Another bubble pops- rise in UK breweries going bust

[MP1]

7 hours ago, Innkeeper said:

 

My local one produces about 15 different beers - it’s easy to taste them all as you can buy tasting ‘platters’.  Last time I went, twelve of them were just variations of grapefruit flavour - tasted basically the same beer to me.  Oh yes, one was a guava beer 🙄

Used to be termed a defect in the beer, along with pear drops....

Microbreweries are just not subjected to the same quality controls as the regionals and nationals, and frankly the product is often pretty poor.

The control standards just can't be replicated in a small producer environment.

The Quaffale website records most of the start ups and failures, and there is always a good degree of churn.

SIBA regularly advertises the 'gone bust' start-up equipment which seems to do the rounds, mainly consisting of converted process vessels with a bit of wood cladding strapped to the outside.

I'll take a pint of Pedigree,Landlord, or Unicorn any day.

It's (still) grim up North.

 

[scottbeard]

8 hours ago, Trampa501 said:

Rise in UK breweries going bust amid thirst for cheaper craft beers | Food & drink industry | The Guardian

 

Why do you see breweries as a ^bubble^?

[reddog]

1 hour ago, Armus said:

@fellow - going cashless let’s me know exactly how much I’ve spent, I can see it more easily in my banking app.

@reddog I’ve drank a lot of craft but the quality is extremely variable. If I’m “out out” standard lager or spirits do the job. Beavertown is Heineken now, similarly Camden are InBev (Budweiser, etc.).

Yes, you are taking a gamble with craft beer, some of it is horrible and it's not always easy to do samples in a busy bar.

 

I guess you know where you stand with lager, it's quite hard to have a bad pint.

[Lagarde's Drift]

19 minutes ago, scottbeard said:

Why do you see breweries as a ^bubble^?

Lol. Web forum full of misery pants attracts miser threads? 

Loving (good) breweries. Nowadays most of the small-medium ones have a tap room so you just go there to drink their stuff. As mentioned above, larger ones sold out to corps so perhaps that is always the aim, get popular and cash out.

[Stewy]

6 hours ago, Lagarde's Drift said:

Lol. Web forum full of misery pants attracts miser threads? 

Loving (good) breweries. Nowadays most of the small-medium ones have a tap room so you just go there to drink their stuff. As mentioned above, larger ones sold out to corps so perhaps that is always the aim, get popular and cash out.

Never had a bad pint of Magic Rock, Vocation or Marble at their places.

(Although I can't be doing with murk that looks like orange juice.)

Fortunately in Stockton, we have an option of £2.20 CASK in Wethers, foamy Bass at the Sun Inn, then loads of niche micros for cask in a calmer environment or £7 pints of CRAFT. 

[hotblack42]

Was paying 80-90p for real ale in Sussex pubs 1984.  So it should be about £4 now.

£8 if beer had tracked house prices..😳

Back then beer varied by maybe 50% between northern boozers & upmarket SE pub / hotel.

It's a weird market now with 3-4x differences.

Edited June 6, 2023 by hotblack42

[Trampa501]

8 hours ago, scottbeard said:

Why do you see breweries as a ^bubble^?

More the craft breweries, of whom there was a big increase in the last ten years.

Quote

The insolvencies were largely of smaller craft breweries, which operated in an oversaturated market and faced overheads rising and drinkers choosing to buy cheaper beers, said Paul Maloney, an associate director at Mazars.

Quote

Meanwhile, the boom in craft brewing has meant there are too many brands competing for limited shelf space in supermarkets and bar space in pubs.

 

[scottbeard]

2 hours ago, Trampa501 said:

More the craft breweries, of whom there was a big increase in the last ten years.

Just seems like normal healthy competition to me, rather than a bubble.

A 'bubble' in economics is the fast rise of an asset price to an unsustainable high, not just people opening small businesses and not all of them succeeding, which happens in every industry all the time?

Ah well, I guess it doesn't really matter.

[nero120]

1 minute ago, scottbeard said:

Just seems like normal healthy competition to me, rather than a bubble.

A 'bubble' in economics is the fast rise of an asset price to an unsustainable high, not just people opening small businesses and not all of them succeeding, which happens in every industry all the time?

Ah well, I guess it doesn't really matter.

Not a bubble, just the typical misallocation of capital/resources due to interest rates being far too low for too long.

[PeanutButter]

4 minutes ago, scottbeard said:

Just seems like normal healthy competition to me, rather than a bubble.

