and ceased trading.

The Devilfish Brewery closed in January 2013
Although, what was noticeable in my research is that different breweries have given varied reasons for their poor financial performance and closure. Let’s start with the Devilfish Brewery, which closed in early 2013. Its owner stated that ‘…the truth of the matter is that over two years we've made loads of money for the Government and no money for ourselves.’ For them it was the case that the beer duty cut into their profits. They cited no other reasons for their profitability diminishing and their eventual closure. Conversely, the owners of another brewery, the Northcote Brewery in Norfolk which closed in early 2012, took a slightly broader view. They stated its closure was due to a ‘number of different factors…more people drinking at home instead of in pubs, and the rising costs involved in making beer, such as ingredients, transport and tax.’ To my mind this seems a more logical explanation for a brewery's closure than just blaming levels of tax – although this undoubtedly is a factor. Indeed, the impact of the cost of transport and ingredients on breweries' cost positions will have to be assessed in my future researches.

Lastly, and possibly forebodingly for the brewing industry, two breweries have cited a fall-off in trade as being the reason they closed their doors. Lynne Booth, manager of the Oakwell Brewery, which stopped brewing in late-2013, stated that ‘sales were down and not enough money was coming in.’ This was particularly a problem as the company had to maintain a huge building which was in a state of disrepair (This was the site of the Barnsley Brewery which operated between 1888 and 1976). The second casualty of note was the Breconshire Brewery in Brecon. Opened by C.H. Marlow in 2002, its beers soon won awards and its Golden Valley Ale was the star. Yet, when it closed on 31 December 2013 Harlow blamed “a competitive and fragile market”. When the Breconshire Brewery opened there were ten breweries in South Wales; by 2013 there were sixty, plus another in Brecon. Also, the closure of pubs had not helped the company's trade. As such, the brewery’s production had fallen from a peak of 40,000 gallons per year to 10,000 in 2012 and the business had lost “money during the last few years so we had no option but to close”.

The important thing to note here is that this is a clear statement from a brewer that suggests that the growing number of breweries in Britain is diminishing the available trade for them all. Combined with the evidence presented above, it could be possible that were are we currently in the era of a brewing industry bubble that is waiting to burst. As more and more breweries are open, and the number of ale drinkers flat-lines or, at most, grows slowly, it could possibly be argued that the amount of the market share each can capture will shrink. The result may be that many breweries will either struggle to get by month-by-month or eventually they will close.

Of course, a possible 'beer bubble' will not be the only reason why unprofitable breweries closed in the last three years. With many new companies entering the market it may simply be that some of their owners lacked the brewing or managerial skills to run a full-size brewery profitably. They may have expanded their businesses too rapidly, they may not be advertising their products effectively, they may not even be brewing good beer (and I think we can all agree we have had some ropey pints in our time). These considerations are particularly pertinent if we consider that numerous individuals are transitioning from the hobby of home brewing to full-scale commercial operations, two things which, apart from the fundamental aspects of the brewing process, are quite different.

But determining how well companies have been run will be hard, brewers are not going to admit if they were simply not up to the task. Yet, it is hoped that as my research progresses some information will be turned up. Who knows what this week will provide.

Edited: 20/01/2014, 22:22

Thanks to Denzil of the Great Heck Brewery for posting a response here which has alerted me to a few things and has certainly made me reconsider some points.

Thanks also to everyone who has contributed information, it is very appreciated!

DO YOU KNOW WHY THE FOLLOWING BREWERIES CLOSED? ALL INFORMATION VERY GRATEFULLY RECEIVED.


