Adnams chair says last year was ‘at least’ as hard as Covid-19 for the brewer after Ukraine war, strikes and soaring inflation slowed recovery
- Southwold-based brewer Adnams celebrated its 150th anniversary last year
- Jonathan Adnams said the firm’s trading was strong in the early part of 2022
- From Autumn, demand was affected by the mini-budget and railway strikes
Last year was ‘at least as challenging’ as having to endure the pandemic for Adnmans brewery, the group’s chairman has said.
Dr Jonathan Adnams said the brewer’s trading was strong in early 2022 following two difficult years, but had then suffered from rising interest rates, soaring inflation and industrial unrest.
Consumer confidence has taken a hit from three-decade inflation, which was measured in the double digits until recently, forcing the Bank of England to hike interest rates against a backdrop of soaring commodity and energy prices.
More hard times: The chairman of Adnams has admitted that last year was ‘at least as challenging’ for the brewer and pub operator as the Covid-19 pandemic
Dr Adnams also pinned blame for weakened sales on ‘instability brought about by the autumn mini-budget, rising interest rates and industrial unrest’, which has left consumer confidence levels ‘at their lowest for decades’.
Turnover at the Suffolk-based company increased by £7million to £64.2million in 2022, a weaker improvement than hoped given lockdown restrictions were in place on its venues for much of the previous year.
Losses narrowed by just £114,000 to £1.5million, due partly to the firm’s cost base climbing by £4.9million during the final nine months of the period because of rising prices of goods like barley, a primary beer ingredient.
The firm has decided not to reward a final dividend to shareholders, having handed them an interim payout in February last year after experiencing bumper trading during the summer of 2021 and early 2022.
Dr Adnams said: ‘It is no overstatement to suggest that, for the company and the wider brewing and hospitality sector, the business environment has been at least as challenging as during the Covid-19 pandemic.
‘The business has worked extremely hard during the year to mitigate inflation, control expenses, manage cash flows and serve customers well. However, it has had no alternative other than to pass most of the increased costs through to customers. ‘
On the trading environment ahead, he warned: ‘The outside world remains uncertain and volatile. Early in the year, we had looked forward to our markets returning to normal post-pandemic.
‘The start to the year promised this, then global events transpired and has led to the UK and the rest of the world facing many challenges from economic, social and environmental perspectives.’
However, the group still enjoyed healthy demand over the summer thanks to the warm weather and the continuing pandemic-induced trend for domestic holidays among Britons.
Sales of its low and non-alcoholic beer also grew significantly, with the Ghost Ship 0.5 per cent beer particularly popular among customers.
Last year was the 150th anniversary of the company’s founding by brothers George and Ernest Adnams following their purchase of the Sole Bay Brewery in Southwold, although beer has been made since the 1340s on the site where Adnams is based.
Jonathan Adnams is the fourth generation of his family to head the business, which he has run since 2006, having worked for the brewer since he was 19 years old.
Regarding the future, Mr Adnams said the firm would maintain its long-term strategy of ‘building a premium beer, spirits and hospitality brand that attracts and grows its loyal customer base.
‘We do this by continuing to invest in the fabric of our hotels, pubs, shops and online businesses, by exceeding customers, expectations in terms of service and product quality, and by using our data to better target offers towards customers to reward their loyalty.’