Young's warns of rising costs
YOUNG'S has warned the 'seemingly endless' cost of regulation and red tape is strangling the British brewing industry.
Chairman John Young said breweries are having to cope with new licensing laws, which requires all landlords and pub owners to apply for a new license regardless of whether they wish to stay open for longer.
Increases to the minimum wage have also sent staff costs soaring 7%, while business rates are set to rise this year.
The warning came as the historic brewery unveiled a strong full year performance. In the 53-weeks to 2 April, pre-tax profits were 6% ahead at £9.4m, on the back of sales of £119.5m.
Young said: 'Stalling consumer confidence and ever increasing margin pressures, from rising staff and utility costs, never ending red tape and this year, the added costs from new licensing laws and increases in business rates, are all challenges we will have to face.
'Accordingly, any sales and profit growth achieved this year will be well earned.'
Young's said the Beer Company had a strong year with over 168,000 barrels brewed, the highest number since the early 1980s, while Young's Bitter increased volume by 9.5%. Young's Bitter is now the fourth-largest cask ale in London and the 10th-largest cask ale brand in the UK.
The performance of the business's managed pubs was strong, with turnover up 7% and operating profits increasing by 9.7%, although the company said it was a challenging year because of the 'seemingly endless additional costs of regulation and legislative burdens'.
Earlier this month the Young family gave up their power of veto over corporate decisions as it said it was moving its shares to Aim. The plan needs to be approved at an Emergency General Meeting to be held on 2 June.
The current structure of the shareholding gave the family a powerful voice and has come under fire from activist investor and shareholder Guinness Peat.
Shares were up 12½p in early morning trading to a record high of 1,325p. The company is recommending a final dividend of 12¼p, taking total dividend for the year to 23.65p, up 5.1%.
