Scottish breweries are closing at a rate of more than one a month as they face a double peril.

Writing this week about a decrease in the number of smaller breweries it emerges the decline in craft beer makers has this year become steady, yet it comes as demand is at its height. So what’s happening?

The Society of Independent Brewers and Associates has recorded 13 Scottish breweries closing since October last year.

The trade organisation which describes itself as the voice of independent brewers said economic pressures through tax and ingredients costs as well as getting access to distribution are taking their toll.

SIBA said there are now 129 breweries across Scotland, set against 142 at this time in 2023.

The quarterly statistics were released this weekThe quarterly statistics were released this week (Image: SIBA) It also said breweries north of the Border “struggled with a closure rate of four, with 129 breweries in Scotland as of the end of September as opposed to 133 at the end of June”.

The SIBA UK Brewery Tracker “reports the figures for each region rather than a list of opened/closed breweries”.

However, an organisation chief checked the recent data and said that Hidden Lane Organic Brewery in Glasgow, Suspect Brewing in Edinburgh, Inner Bay Brewery in Fife and Mad Bush in Aberdeen counted towards the third quarter closures.

READ MORE: 

Neil Walker, of SIBA head of communications, said that “demand for beer from independent breweries has never been higher from consumers, but access to market and profitability are still big challenges for small brewers all across the UK, with high taxation and rising raw ingredients costs squeezing the already fine margins most independent breweries are working with”.

He added: “In short, small breweries need your support so next time you’re in the pub or supermarket opt for an independent beer from a local brewery and help to keep local breweries and pubs alive.”

The cost of ingredients has risenThe cost of ingredients has risen (Image: SIBA) SIBA has measured through its Beerflex system, which supplies guest ales into tied pubs across the UK, an increased demand for independent beer, with throughput per beer tap averaging a 13 per cent increase, the majority of which is cask beer brewed by independent brewers less than 40 miles from the pub.

Mr Walker also said: “The challenge isn’t consumer demand, the challenge is getting small independent breweries access to pubs that are dominated by global brewers.”

The outlook doesn’t appear too good just yet either, with the industry figures seeming to echo a study that showed the number of Scottish firms that are “teetering on the edge” has increased significantly.

Businesses in Scotland, along with many others across UK, saw a rise in early signs of financial distress in the third quarter of 2024 compared with the same period the previous year, according to the latest Red Flag Alert data from Begbies Traynor.

The research, which provides a snapshot of corporate health, reveals that in the third quarter of 2024, there was a 37.2 per cent increase in levels of businesses in Scotland suffering from “significant” financial distress compared with the third quarter last year.

The firm said this type of distress, which refers to deterioration in key financial ratios and indicators including those measuring working capital, contingent liabilities, retained profits and net worth, impacted 31,338 businesses in the country.

In the breakdown, food and beverages showed that one in ten consider themselves on the brink of going bust.