A 'bubble' in economics is the fast rise of an asset price to an unsustainable high, not just people opening small businesses and not all of them succeeding, which happens in every industry all the time?

Ah well, I guess it doesn't really matter.

Honestly? I think it was a pun. Beer..bubbles…

[scottbeard]

2 minutes ago, PeanutButter said:

Honestly? I think it was a pun. Beer..bubbles…

Well the OP responded and didn't say it was a pun!    Like I say, it doesn't really matter.

[NoHPCinTheUK]

The beverage and food market is all about marketing. Quality is a nice word that can only be used by very few brands and in niche markets. (A Crystal Rose would cost you £500).  I once read that Chianti wine was the regional cheap wine but it then became a thing after a massive campaign. Same with Prosecco and olive oil from Spain. I will never forget what I saw in a post-Brexit documentary with a man fishing lobsters in Cornwall saying post Brexit they had lost their most important market in Europe where lobster would sell for 40/50 euros per kg when in England you’d need to sell them for less than 10. Put Jamie Oliver and Gordon Ramsey live on air 7/7 cocking lobsters, articles on the Guardian and their price would quickly catch up with that of the continental market. 

[winkie]

5 minutes ago, NoHPCinTheUK said:

The beverage and food market is all about marketing. Quality is a nice word that can only be used by very few brands and in niche markets. (A Crystal Rose would cost you £500).  I once read that Chianti wine was the regional cheap wine but it then became a thing after a massive campaign. Same with Prosecco and olive oil from Spain. I will never forget what I saw in a post-Brexit documentary with a man fishing lobsters in Cornwall saying post Brexit they had lost their most important market in Europe where lobster would sell for 40/50 euros per kg when in England you’d need to sell them for less than 10. Put Jamie Oliver and Gordon Ramsey live on air 7/7 cocking lobsters, articles on the Guardian and their price would quickly catch up with that of the continental market. 

All about marketing creating demand......pig cheeks, belly and streaky bacon all used to be dirt cheap cuts....now more expensive than other cuts including back bacon.......shell fish, winkles, whelks and scallops really cheap, now expensive.....

Flavored spirits must be a big one.....anyone can make a flavoured gin by adding whatever flavour to it.....lime, elderflower juice, any liquor, cherry, orange etc.....

[Trampa501]

17 minutes ago, NoHPCinTheUK said:

The beverage and food market is all about marketing. Quality is a nice word that can only be used by very few brands and in niche markets. (A Crystal Rose would cost you £500).  I once read that Chianti wine was the regional cheap wine but it then became a thing after a massive campaign. Same with Prosecco and olive oil from Spain. I will never forget what I saw in a post-Brexit documentary with a man fishing lobsters in Cornwall saying post Brexit they had lost their most important market in Europe where lobster would sell for 40/50 euros per kg when in England you’d need to sell them for less than 10. Put Jamie Oliver and Gordon Ramsey live on air 7/7 cocking lobsters, articles on the Guardian and their price would quickly catch up with that of the continental market. 

There's a lot of sea-food/fish we don't eat in this country, and gets exported where possible. Strange really. 

[Will!]

A pub company rather than a brewer, but City Pub Group remains my bellweather for the pub trade's struggles.

AGM Trading Update

Quote

Trading
 

City Pub Group, the operator of a high quality, predominately freehold estate of 43 premium pubs, increasing to 52 Pubs including Mosaic, across Southern England and Wales, is pleased to announce that trading continues to be strong for the first 23 weeks ended 4 June 2023 with sales up 20% on 2022. LFL sales improved by 13% on 2022 and would have been higher if not for recent train strikes. The strong LFL performance is being driven by our strategy to further premiumise the estate and a continuous focus on customer service. We expect this trend to continue through H2 and we will also benefit from the new openings from 2022 which have performed well to date.
 
Costs have remained in line with expectations and there is now clear evidence of abatement in some areas, although food inflation remains high. Additionally, the Group is benefitting from the disposal of the lower margin pubs sold in 2022.
 
With net debt low at £8m and £25m undrawn on our existing RCF, the Group has the financial flexibility to achieve its goals. Whilst we are looking at acquisition opportunities carefully, we still believe that in the short-term pub prices will fall and we are therefore in no rush to go out and acquire. We will continue to focus on organic growth from our existing estate.
 
