UK breweries fear ‘false start’ in July

UK breweries now face “months of uncertainty” over how much beer to make, if any at all, incase pubs are able to open this summer.

Nick Mackenzie, The CEO of Greene King – one of the UK’s largest pub groups – warned that a “false start” would be a disaster for the industry after the government revealed a conditional plan to reopen parts of the hospitality sector in July.

Total beer sales in the UK fell 13% in March, after pubs, bars and restaurants were ordered to close on 20 March to slow the spread of coronavirus. The trade body expects April’s figures to be far worse, with hospitality venues closed for an entire year.

The lockdown has been particularly bad for small and independent breweries, which have collectively lost 82% of their sales since lockdown measures were put in place, according to a survey carried out by the Society of Independent Brewers (SIBA).

Paul Jones, the founder of Manchester-based brewery Cloudwater, told the drinks business that he has lost 60-70% of his business since lockdown began.

“We’re sort of now sat at around 40%-30% of our usual production output,” he told db. “To be selling 35-40% online sounds wonderful but of course doing that via small orders, small pack sizes is just not providing us with anything other than survival level income.”

Restaurants and cafés could start to reopen “at the earliest by July”, Prime Minister Boris Johnson told a press conference on Sunday 10 May.

But Johnson added that “further scientific advice” is needed, and changes would only be made “if the numbers support it”.

He hoped “at least some of the hospitality and other public places” would start to reopen at this time, “provided they are safe and enforce social distancing”.

Now with a potential reopening date on the horizon, brewers face yet another challenge. When should they start brewing for pubs? How much should they brew? And what should they do if pubs and bars are forced to close again?

Greene King boss Mackenzie said: “We are keen to avoid a false start and the support that the government has provided during the lockdown will also be needed during the recovery phase as maintaining social distancing will have a significant impact on pubs.

“We are working closely with our people and our tenants to put in place a reopening strategy that adheres closely to government guidance so that when we do open our doors again, it is with robust safety and hygiene measures in place for our team and customers.”

Paul Jones of Cloudwater called Johnson’s advice “absurd” and “careless”.

Jones told db: “it is absolute chaos trying to know what we should do.”

Jones said it is hard to know how much to start brewing for trade customers. It is unclear how many pubs will be able to re-open, and how many people they will be allowed to serve. Meanwhile, a survey of over 500 pub owners undertaken by the Forum of Private Business (FPB), found that nearly 4 out of every 10 are less than confident of surviving a June lockdown.

“The brewing industry has to take on the most risk here,” he said. “At some point the wider trade will ask us for stock. They’re not going to pay up front because they won’t know what kind of custom they’re going to have.”

Returning to draught beer sales, he said, is “a massive problem.”

“We’re going to have to stick our fingers in the air. It’s going to be months of uncertainty.”

Opening and closing hospitality businesses based on infection rates adds another layer of confusion. In Hong Kong, bars have reopened and closed several times as coronavirus cases have fluctuated throughout March and April. In Germany, cases have already started rising after some shops were allowed to reopen. Bars in South Korea have been advised to shut again after 54 new Covid-19 cases were confirmed following an investigation into Seoul’s Itaewon district.

“Even wen we get to the point that we’ve drawn up sensible plans – any resurgence in cases will shut the country down,” Jones said.

“Do we brew in July for August opening – if we see a spike in cases do we just lose money?”

James Calder, SIBA’s chief executive, believes that some breweries may be able to get up and running again in eight to 12 weeks.

“In that intervening period our sector requires continued direct support from Government to ensure that the 1 million jobs in pubs, brewing and supply chain are preserved.”