Margins are thin. Confidence is low. And the cost of a pint keeps climbing. 

Pubs and brewers across the UK have shown resilience in recent years, navigating rising costs that now remain structurally embedded and cautious consumer demand. However, fresh cost pressures – driven by policy interventions – are constraining the sector, with smaller and mid-sized businesses particularly exposed.

Our recent report for the British Beer and Pub Association (BBPA) builds on our previous analysis from 2023, examining the economic landscape now facing pubs and brewers in early 2025.

While some acute shocks - such as energy price spikes - have eased, our new report shows that businesses are now grappling with higher operating costs.

Furthermore, any relief from previous cost pressures is being offset by rising labour costs – including increases to the National Living Wage, National Minimum Wage, and National Insurance contributions – and new packaging-related costs linked to PRNs and the rollout of Extended Producer Responsibility (EPR).

At the same time, regulatory burdens such as EPR and the forthcoming Deposit Return Scheme are creating added uncertainty. Many businesses remain unclear on the full financial and operational implications of these schemes, and as a result, are holding off on growth and investment plans.

Consumer spending remains fragile, with over 40% of people reporting they go out less than a year ago. For a sector already hit hard by the pandemic, this combination of weak demand, rising costs, and regulatory uncertainty is squeezing already thin margins and delaying much-needed investment.

Visit the BBPA website and get the full story in our latest report Impact of recent economic trends on pubs and breweries.