Last year saw the purchase of Gipsy Hill by Sunrise Alliance Beverages – a move which was aimed at securing the south London brewery’s future as the sector continues to face headwinds.
As part of this move, the business had hoped to be able to continue brewing all of its beers indefinitely in Gipsy Hill - even signing leases to the end of 2027.
However, this month the business received the “devastating news" from its landlord that its next rent increase will be double digits - again.
“The resulting £/sq ft rate will be an eye-watering 430% higher than the rate we started on 12 years ago. Throughout our tenancy at Hamilton Rd, rent increases have been both continuous and sharp in nature,” co-founder Charlie Shaw said.
Despite a 19% year-on-year increase in sales this year of its flagship IPA Hepcat, Shaw says “no amount of growth or improved efficiency” can offset its escalating overheads.
He added: “We have never and will never make changes that compromise the quality of our beers. Whether that’s slashing tank time or changing recipes. Quality remains the bedrock of our business and our brand.”
The acquisition by Sunrise means the business is able to move the majority of its brewing to one of its sites – Curious Brewery based in Kent.
Shaw has advised this transition will happen once beers produced there “match the same exacting standards they do at Hamilton Rd”.
The co-founder said the plan is to continue to make beer at Gipsy Hill for many years: “We will be investing in the equipment required to revive our specials program and continue our R&D and innovation work.
“It is the leases of the large warehouses that we can no longer justify. We are investing heavily in our tap room and we are extending that space into the neighbouring unit.”
The majority of Gipsy Hill’s production team will be offered roles elsewhere in the company and will be given relocation expenses where necessary.
“I was proud that we were able to tell all employees that we would protect the value they had accrued via the employee ownership scheme that myself and Sam launched back in 2021,” Shaw added.
He concluded: “We hope that you will continue to judge us on the quality of the beers we produce and the service we provide. We will not waver in our commitment to both. The commercial viability of having a large or even midsized brewery with a London postcode has been brought sharply into question in recent times. Those times have caught up with Gipsy Hill, but we have an opportunity to make this business work, an opportunity that we will go after with everything we have.”