Majority shareholding achieved in Mosaic (9 pubs)
 

The Board is also pleased to announce that the City Pub Group has now secured 52% of the shares in Mosaic Pub and Dining Group, through the acquisition of existing shares in The Galaxy (City) Pub Company Limited, The Pioneer (City) Pub Company Limited and The Sovereign (City) Pub Company Limited (the "Mosaic Companies") for a total cash consideration of approximately £0.7m, acquired by way of a tender offer from underlying shareholders in the Mosaic Companies comprised of a number of EIS holders. This transaction takes its total investment to £7m. For the year ended 27 March 2022, the Mosaic Companies recorded an audited aggregate loss before tax of £110k, with aggregated net assets as at 27 March 2022 of approximately £10m.

Volume up, margins tight, buying loss-making pubs.

[Will!]

City Pubs agrees to Young’s takeover offer; Young’s profit rises

I think 'spoons will be last man standing the pub business though.

[winkie]

On 05/06/2023 at 17:10, nightowl said:

I find that in my local when they have specials from the local brewery which change every month or two.   

As far as my taste buds are concerned they could have the same keg in the cellar, but a new amusing but different cartoon logo on the pump to tempt me! 

Bit gimmicky all the flavoured beers, not unlike flavoured gins......add a few drops of any liquor to any gin to make it a flavoured gin.

[Will!]

 

Sam Smith's having problems: Historic North Yorkshire brewery admits ‘We are having great difficulty'

but it looks like all the brewers and pubcos are really:

Greene King is probably in the least trouble.

ROAA = Return on Average Assets.

Edited December 18, 2023 by Will!

[dryrot]

27 minutes ago, Will! said:

 

Sam Smith's having problems: Historic North Yorkshire brewery admits ‘We are having great difficulty'

but it looks like all the brewers and pubcos are really:

Greene King is probably in the least trouble.

ROAA = Return on Average Assets.

Sam Smiths is scarcely benchmark. I love their London pubs - the John Snow in Lexington St W1 is a gem - but it is led - er- in an individual manner...

Edited December 18, 2023 by dryrot

[Maghull Mike]

Pubs where great fun, but they taxed the sh1t out of them......then the smoking ban, i mean why not have a smoking room?

Too expensive by far.............i Recall paying 60p a pint for Cider back in the day.

[Blobsy]

Prefer red wine myself.

There’s always one old CAMRA fart propping up the bar in my boozer going on about “The best pint I ever had were Theakston’s Old Peculiar at the Malt Shovel Inn in Oswaldkirk March 1983.” 

Oh bore off.

[Fishfinger]

It's now why I grow my own weed. A couple of quid for a seed and wonderful nights of relaxation on my own or with guests plus a good nights sleep.

Don't miss the booze one bit these days...

[Sour Mash]

3 hours ago, Maghull Mike said:

Pubs where great fun, but they taxed the sh1t out of them......then the smoking ban, i mean why not have a smoking room?

Too expensive by far.............i Recall paying 60p a pint for Cider back in the day.

 

Depends on legislation but I'm pretty sure most places just outright ban smoking 'indoors' - even if everyone is a consenting smoker.

It has lead to some inventive outdoor shelters with roofing but open walls, in alleys behind the pubs.  In Belfast and Dublin at least ...

 

I personally don't smoke, was never a smoker and absolutely would not recommend it.  But am strongly opposed to the creeping banning of it.  It was just a prototype rights grab under the guise of virtue signalling about health.

[A.steve]

15 minutes ago, Sour Mash said:

I personally don't smoke, was never a smoker and absolutely would not recommend it.  But am strongly opposed to the creeping banning of it.  It was just a prototype rights grab under the guise of virtue signalling about health.

I am in complete agreement.

I've never smoked; I don't like smoking and I don't like others smoking... not just because it affects those around the smoker, but also because it's a bad choice for the smoker themselves.  I recognise the positive effects of making smoking less desirable and alluring.  I didn't expect it to happen - and I'm not in favour of authoritarian impositions - even when they are well meaning and deliver advantages to myself and others.

I suppose the 'creeping ban' is (pragmatically speaking) smarter than prohibition - which, when tried for alcohol... I think... only promoted it.

[fellow]

4 hours ago, Maghull Mike said:

Pubs where great fun, but they taxed the sh1t out of them......then the smoking ban, i mean why not have a smoking room?

Too expensive by far.............i Recall paying 60p a pint for Cider back in the day.

The problem with pubs is the prices are a complete lottery and you don't know what they will be until after you have ordered. I went to a working men's club a few weeks ago and bought two drinks for about £4. I went to a pub this week and two drinks cost £13.95. Nobody else seemed in the slightest bit bothered and I think that's how the pubs get away with it as no one selects the venue based on price.