Brewers in Lancaster and York turn to Duff & Phelps administrators

Duff & Phelps has been appointed to oversee the administration of two breweries in the North of England. The firm is seeking buyers as soon as possible for Mitchell’s of Lancaster and York Brewery.

The UK is Europe’s second largest beer producer, with 5.1 billion litres produced, or 13% of the EU’s total alcoholic output. Meanwhile, 2017 saw UK gin sales surpass 50 million bottles for the first time, a haul worth £1.2 billion – double the £600 million the in-vogue elixir wrangled in 2011 – constituting more than a billion gin and tonics. Despite flagging consumer demand in other sectors – thanks to stagnating wages, rising inflation, and Brexit anxieties, among other issues – everyone still seems somehow to always have enough spending power to invest in their own favourite ‘poison’.

While the industry seems to be going from strength to strength, however, it is by no means entirely insulated from the adverse trading conditions afflicting the rest of British business. Recently the collapses of Northern Irish spirits maker Botl Wine and Spirit Merchants and gin-based events franchise GinFestival.com suggested that a bubble which has developed around the drinks sector could be set to burst. That news has now been accompanied by the twin administration of breweries in Lancaster and York, ahead of an uncertain 2019 for both the alcohol industry, and Britain more generally.

Duff & Phelps has been appointed as administrator in both scenarios. The first of these is Mitchell’s of Lancaster. Established in 1871, the brewery currently operates 10 public houses across Lancashire, as well as a head office in Lancaster. The company has remained family-owned over the past 140 years, and before administration, employed around 120 people. As of the appointment of Steven Muncaster and Sarah Bell of Duff & Phelps, 14 staff were made redundant at the head office. Meanwhile, all establishments are continuing to trade while Duff & Phelps seeks a buyer.

Steven Muncaster, a Managing Director, Duff & Phelps, stated, “The UK pub sector has suffered sustained adversity over the last decade, with the latest ONS statistics showing that nearly a quarter of pubs have closed since 2008, with the majority of these closures being small pubs. This troubled landscape… and the continued uncertainty surrounding Brexit has created difficult conditions for pubs across the UK. As such, the owners were left with no alternative but to put the company into administration.”

Muncaster and Bell have also been called upon to serve as joint administrators for York Brewery. The brewery was formed significantly more recently than its Lancaster counterpart, created in 1996 within the historic city walls. The working brewery doubles as a major tourist attraction, and provides customers locally and around the country with the first traditionally brewed ales from within the walls of York for over 40 years. Like Mitchell’s, the brewery also operates four public houses, in addition. These will continue to trade while Duff & Phelps seeks a buyer, and there have been no redundancies among the company’s staff of 49.

Steven Muncaster, Managing Director, Duff & Phelps, stated, “While York Brewery is a popular destination for both locals and tourists, the company has unfortunately continued to face cashflow pressures as a result of difficult conditions which are affecting the leisure industry and pubs across the country. We are seeking a buyer and we encourage any interested parties to come forward as soon as possible.”