13 January 2023

Irish craft brewers: Rye River sold, Eight Degrees still looking for buyer

Ireland | It may be a cliché that the Irish have a way with words. But it is hard to deny that some do have the gift of the gab. Take the craft brewer Rye River.

Many Irish observers were surprised when Rye River, Ireland’s largest craft brewer in 2021, sold a minority stake (up to 49 percent) to Germany’s brewer Warsteiner in November 2022.

They were not surprised that Rye River was for sale: the brewer from Celbridge, Co Kildare, that rebranded from McGargles in 2021 and brews some 40,000 hl beer, has been in financial straits for years.

They were only surprised that a German brewer bought it. How will the Germans build a business plan around Rye River, they wondered? Guess what, Rye River must have told them how.

Rye River’s financial troubles

Media report that Rye River saw its operating profit decline 81 percent in 2021 to EUR 52,343 (USD 55,000). Revenues grew by just over 6 percent to EUR 7.5 million (USD 8 million).

Accounts filed recently by DP Financial, the entity behind the brewery, show that Rye River’s Irish revenues declined slightly from EUR 4.7 million in 2020 to EUR 4.6 million in 2021. However, the company generated an extra EUR 900,000 in sales throughout the rest of Europe.

After tax, the company incurred a small loss of EUR 28,171. Rye River employed an average of 62 people in 2021, compared with 56 in 2020.

Deal done on a golf course?

The other Irish craft brewer, which was up for sale, has not found a buyer yet. The newspaper Independent.ir reported at the end of October that Irish Distillers (Jameson whiskey), owned by French alcohol giant Pernod Ricard, had approached potentially interested parties about selling its craft brewery Eight Degrees.

Only in 2018 had Irish Distillers bought Eight Degrees from Mitchelstown, Co Cork. It had been founded by Cameron Wallace from Australia and Scott Baigent from New Zealand in 2010. Both left the company in early 2022.

The reason Irish Distillers acquired Eight Degrees in the first place was that it needed beer barrels for its Jameson Caskmates range. Why buy a brewery if you just need beer barrels, observers wondered – unless someone with the gift of the gab was involved? Reports at the time described the purchase of Eight Degrees as a “multimillion-euro deal”.

The Irish Independent newspaper says that Eight Degrees had a revenue of just over EUR 1.7 million (USD 1.8 million) in its 2021 financial year, up 26 percent. EBITDA was EUR 315,000. It forecasts adjusted EBITDA to grow to EUR 343,000 in 2022.

A wild rumour

The third transaction, which was just a rumour, would have required enormous powers of persuasion as it involved the tiny craft brewer Larkin’s, the trading name for the Dublin Lager Company. It said that Larkin’s will be bought by Applegreen, a big chain of petrol stations. This rumour has since been replaced by the speculation that Applegreen is commissioning a range of beers from Larkin's, not buying the company outright.

There are fewer than 80 craft breweries in Ireland.

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