Soaring bills leave Maxim Brewery facing losses as cost of producing iconic Sunderland brands Double Maxim and Samson spirals
The boss of the brewery behind Sunderland’s iconic Double Maxim and Samson brands has urged the Government to freeze beer duty amid concerns over massive energy cost rises.
Maxim Brewery MD Mark Anderson says the firm is okay for this year, but is worried about even sharper rises in the cost of energy and ingredients next year
The brewery normally expects to make around £20,000 annual profit. However, yearly electricity bills are expected to leap from £18,000 to £54,000 with malt costs predicted to rise from £65,000 to £100,000, leading to losses.
The Rainton Bridge brewery, founded in 2006, employs seven people and provides for numerous outlets, including the Stadium of Light.
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Hospitality was particularly badly hit by Covid-19. Now, with energy costs expected to soar by as much as 300%, the British Beer and Pub Association has warned the crisis could cause “real and serious irreversible” damage to the industry. Stories of pubs forced to close have made national headlines in recent weeks.
Mr Anderson echoed the concerns. As well as a beer duty freeze, he wants an energy price cap for businesses as there is for domestic users.
He said: “We’ve got gas at fixed cost, but the electric’s going to be a bit of a pain, to say the least.
“We don’t know where it’s going to end. We’ve already had a price increase this year and to get price increases through to the pubs is going to be even harder for them. We’re doing our best to support the pub trade.
“Everybody’s in the same boat. The only way businesses can continue is to pass on price increases; but that means people drink and go out less. We’re concerned. We’re okay as a brewery this year. We’ve got contracts for malt and other things in place.
“The energy cost is painful, but we can probably live with that this year.
“But we’ve been told that next year that malt, the basic raw ingredient for beer, will go up 50%. That’s partly caused by the war in Ukraine, but mainly by energy costs to the farmer.
“We’re also faced with a potential duty increase next year.
“Brewers are energy-intensive businesses. They need help. Any beer duty increase should just be cancelled. Our duty is already eight times more than in France.”