Britain’s oldest brewery mulls future as cost pressures bite

Shepherd Neame, the family-run brewery behind Britain's oldest brewery, is considering its future as it grapples with rising costs and declining sales. Founded in 1698 in Faversham, Kent, the company produces popular British beers like Spitfire, Bishop’s Finger, and Whitstable Bay. The brewery's chief executive, Jonathan Neame, announced that the company has initiated a strategic review to find a way forward.

The review aims to address three key challenges: higher logistics costs, declining sales volume, and the need to modernize and invest in the plant.

Neame emphasized that Shepherd Neame is not alone in facing these issues, as other breweries in the sector are also experiencing a squeeze in profitability. The company has been struggling with declining beer volumes for three consecutive years, as consumers shift away from traditional cask ales towards modern lagers, stouts, and alternative alcoholic drinks.

This trend has resulted in a 4.6% drop in beer volumes and a 1.1% decrease in revenue to £42.8 million for the year ending June, while pre-tax profit fell by 43% to £3.6 million due to impairment charges.

Despite the challenges, Neame highlighted that the company's London sites have been the standout performers, demonstrating resilience amid the cost of living pressures. He also noted that pub-going remains a significant part of British social culture, with people still seeking a "third place" for socializing after work, on Sunday lunch, or Friday nights.

Should Shepherd Neame decide to abandon its brewing operations, it would join a list of other pub groups that have divested themselves of beer-making to focus on property and hospitality businesses. London-based breweries Young’s and Fuller’s have already exited the brewing business in recent years. However, several family-run British pub groups, such as Hall & Woodhouse, McMullen’s, and Timothy Taylor's, continue to own and operate their own breweries.