National Beer Day 15th of June

Microbrewing in the UK

Today making beer has become a pastime, with many people brewing at home and making their dream of starting a microbrewery a reality. Interestingly, there has never been a better time to start a microbrewing business in the UK. An estimated 2,274 breweries are currently operating—1,978 of these are considered microbreweries. Indeed, the UK boasts some of the finest beers and ales in the world. A key element which distinguishes the UK as one of the best countries for beer is its access to international markets. Thanks to Britain’s heritage as the creator of IPA-style beers, the explosion of craft beer brewing in the States has been a welcome boon for UK brewers. Britain has capitalised on the growth of the global craft beer market, which continues to be a leading light both domestically and overseas.

Starting a microbrewery in the UK

When it comes to finding, one of the best options is a micro business loan. First, you will need capital to start proceedings, and the most logical first step would be the alternative finance market. In the UK, there’s no one type of loan. From large corporations to solo entrepreneurs, every business needs something different. Micro-businesses run by a single person account for over 90% of UK businesses. So how do they get money to start their business?

Funding a microbrewery

Securing funding is a crucial first step. It’s not cheap to set up a microbrewery, but you can make it work with the right loan at affordable interest rates. You can start small by setting up a nano-brewery. If you decide to set up a microbrewery later, you could start with a 600 pints plant as part of a brewpub—a pub or restaurant that brews its beer for sale on the premises. In the United Kingdom, brewpubs brewing up to 5,000 hectolitres a year (about 880,000 pints) pay just half the ordinary beer duty rates. This might be a good option for starting. At this point, you will not need the highest quality brew kit until you reach a critical mass of loyal customers—your mam doesn’t count.

What type of brewing kit for your microbrewery?

Reliability, quality and technical support for your brewery will be expensive, but you get what you pay for. There will be other setup costs such as the fit-out of your premises, the cost of casks and other incidental brewing and business equipment. Suppose you do not have a route to market through an existing pub or off-license. In that case, you will need to consider financing a larger brewing plant to make the brewery economically viable. Experts in microbrewing suggest a size of 10 bbl—beer barrels—for craft breweries to produce an economically feasible amount of cask-conditioned beer to make a profit. 

Scale matters in microbrewing

Bigger is mostly better when it comes to starting a microbrewery. The reason being is that it allows you more significant economies of scale. However, this extra brewing capacity comes at a cost. Once you have the essential brewery equipment in place, you will need to make sure that you protect it from theft or damage along with your valuable inventory by getting specialist microbrewery insurance. Vital to your finances is that you understand the taxes on the production of beer, and essential reading in this regard is the Excise Notice 226 Beer Duty.

How do I get started?

Whether you are a sole trader, a partnership, a limited company, or a start-up - there are many kinds of finance available, with a lender to suit every business need for any viable business or business idea. 

Discovering the best finance options with the most competitive rates and the ideal lender can be time-consuming and complicated. However, through our award-winning, innovative and data-driven platform, Funding Cloud™, we can offer speed and certainty for SMEs through a real-time, centralised and two-sided marketplace delivering instant decisions and firm offers from lenders. 

Register free today with Funding Cloud™ and connect your business to lenders and partners to facilitate fast, accurate, secure funding at scale.