Rich City group snaps up indie brewers

A cash-rich London investment company has bought four breweries, closed two of them and aims to go on a spending spree to buy more.

The Breal Group, which has made its fortune from steel and aviation, now owns Black Sheep in Yorkshire and Purity Brewing in Warwickshire and has bought and closed Brick and Brew By Numbers in London.

Breal, which also runs the Vinotec restaurant chain,  branded its brewing arm the Keystone Brewing Group in February and installed Mark Williams as Chief Executive Officer. He is now running Black Sheep following the departure of CEO Charlene Lyons.

The brewery in the Yorkshire Dales was founded in 1992 by Paul Theakston, a member of the famous Masham brewing family. Its beers include Best Bitter, Special Ale and Riggwelter. When Paul retired he handed over to his sons Jo and Rob, with Charlene Lyons as CEO.

Last year the company appointed administrators and reported debts of £6 million. It was bought for £5 million by Breal who are investing £1 million in the site, with new brewing equipment.

Mark Williams is at pains to stress that Black Sheep’s Yorkshire Square fermenters, which give the beers their unique flavour and character, will remain. The new kit will be used mainly to produce the beers for Brew By Numbers and Brick and will include new cask racking and canning lines, with a bottling line to be added later.

“We were hooked on the romance of brewing,” Williams says. “We’re looking at a number of other options to buy more breweries. We aim to grow the brewing side four fold to £100 million by 2028.”

The closure of the London breweries was the result, he says, of them being forced to look for new premises following disputes with their landlords.

“We looked at other possible sites in London but the rents were sky high and we took the decision to open up space at Black Sheep and move brewing there.”

When I suggested London beers brewed in Yorkshire would lose their credibility – their provenance – Mark Williams said they were being sold widely in London restaurants and great care had gone into matching them at Masham. This included treating the brewing “liquor” to replicate the water found in London.

He describes the section of Black Sheep that now houses the plant for Brick and Brew By Numbers as “a little bit of South London in Yorkshire.” The biggest growth is in export, with the beers popular in Scandinavia, Italy, Australia and New Zealand.

Mark Williams denied claims there had been mass redundancies as a result of closing the London plants.

“Eight people were made redundant and a few others left,” he says.

I spoke to Charlene Lyons, former Black Sheep CEO, who said her departure was amicable. “I’d decided to leave before the Breal takeover,” she says. “I wanted to spend more time with my family and look at other job options.”

Others members of staff may not be so fortunate. Jo and Rob Theakston are the managing and sales directors but Mark Williams says they don’t play “a significant role in the brewery”. The Theakston association could be coming to a close.

There have been other casualties. Three of Black Sheep’s pubs – the Last Drop Inn, Tap & Kitchen and Mr Foley’s -- have been closed as, Williams says, “they were chronically loss making and needed significant investment.” The Three-Legged Mare in York has survived along with the bar and restaurant in the visitor centre at Masham.

Purity Brewing had similar problems to Black Sheep as a result of Covid and lockdowns. Breal took over in December and Mark Williams says the brewery will maintain its green credentials of reducing carbon footprints and using a series of reed beds to clean and re-use brewing water. Its beers include Mad Goose and Pure UBU.

There has already been one staff casualty. Brewer Aaron Taubman, originally from the United States, has left after 10 years at Purity to join Woodforde’s Brewery in Norfolk.

Williams says his group is looking at a number of further options as there are many breweries in trouble at the moment.

But he rules out any involvement with Adnams. The Suffolk-based family brewer announced last month it was seeking outside investors to help it reduce debts that have piled up as a result of the pandemic.

Williams describes the Southwold brewery as “part of Suffolk. They’re a success story and they can sort out the road bumps.”

There may also be road bumps for some of the breweries Keystone does buy. Mark Williams says it’s part of the Breal Group’s philosophy to eventually sell off some if its acquisitions when they are working successfully. This suggests some breweries rescued by Keystone could be hived off after a few years.

There’s also a nasty sting in the tail for creditors and investors at Black Sheep. It’s now a private company but before it was bought by Breal it was a public company and had losses of £4 million. Shareholders and creditors are owed money and are extremely angry.

But Mark Williams says they must take that up with the administrators of the old company, not with the new one.

He adds bluntly: “People have to realise that shares can go down as well as up. If you don’t want to take risks with your money, put it in a building society.”

•First published in What’s Brewing, March 2024.