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Cheers: Black Sheep MD Rob Theakston and chairman Andy Slee toast their York Brewery acquisition

Black Sheep rescues York Brewery from receivership

It's an early Christmas gift from Black Sheep, with the Masham, Yorkshire brewer announcing Friday that it had acquired York Brewery, its brands and its four retail outlets.

The deal comes a week after York, along with parent company Mitchells of Lancaster, had fallen into administration due to “cashflow pressures.” Trading had continued while administrator Duff & Phelps marketed the two businesses separately. 

The purchase price hasn’t been disclosed; York’s combined brewing-retail turnover has been placed at £2.1 million. More than 40 jobs will transfer to Black Sheep Brewery. 

Black Sheep chairman Andy Slee described the acquisition as fitting perfectly with Black Sheep’s strategy of developing its presence in Yorkshire and owning pubs. The four outlets marks the brewer’s first foray into pub ownership. 

“Entering administration was worrying for the team at York Brewery, but our deal offers some comfort that its successful brand can be maintained and the pubs can continue to operate,” said Slee. 

“York Brewery complements our strong brands and by acting quickly we have been able to provide a good outcome for both organisations.” 

MD Rob Theakston noted that Black Sheep will not be coming in with “a big sledgehammer” but rather it’ll be business as usual at York Brewery. 

He added, “We’ll be working hard to bring them into the fold and make sure that they are a success in the future.”

Founded in 1996 York Brewery comprises a 20-barrel brew kit, six traditional open fermenters and five conditioning tanks. Including the pubs - the Last Drop Inn, Mr Foley’s Tap House, the Three Legged Mare and the Yorkshire Terrier - it employs 49 people.

Family-owned Mitchells of Lancaster was founded in 1871 and brewed until 1999, most famously creating Lancaster Bomber ale which was taken on by Thwaites and is now part of the Marston’s portfolio. It acquired York Brewery and its pubs in 2008.

Mitchells’ head office in Lancaster has closed with the loss of 14 staff but its 10 managed pubs, employing a total of 120 people, continue to trade.

“The UK pub sector has suffered sustained adversity over the last decade, with the latest ONS statistics showing nearly a quarter of pubs have closed since 2008, with the majority of these closures being small pubs,” said Duff & Phelps managing director Steven Muncaster.

“This troubled landscape coupled with rising business rates, an increased minimum wage and the continued uncertainty surrounding Brexit has created difficult conditions for pubs across the UK. As such, the owners were left with no alternative but to put the company into administration.”

Founded in 1996, Black Sheep Brewery returned to profitability last year and had set out a growth strategy at its most recent AGM that included an ambition to enter into retail. 

Larry Nelson and Phil Mellows
22nd December 2018

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