Drop in beer sales signals changes needed for brewers
Data from the British Beer & Pub Association (BBPA) revealed pub beer sales dropped by two fifths (40%) in March, compared to the same period in 2019.
However, beer sales in the off-trade were up 10.6% but this uplift didn’t make up from the loss in the on-trade, resulting in total beer sales falling 12.7% in March 2020 versus March 2019.
This followed Prime Minister Boris Johnson calling on the public to avoid pubs and bars on Monday 16 March before ordering them to close on Friday 20 March.
BBPA chief executive Emma McClarkin said: “These stark figures reveal how lockdown is having a devastating impact on pubs.
“The cliff-edge impact on our sector in March, when people were told to stop going to the pub and then pubs were shut down, is clear to see.
“In April, beer sales for pubs will be zero. This is devastating our sector, which still has huge costs to cover, far in excess of the sales revenue and financial support they are receiving from Government right now.”
Save for future
She added: “Local pubs are the heart of our communities. They are vital socially, culturally and economically. Without further support, particularly for the 10,000 pubs that aren’t getting any grants, many pubs across the UK are in real jeopardy of being lost forever.
“When this crisis is over, the first place many will want to visit with their friends, family and neighbours is their local pub. The Government must invest in them now to save them for the future.”
National accountancy group UHY Hacker Young said the boom in craft beer has reversed the trend in closures that has been in place since World War I, when the number of breweries dropped from 3,556 in 1915 to 885 in 1939. In 2012, there were 1,218 breweries.
It called for further Government and local authority support to help the brewing sector through the crisis, including an expansion of the Small Breweries’ Relief and a more sympathetic approach from councils in collecting licensing fees.
It also urged brewers to look to make use of the Government Coronavirus Business Interruption Loan Scheme in order to help fund the adaptation of their sales channels to match changing demand.
This followed the group’s research, which revealed the number of UK breweries had stalled for the second year in a row (dropping by one site over the past year to 2,273) as craft beer slows, after a period of “explosive growth”.
The lockdown means breweries need to expand their capacity to sell online, along with selling greater quantities of craft beer to local off-licences, it added.
Use support
Post-coronavirus, the craft beer market should adapt to challenges set by the no and low-alcohol trend and “Drinkstagramming”, the accountancy firm advised.
UHY Hacker Young partner James Simmonds said: “Stalling growth in the number of UK breweries is not the whole story – with the UK remaining one of the world leaders in craft beers.
“In order to help the sector bounce back as quickly as possible from coronavirus, the Government should consider expending the Small Breweries’ Relief to include a wider group of breweries.
“An increase in the level of business rates relief for brewers and pubs would also be welcome. Brewers should make use of this support available to them to scale up their online platforms, in order to increase their online sales directly to customers.
“Consumer habits are likely to change even after the lockdown has ended, and brewers need to be able to capitalise on where consumers are now looking to buy their goods.
“Innovative new strategies and products may also be required for brewers to tap into the no and low-alcohol trend currently popular with younger generations.”
