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Liverpool Echo
Liverpool Echo
Entertainment
Dan Haygarth

Facing a perfect storm, pubs and breweries are fighting for a better future

Hospitality is Merseyside's lifeblood, but the industry has taken hit after hit in recent years.

Arriving hot on the heels of the pandemic, the ongoing cost of living crisis has driven costs up for all businesses. It has also left customers with less money in their pockets.

This perfect storm has hit the pub and brewing industries hard. Across England and Wales, pubs are at their lowest levels on record, while independent breweries are closing at an alarming rate.

READ MORE: 'It’s make or break, and there isn’t much more to break': life at the heart of town in battle for its future

Today (June 15), is National Beer Day - designed to promote and celebrate those who produce and sell beer. To mark it, the ECHO spoke to people working in the industry in Merseyside about the challenges they face and what they need in order to thrive.

Si Vanderbelt and Aggy Perreau run The Little Taproom on Aigburth Road. They opened their micro pub and gin distillery just before the first lockdown in 2020.

As such, their pub did not have the easiest start to life. Able to get through lockdowns by selling takeaway beer, the taproom is now happily established as a community pub in L17 and part of a growing hospitality scene on Aigburth Road.

Though the pub has found its feet and developed a strong community of regulars, it is not immune from challenges facing the entire industry.

Si told the ECHO: "Things have been alright here. We're plodding along quite happily, we're establishing the whole community boozer thing.

"I think that's where a lot of the future lies - good community boozers. Whether it's post-covid or with the cost of living crisis, local pubs can tailor their offerings to who's around, more than city centre pubs, which have a much more shotgun approach. People have to cherry pick but people don't want to have to cherry pick.

"If they know that they've got X,Y and Z on their doorstep and it meets what they're after and the price point that they're after, they will choose that over anything else time and time again.

"We are aware that we're a community boozer and we haven't been one for putting silly prices on things. We do have plenty of expensive beers, but that's because they are expensive beers, not because we're making them expensive."

Aggy Perreau and Si Vanderbelt, owners of The Little Taproom on Aigburth Road (Liverpool Echo)

However, beer keeps getting more expensive. In the year to February 2023, the average cost of a pint of draught lager increased 11.8%. It has risen again in the months since, with £5 pints now pretty much the norm in Liverpool.

Si said: "Last year, for the first time in the nearly 30 years I've been doing this now, I've seen a price increase from relatively major breweries more than once in a year. Prior to 2022 that was unheard of - it's crazy.

"Traditionally we always had the price hike in April or May, post-budget and done as a response to the cost inflation and any changes in duty announced by the Chancellor. In April and May you would brace yourself for hopefully not too big a price hike.

"We had that and now we'd have breweries increasing their prices again in October because they had to. I'd never seen that before in my life.

"We get it - they've got increased costs, particularly with energy. Breweries are huge consumers of energy - so are pubs. It's expensive to keep a cellar cool."

Among the people facing those price rises is Adam Williams, head brewer at Brimstage Brewery. The Wirral company has been making beer since 2006 and has a committed customer base, but it feared the worst at the start of this year.

Breweries are closing across the country. Earlier this year, the Guardian reported that 45 breweries entered insolvency in the year months ending March 31. This was a huge rise from 15 in the previous year.

Head Brewer Adam Williams at Brimstage Brewery (Andrew Teebay / Liverpool Echo)

Fortunately, the first half of this year has been more settled than Brimstage expected. Despite that, the brewery faces pressure from many directions.

Adam told the ECHO: "The last six months have been steady. There was a lot of worry at Christmas about how bad it could be, it’s not been as bad as that.

"Sales are steady, we're carrying on as we were. But energy and raw materials are both going up in price. It’s not ideal from that point of view.

"It is a challenging trading environment, there is a lot of competition out there, a lot of price pressure. We try to keep the price down, but it’s pointless for us not to be making any money."

In such a challenging environment, remaining steady is about as much as businesses can ask for. There are a number of barriers to growth, according to Adam, but he hopes the brewery will be able to find a way around them.

He said: "The biggest barrier to entry is the tied houses (pubs that are required to buy at least some of their beer from a particular brewery). There are so many pubs we can’t deliver to.

"It’s not the landlords’ fault, it’s the companies. We have very loyal customers but our customer base isn’t growing.

"New pubs do start and pubs try the best they can to get something local in. It’s one of those, pressures have never really changed on the brewing side, but costs have gone up.

"We wanted to open a tap room on site for this summer, but we're still working on that. I think that’s how we’re going to find growth - if you were starting a brewery now, you’d start it with a taproom".

The brewery is based on a farm (Andrew Teebay / Liverpool Echo)

Dom Hope-Smith's brewery Carnival Brewing Co. does have a taproom. Found on the King Edward Rise Industrial Estate on Gibraltar Row, the brewery supplies beers to a number of venues in the region and beyond, while serving its modern, craft beer on site.

About his business, Dom told the ECHO: "There are a lot of challenges - not as many as there were in the last year or 24 months with covid, lockdowns and the subsequent issues we've had with that - a volatile supply chain, chemicals and CO2 not being available.

"Our biggest issue at the moment is cost of living, I think that's affecting pretty much everyone in the sector.

"At a pub you're now paying anything from five or 6% to 15% more for a pint, depending on where you go. Heineken recently announced a 15% hike in the price of their core ranges, Guinness did the same before.

