Sightlines: UK Brewers Consider the implications of Brexit

katharine uhrich

THE GIST
On Friday June 24 the UK awoke to the news that the public had voted to leave the EU in a historic referendum, by a slim 52 to 48 percent majority. This triggered a reaction that led to the resignation of UK Prime Minister David Cameron and a sudden collapse in the UK economy, which has left the country in disarray.

WHY IT MATTERS
This news could be bad for beer. Really bad. As the news broke on Friday the pound had already slumped by 10% to a 30 year low. This will put increased economic strain on breweries of all sizes. 

For example, a company based in The Netherlands produces the one-way, disposable Keykeg containers, which are popular with small UK brewers. According to Richard Burhouse, the director of Magic Rock Brewing in Huddersfield, Yorkshire, a container of Keykegs had already increased in price by over £800 ($1050) since the referendum result was announced on Friday. An increased cost this large may well be passed directly on to the consumer. For US brewers the UK is its 4 th largest export market. A weak pound will drive up the cost of exports and could make UK operations less viable for US producers. Claire Ashbridge-Thomlinson, director of the East London Brewing Company commented: “In the short to medium term, Brexit means a lot of uncertainty for our business. As a concrete example of this, we have just had a cancellation of an export order from an Italian customer who felt insecure going ahead in the present climate.”

Mike Marcus of Manchester’s Chorlton Brewing Company added: “I'm worried about the bigger independent breweries. Many of them export 50% or more of Their stock. If they're unable to get the same margins, it may incentivize them to sell it into the UK at a reduced price.”

Will the knock on effect of this also see US craft brewers pull out of the UK market in search of others that are more lucrative?

— Matthew Curtis

Matthew Curtis

Matthew Curtis is a British beer writer and photographer based in London, England, giving GBH a unique perspective on the British Craft Beer scene.

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