‘We’re surviving by the skin of our teeth’: The storm hitting Manchester’s breweries – and what it means for your night out

A perfect storm of increasing energy costs, Brexit and the aftermath of the pandemic is battering Manchester’s independent breweries and about to hit beer drinkers squarely in the wallet.

Sky-rocketing costs of raw materials from grain to aluminum cans, inflation and increasing ‘border friction’ caused by our departure from the EU mean that the price of a pint is going to get higher, industry insiders say.

“If you remember Gladiators, it’s like we’re at that bit at the end, where we’re trying to get up the travellator,” says Paul Jones, co-founder of the award-winning independent brewery Cloudwater.

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“Well it feels like that, and it’s covered in oil, and Wolf is trying to whack us with a baton at the top.

“We’re surviving, but only by the skin of our teeth, really. The industry is going through all kinds of different pain at the moment.”

Cloudwater’s Manchester tap room

Jones says that the price of malted barley alone is up 11%, and canning, which makes up the lion’s share of Cloudwater’s output, is more than 20% more expensive. Grain costs are a ‘double digit’ percentage increase.

CO2, also used in the canning and bottling process, has as much as doubled.

“Everything,” he goes on. “Raw materials, brewing ingredients, utilities, cost of living, which is a factor for employers like us who like to keep their staff well, well away from any kind of working poverty scenario.

“All of the basic costs that we face, everything has gone up. And the questions for us now are ‘what can we stomach?’ and ‘for how long can we stomach it?’

“We want to make sure that in coming out of one of the most difficult periods in the UK brewing industry’s history we’re helping consumers back into bars, and back into bottle shops.”

Cloudwater say they will try to shoulder as much of the expense as they can, by reducing profits rather than passing costs on to beer drinkers.

But how long they can do that for is another matter.

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“It’s difficult to conceive of solving the problem we find ourselves in, with the cost of living crisis, purely by putting all of those price increases onto the consumer,” Jones adds.

“I don’t know how we will solve it as a business. I know that we will try and absorb it through our profit margin to some extent, as much as we can.

“There will be a lot of celebration as things start to open up more, we’ll see office staff return, and hopefully return in good spirits with us turning a corner as far as covid is concerned. To meet that occasion by putting the cost of celebration up feels unpalatable.

“But also, to look at absorbing it long term, it’s simply not a possibility.

“The context of this is the work of the government. There’s nothing else to say.

“If it wasn’t for the type of Brexit that we’ve trying to accommodate and deal with, if it wasn’t for the government’s foreign trading policies, we would not find ourselves in this type of position.”

Pinpointing the precise source of the issues facing independent brewers is something of a moving target. But Brexit has unquestionably had a detrimental effect.

So-called border friction, which was never an issue prior to the UK leaving the EU, now makes the process of importing materials and exporting beer far more complex and costly.

“Brexit has definitely had its impact, there’s no question,” says Runaway brewery’s Mark Welsby.

Mark Welsby of the Runaway Brewery

“The hops we buy, even if they’re American, they come through Europe, so we’re having to buy them from Belgium, and often there are complications, complications which simply didn’t exist previously.

“There are more middlemen in the process than there used to be. We need to pay more people to get us through the hoops now. Shipping stuff to Europe isn’t happening either, for the same reasons.

“We were not big exporters, but we would get orders for a palette to be shipped off to Madrid or Copenhagen, and now that’s gone.

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“We would be working with small businesses, small importers, not huge distributors, and a lot of them have decided short term that until things get easier again, they’re just not interested in UK beer, which they were previously.”

Supply chain issues related to the pandemic have also had a huge knock on effect, and not just for the small independents.

Stockport’s famous Robinsons Brewery runs over 250 pubs and has been making beer since 1849, but rarely has it experienced such problems.

Oliver (Right) And William Robinson In The Bakers Vaults Pub In Stockport

“It’s the cost pressures on the industry as a whole, from poor harvests in Canada to the supply chain,” says Oliver Robinson, the brewery’s joint managing director.

“Stuff that we might bring over from abroad in containers, for example. A container three years ago would cost us £1200 – it’s now costing £15,000.

“It could be pump kits we’re buying from China or parasols, all of which need to be shipped over.

“We’re not getting anything through our letterbox saying ‘We’re pleased to announce that our prices are coming down’.

“It’s across everything, from the huge increase in malt prices to glassware.

“So it’s no surprise to anyone, the reports that prices of a pint could go up to 50p, and pints going over £6, depending on what you’re drinking of course.

“In one breath we have to look after the customers, but also have to make sure we’re fit as a business long term.

“Our pubs are under those same pressures, and they have to be sustainable, and we’ve got to make sure all our licenses are making enough money to stay in business too.”

Many in the brewing industry think that the government should be doing much more to help brewers weather the storm they find themselves in.

“Our members have come out of the pandemic with an average of £30,000 of debt each, and in 2020, we lost about 160 small brewers,” Barry Watts, head of policy at the Society of Independent Brewers (SIBA), told the MEN .

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“Only this week they’ve announced an additional £1 million for small brewers in Scotland, and we’ve not had these direct funds in England, just these discretionary ones, so it’s a postcode lottery.

“The government announced in the budget last year this new lower rate of duty for draft beer, but it won’t be introduced until February 2023, so a whole year’s time.

“They should bring that forward, to as soon as possible this year to help brewers get through this crisis.

“There’s a lot of uncertainty. We’re facing a multitude of shocks and pressures.

“It’s difficult to know what’s going to happen, but it’s putting these businesses at great risk.

“There’s only so much brewers can absorb, no one wants price increases, but that might be what businesses have to do.”

“I think it’s just going to be a reality that beer is going to be more expensive,” says Rik Garner, founder of Salford’s First Chop.

First Chop’s Rik Garner

He told the Manchester Evening News that his energy bill alone is going to be £20,000 more this year than last year, and that’s without factoring in the various other increased costs.

“We are going to have to put our prices up, and we’ve never been a company that has taken the p**s with our prices.

“It may well mean that if you go out on a Friday night, you might get four pints instead of five pints, and then people have to make a choice,” he says.

“The pressures on us will mean that we do have to put the price of beer up. We’re not all going on holiday to the Maldives. We’ll put the prices up to be able to pay staff, and put food on people’s tables.

“That said, there are a lot of people more up against it than we are. Complaining about the cost of a pint of beer, it’s a bit of a first world problem.”

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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