American craft beer industry on the verge of collapse

American craft beer industry on the verge of collapse

The results show a sharp drop in craft beer sales, numerous layoffs or terminations, and the high likelihood of a large number of brewery closures if the current social distance measures are not lifted or rapid government support is not provided for small breweries and the hospitality industry in the broader sense.

It is not surprising that breweries have seen the sharpest falls in draught beer sales, and since most breweries are heavily dependent on sales of their beers in pubs and restaurants, the majority of the 455 breweries that replied to the survey reported a fall in sales of more than 70 per cent.

14% of the breweries believe they can only sustain their business, including running costs, revenues and state and federal subsidies, for up to one month, 46% believe they can survive one to three months, 25% three to six months, 9% expect six months to a year, and only 6% say they can sustain the current situation for more than a year. According to these figures, almost 5,000 of the approximately 8,150 active breweries in the US are likely to go out of business if the freeze lasts for three more months.

In a country like Italy, where the COVID-19 pandemic began earlier, the government began to close down the country on 9 March and extended it only until the beginning of May, which already means that the national quarantine will last two months. So far, the situation in the US appears to be similar to that in Italy and it is likely that the spread of the virus will follow a similar pattern in both countries.

When asked what has already helped breweries in the current situation, 84% of all respondents cited, among other things, pausable loans, 56% emergency grants up to $10,000, 50% disaster loans, 47% increased unemployment provisions and 46% named deferred income tax payments.

When asked what would help most in the future, 83% of respondents asked for more direct grants to breweries and other hospitality companies, 71% asked for permanent recalibration of excise tax, 69% asked for tax credits for spoiled beer, 51% asked for free deferrals of excise tax payments and 50% asked for additional market access in the brewery's home country.

"These results suggest that the CARES Act had value for small breweries, but simply did not go far enough to address the economic challenges they face during their closure," BA concludes its findings.

Source: inside beer (

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