UK brewery stockpiles malt to beat price squeeze

STORY: At the Milton Brewery in eastern England, Richard Naisby's warehouse is full of sacks of malt - a key ingredient for his traditional cask beers.

He mostly used to order the grain when he needed it.

But now he is stockpiling - buying three to four months of supply in advance to try to stave off the impact of soaring prices.

"Well, malt has gone up 40 to 50%, energy costs were were not on a fixed rate would have more than doubled, we have enormous increases in business rates slated for April and after all of that, if we manage somehow to make a profit, we've got a 30% increase in corporation tax coming our way."

Small businesses like this one in Britain are being hammered by rising costs which they're reluctant to pass onto cash-strapped consumers.

Inflation is hovering at over 10%, close to 40-year highs.

And gas and electricity prices were up 130% and 65% respectively in the year to December, the statistics office says.

It's left many small businesses fighting for survival.

Naisby said he had saved himself about £2,000 - around $2,480 - by buying as much malt as he could fit in before a supplier hiked prices in January.

The 50% rise for some malt types this year came on top of a 20% increase last year.

He's upped his prices by 7% over the past year, but like many smaller companies, finds himself squeezed in the middle.

"I think the big pub chains are possibly able to negotiate supplier deals that we can't at our scale manage but it's something that we've got to deal with. We are small enough that we are able to roll with the punches a little bit and adapt in the way that maybe a mega corp may find more difficult."

The new battle against mounting costs comes after the COVID lockdowns brought many small firms to their knees.

During the pandemic, the government provided support through a mix of grants, loans, and temporary tax cuts.

Following the jump in energy prices, it set up a scheme to help with utility bills which runs to the end of March. But price rises are still punishing.

Nor have UK households been spared. Finances have been squeezed with food and drink prices rising at the fastest pace since the 1970s.

There was a hopeful message delivered by Bank of England Governor Andrew Bailey this month, who said there were signs that inflation might be starting to turn a corner.

But for many small business owners like Richard, it feels like too little too late.