Blackawton Brewery
Blackfriars Brewery Limited
Chorley Brewhouse Limited
Cleveland Brewery
Croglin Brewery
Fallons Exquisite Ales
Fowler's Ale (Prestoungrange) Limited
Golden Valley Ales
Great Gable Brewing Company Ltd, The
Hetty Pegler Brewery
John Eastwood Brewery, The
Jones Brewery
Justice Brewery
Malt B Brewing Company
Moorview Brewery
Nomad Brewery llp
Norfolk Cottage Brewing
Northcote Brewery Ltd
Oakwell Brewery
Poldark Brewery
Red Rat Craft Brewery
Ringmore Craft Brewery Ltd
Rudgwick Brewery Limited
Shifnal Brewery
Swaton Brewery
Tap House Brewery Ltd, The
Taunton Brewing Company Ltd
Thorne Brewery (Yorkshire) Ltd
Toad Brewery
Toft Brewing Company
Union Brewery Ltd, The
Urban Brewhouse, The
Windlestone Brewery
Wyre Piddle Brewery

20 comments:

  1. Crondall closed down due to the owner's ongoing health concerns. I believe it was put up for sale so it could one day be restarted. Big shame as the ale they produced was fantastic, not to mention right on my doorstep!

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    1. Thanks, that's very useful (but a shame it closed down)! Most appreciated.

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  2. I'm pretty sure Pitfield are still going, as a couple of their beers are to be seen at colchester winter fest this week.

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  3. Spectrum closed citing unprofitability, its kit went to Colchester Brewery. Blackfriars has become lacons. Pitfield still brewing last time I looked. St Jude's closed as beer quality was questionable and inconsistent, so you could charitably call it unprofitable. Ufford now renamed stamford. Red Rat got in with celebrity business partner and found position untenable. O'hanlon's has been all over press lately, have been in trouble and in/out of receivership for years. http://www.thisiscornwall.co.uk/Big-Decision-brewery-rallies-following-pound-1m/story-12131678-detail/story.html#axzz2qtPOa8Vm
    Hope that helps

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    1. Thanks so much Paul, this is all fantastic!

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  4. Plassey was sold and became New Plassey under the stewardship of Jack Hanby when Ian Dale went to Wrexham Lager full time.

    Shaws Brewery was sold and became Quantum.

    WC Brewery closed as the owner's employment status became not as comfortable (it was only a 10 gallon plant and wasn't the source their income)

    Chester Ales shut down because of a split between the partner's. It's now Blackers and Sons Brewery.

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  5. Wouldn't like to comment publicly but I know something about some of them. Give me an email and I'll reply.

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  6. See here for info about Royal Tonbridge Wells Brewery: http://baileysbeerblog.blogspot.co.uk/2013/01/is-brewing-bubble-about-to-burst.html

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    1. Peter, thanks for the link, very appreciated!

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  7. Carters Brewery hasn't really shut, but neither has it produced any beer for some years. There was at one time a separate brewer, but he and the owner had a "domestic". The owner, also running the pub, never found the time nor inclination to brew on a regular basis. Hiowever he has recently done a 4.5% brew for a relative's wedding and the remainder of that brew is likely to be on sale at the pub next week. There's just 9 gallons and when it's gone, who knows when he'll brew again.

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    1. Hi Brian, thank you so much for the info! It has all gone into the spreadsheet!

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  8. This comment has been removed by the author.

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  9. http://www.dominionbrewerycompany.com/ For anything Pitfield- related.

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  10. Royal Tunbridge Wells is now Pig and Porter premises. Black Tor took over Gidley's Brewery site. Hanlons has been re-branded and is now at a farm in somewhere in rural x......

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    1. Thomas, thank you very much for the info, it has all gone in the spreadsheet!

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  11. I just blogged about this: See here. I'd also say that perhaps you underestimate the magnitude of beer duty. Even on full relief it is bigger than all a brewers other costs of sales put together. no guff!

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  12. Hi David,

    Great post. Just a thought - does specialization matter? As the market matures and segments, to survive as a small brewer you will have to produce something distinctive that no one else can supply. I wonder if a lot of failing breweries have failed to specialize, perhaps attempting too broad a range or producing decent beer in a very competitive segment which doesn't stand out. Perhaps specialization, whether it be in lager, IPA, stout, mild, hoppiness or whatever is a better predictor of survival, especially for smaller establishments.

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  13. I think Wyre Piddle were taken over by Ambridge Brewery

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