"I think the cost of the beer at the pump is the thing that is affecting people the most. But all these factors are playing into the psyche of customers thinking twice before they go to the pub."

Despite those challenges, many of Liverpool's pubs and bars are busy. Recent sunny weather has brought more people out to beer gardens and terraces.

"You look around Liverpool on any given day or at the weekend and it's vibrant, it's buzzing, it's really good to see", said Dom. "You go to the Albert Dock and somewhere like The One O'Clock Gun, who we supply, they're really busy and they're doing really well.

Dom Hope-Smith at Carnival Brewing Co (Dan Burns)

"You go to Castle Street and there are people outside eating and drinking. So, actually, on the face of things it looks like places are doing well and I'm sure many places are.

"However, scratch under the surface a bit and you talk to landlords and you understand where their businesses are at and then I think it's a really mixed picture."

"The traditional pubs, maybe with no outdoor area, with the sunny weather at the moment might be struggling more than those who do have outdoor space, which is a premium."

Landlords Si and Aggy are well aware of that mixed picture in Aigburth. Though their pub is successful, challenges loom and give them hard decision to make.

Si said: "We have to accept that, quite frankly, going out for a pint is a luxury that not everyone can afford in the best of economic times. Let alone during the cost of living crisis.

"Where it comes on the pecking order of that list of luxuries is another matter. I'm very aware that we are susceptible to the fact that we are a luxury.

"But at the same time, I know we're sort of not because I'm aware of the community value and the human value of the local, which can't be lost.

"They are community hubs, it's where we all get together. People who know each other incredibly well but only because of the pub. Whether that's sitting down to watch the football together on a Saturday afternoon and that's what you do with that group and that's how you know them. That's vitally important. How resistant are we? We'll see."

Though customers have less money in their pockets, Si and Aggy believe the bigger threats to pubs are costs and supply.

Si said: "We wonder how expensive will beer get and at what point can we say 'we can't buy from you anymore because you are too expensive'? We understand why they are expensive but for us, we could be priced out.

"Our energy contract renews in two months' time. That's a huge increase in costs for us that has nothing to do with anything else.

"Suddenly we've got to find more money every month just to cover our electricity. There's not much we can do about that - it will include a price rise that's as small as possible - it will have to.

"You're left with no choice but to pass that price increase onto the consumer. We're quite proud of the fact we pay our staff well - way above minimum wage regardless of their age bracket. You can't scrimp on things like that.

The Little Taproom micropub and distillery on Aigburth Road, Liverpool (The Little Taproom)

"Two years ago, people were livid at some pubs charging £4.20 for a cask pint. Now, our most expensive cask is £4.60, we'll probably have an extra price bracket soon that will create a £4.80 cask.

"Because some beers are getting more expensive, we can't absorb that any more. By the end of this year, I wouldn't be surprised if we had a £5 cask and I'm really not looking forward to that."

He added: "My fear is not so much the customers thinking 'we just can't afford to go out for a pint as much'. Yes, maybe it will happen to us to a degree, but it's rising costs for us that is the worry.

"I do fear for a lot of the smaller breweries, which are shutting at a staggering rate. The costs are just ridiculous - absolutely ridiculous. Their route to market was always niche but now they need to find more ways".

About that challenge, Dom said: "We don't want to see the progress of the growth of craft breweries in Merseyside over the last 10 years or so to go. The rate at which breweries are closing is terrifying.

"Fortunately there is a culture revolving around these breweries. Liverpool has a very supportive independent pub and hospitality network.

"Landlords and business owners who want to, rather than going with the easy fix of getting tied lines and installations paid for by a big brewery, are trying to get independents in, buying local and supporting the local craft beer scene."

It is evident that life could be a lot easier for pub and brewer owners. Dom, Adam and Si believe that there are simple solutions which would facilitate this.

All would like to see a cut in VAT for draught products, while Si wants to see windfall taxes to help businesses with their huge energy bills.

Despite the unfavourable conditions, pubs and breweries are battling on. Hospitality is central to Merseyside's economy - the three who spoke to the ECHO underlined how grateful they are of the support from those whose custom keeps them going.

Looking ahead, Dom said: "I hope that (people wanting to go out) continues. We've got a really thriving hospitality sector which covers a wide gamut of interests and budgets and preferred ways of going out. It would be a real shame if they were to close due to the cost - it would be a detriment."

For Adam, it is a case of hoping for a more aggregable trading environment to arrive.

He said: "It was all doom and gloom but it has now been pretty steady. We’re not making the money that we were making but we’re surviving.

"That is thanks to customers and pubs and people finding us and their support. It’s great to have that support for the 17 years we've been brewing.

"We are positive. We hope for the tap room and some growth. We hope prices will come down soon. We’re doing our best and trying to keep prices of the beers down."

Si is similarly thankful for the support his and Aggy's pub gets.

"People are still going out and supporting their favourite places. I always reiterate how important it is to support independents and locals and think about where you put your money, what you value and where your money goes", he said.

"But considering everyone is facing this crisis, everyone's bills have gone up, mortgage fees have gone through the roof, their car insurance has gone up. That's got to come out of some budget.

"I appreciate it also comes out of the budget that they go to the pub with. I'm always grateful, every time that someone comes into the pub these days, I'm more and more grateful that they're still doing it."

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