Over 200 breweries opened in 2020 despite Covid-19, says new research

Over 200 new breweries opened in the UK last year despite the devastating impact of the coronavirus on Britain’s hospitality sector, according to new research.

Accountancy firm UHY Hacker Young said numbers grew by 216 to just over 3,000 in 2020 even though pubs were shut for 44 per cent of trading days due to social distancing restrictions.

About 640,000 jobs were lost in the hospitality industry in 2020, according to trade body UKHospitality, making it one of the sectors worst affected by the pandemic.

UHY Hacker Young says the number of breweries grew by 216 to just over 3,000 in 2020 even though pubs were shut for 44 per cent of trading days

However, researchers believe the closure of hospitality firms and the resulting loss in sales may have encouraged people to start new breweries and find alternative avenues to sell their goods, such as direct-to-consumer deliveries and takeaways.

The total number of UK breweries is now more than 1,100 higher than in 2016, which the group also puts down to the growth in craft breweries being purchased by multinationals, such as Brixton Brewery’s sale to Dutch beer giant Heineken.

‘Growth in breweries during a very difficult period for the drinks industry is a positive sign,’ remarked James Simmonds, a partner at UHY Hacker Young. The firm said 55 brewery companies were incorporated between March 16 and June 1.

Simmonds added: ‘People’s appetite for trying new beers from different breweries has contributed to the long-term rise in new breweries being set up. The sector hasn’t fallen into the trap of discounting.’

‘There is also the prospect of an exit to a major brewer if you can build a valuable brand.’

‘With the closure of pubs and bars, smaller breweries have had to adapt to direct-to-consumer models. As hospitality begins to reopen, these new breweries will need to build on the momentum they have created through their direct-to-consumer sales.’

‘People’s appetite for trying new beers from different breweries has contributed to the long-term rise in new breweries being set up,’ remarked UHY Hacker Young’s James Simmonds

Their research comes less than a week after the not-for-profit think tank Localis called for all trading restrictions on pubs to be lifted no later than June 21 to ensure ‘viable trading.’ 

The Power of Pubs report said it was vital the British government protect the industry due to the importance that pubs have on employment and communities, especially in rural areas.

Under government plans, hospitality venues will be allowed to serve people outdoors no earlier than April 12, with indoor dining set to commence from May 17 at the earliest.

Many of the measures announced by Chancellor Rishi Sunak in the Budget a fortnight ago were welcomed by the report’s authors, including the extension of the furlough scheme and the 5 per cent VAT rate on hospitality venues.

Under government plans, hospitality venues will be allowed to serve people outdoors no earlier than April 12, with indoor dining set to commence from May 17

But they warned that more needed to be done to create long-term certainty for the pub industry. The report recommended introducing central government-funded licence fee refunds for the six months to June 2021, a cut in beer duty, and a relaxation on the use of outdoor space and takeaways.

It said: ‘The case for place when it comes to treating Britain’s pubs with fair consideration is, at core, as simple as it is heartfelt. Where there’s a pub, there’s a community.

‘They hold the potential to generate the income needed to lower national debt and kickstart the economy again, but must be helped in trading to remove accumulated debt of the last year and generate income and employment in their communities,’ the analysis continued.

‘The pub and wider hospitality sector will be crucial in the medium and long term not only for our economic recovery but also the social resilience of communities across the UK. Given this, they should play a central role in any local recovery plan.’ 

This post first appeared on Dailymail.co.uk