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Drinks companies to endure water supply limits
Craft breweries and distilleries have been told they will need to keep a lid on water usage until 2033, according to reports.
The move, as reported by the Guardian, is being led by Essex and Suffolk Water and will block craft breweries and distilleries from expanding by capping water usage for most of the next decade.
The decision has been made amid concerns that the supplier will be unable to meet rising demand and was detailed in a letter sent to local businesses explaining the situation.
Reports outlined how Essex and Suffolk Water has imposed a “moratorium” on new mains-water connections for non-domestic use until 2033 and told small business owners that it would be unable to increase their usage above existing levels via their current connections.
In a letter to small companies, seen by the national press, the water company stated: “You should not plan to increase your mains water use if it is for non-domestic purposes. Without the moratorium we will not have sufficient water to meet all existing and new mains water demand until we have developed the new water supplies.”
Heart of Suffolk Distillery managing director Ryan Luke, who received the letter, said: “Water is fundamental to the production of our spirits. We are constantly increasing the number of distillations we carry out … and will be using more water to match our growth.”
The decision could, according to Luke, force businesses to move which would also be costly.
Luke explained: “We love where we are and have spent a lot of money and time building the distillery up. To relocate would add financial pressures.”
Humber Doucy Brewery co-founder Alan Ridealgh also said that the issue had not been subject to any consultation and would have a detrimental effect on the business.
Ridealgh admitted: “I’m extremely frustrated. We would have to close – if we can’t have more water here, then we will not reach the point of profitability. Or we would need to move. We had committed to expansion to put in new vessels to expand our production before we received the letter. This has come as a bolt from the blue to us. I completely understand why we need to manage water but this is just ridiculous and there has been no real consultation. They clearly don’t realise how much water small businesses use. To make one pint of beer you need about three and a half pints of water – and the extra water isn’t wasted.”
According to the industry regulator, Ofwat, other non-domestic users are facing price rises for water of nearly 30% by 2030 and reminded that while large industrial users can negotiate cheaper rates for using greater volumes small firms cannot.
Federation of Small Businesses policy chair Tina McKenzie said water companies needed to “accelerate” progress on tackling leaky, “underinvested” infrastructure after a 2019 commitment to increase supply and decrease demand.
McKenzie added: “The water moratorium in Suffolk shows there is still a long way to go before achieving that. Water efficiency can be improved without preventing small firms from growing.”
In response, Essex and Suffolk Water’s water director Kieran Ingram said: While we sympathise with affected businesses, we are forecasting business demand for water to double in our Hartismere area, which covers Eye and surrounding villages. We have to protect water supplies to our existing customers, especially to household customers who we have an absolute legal requirement to supply. While we still have more work to do, we are definitely improving the amount of water lost to leakage and our operation teams work tirelessly attending reported bursts to fix them as soon as possible.”
The company is said to be part of Northumbrian Water, owned by the US private equity giant KKR and investment firms controlled by the Hong Kong billionaire Li Ka-shing.
In the most recent financial year, Northumbrian reportedly paid out £108 million in dividends and proposed a further £37 million payout.
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