Struggling breweries face another obstacle: Further water charges increase burden on industry
Struggling Irish Breweries Face Financial Strain from Water Charge Increases
Small independent breweries in Ireland are facing significant financial strain due to a recent increase in commercial water charges, according to industry representatives. The Commission for the Regulation of Utilities (CRU) made the decision to increase water charges, which has been described as unsustainable by some brewers.
The increase in water charges is a symptom of the struggles the industry is facing generally. Libby Carton, one half of Kinnegar Brewing and the chair of the Independent Craft Brewers of Ireland (ICBI), stated that water is a major input cost in brewing, and the recent 9.8% hike in non-domestic water tariffs is placing a disproportionate burden on smaller breweries.
For example, one brewery reported a €70,000 increase in water charges from 2024 to 2025 despite efforts to reduce water consumption. In addition to water costs, independent breweries also face increased legislative burdens, including the Deposit Return Scheme (DRS) for cans and plastic bottles, which adds further operational costs.
These legislative and regulatory challenges compound cost pressures on smaller brewers, unlike larger breweries that may better absorb such expenses due to scale and resources. Competition with larger breweries is intensified by these burdens and costs. Larger players typically have more dedicated regulatory and compliance teams enabling them to better manage and distribute costs arising from complex regulations.
This disparity can lead to market consolidation, with smaller independent breweries struggling to compete effectively on price and regulatory compliance. The commercial water charge increases amplify the financial burden on independent breweries, which combined with legislative challenges and competitive pressures from larger breweries, is driving some smaller breweries out of business and reducing the sector's diversity in Ireland.
The closure of breweries such as Killarney Brewing and Distilling (KBD) and Roscommon's Black Donkey brewery after 11 years in business is a concern for the industry. KBD's closure left the surrounding community without an important employer and tourist attraction. The impact of tariffs hasn't been felt as hard in beer as it was in the whiskey industry due to the beer sector experiencing its peak sales to the US around St Patrick's Day in March - just before Donald Trump's April 2nd Liberation Day tariffs announcement.
Despite the stark increases in cost, some independent breweries such as Kinnegar did not pass on the increases to the consumer and had to "eat" the increased costs in its margins. The Carlow Brewing Company was severely impacted by lockdowns in some of its key export markets, but was "much stronger in retail" domestically. Costs had risen so much that shipping a low-margin product such as beer "just wasn't economical" for O'Hara's.
In some cases, bottling was moved to other countries where energy and energy costs were shooting up. Most of the glass bottle manufacturers used by Irish breweries were based in Russia, but with the Russian invasion of Ukraine and the ensuing sanctions, brewers were an unlikely victim of circumstance. Despite these challenges, some breweries such as the Carlow Brewing Company have focused primarily on exports to France, Italy, Spain, Germany, and Canada, with Irish sales accounting for about a third of its production.
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