Rising craft beer demand pressuring traditional brewers in UK

Global Business

Rising craft beer demand pressuring traditional brewers in UK

This year marks 15 years since the U.K. introduced a tax break on beer duty for microbreweries.

It has spurred tremendous growth in the country’s craft beer industry.

But increased competition and rising demand has put pressure on mid-sized and larger traditional brewers.

CGTN’s Natalie Powell reports.

Rising craft beer demand pressuring traditional brewers in UK

Rising craft beer demand pressuring traditional brewers in UK

This year marks 15 years since the U.K. introduced a tax break on beer duty for microbreweries. It has spurred tremendous growth in the country's craft beer industry. But increased competition and rising demand has put pressure on mid-sized and larger traditional brewers. CGTN’s Natalie Powell reports.
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The Fullers Family has been running a brewery in West London since 1829, producing the U.K.’s best-selling cask ale, London Pride.

But with growing British interest in craft beer, Fullers has had to adapt its output for these changing tastes.

Britain has more breweries per capita than anywhere else in the world and last year alone the number of U.K. breweries grew by 8 percent.

There’s been a dramatic rise in microbreweries, largely because of a tax break introduced in 2002 for anyone producing less than 5,000 hectoliter a year.

In another part of London we find craft brewer FourPure, who set up shop 3.5 years ago, benefiting from this tax break.

“The progressive beer duty definitely means that if you’re a small brewery starting up, its’ easier to compete with much larger breweries out in the trade, it makes a big difference, and it really helped us get going too,” John Driebergen, head brewer of FourPure Brewing Co. said.

Now producing much more but still profiting from a sliding scale duty-rise, FourPure said reinvesting correctly and understanding what customers want has been key to their success.

But some argue the market is becoming oversaturated, with more than 11,000 U.K. beer varieties now available. And larger breweries said duty benefits for smaller businesses can create an unfair advantage.

There certainly is a thirst for craft beer in the U.K. and it’s arguably been created as a result of a tax-break for microbreweries.