North Yorkshire brewery Black Sheep faces an uncertain future, with it announcing a ‘strategic review’ of its operations.

The Masham-based Brewery, which also operates pubs including the Last Drop Inn and Three Legged Mare in York, may have to merge or even be sold as it looks at the funding options available.

The strategic review follows tough times for the brewing industry, fuelled by the pandemic-related lockdowns, which in turn caused a cost-of-living crisis, hitting brewers extra hard, as the cost of fuel and other ingredients rocketed.

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The independent brewer has cited the “after-effects of Covid-19” on pubs and its impacts on consumer spending in its announcement.

The Black Sheep Brewery is famous for beers such as Riggwelter and Black Sheep Ale and has also started making cider.

The company, founded in 1992, has appointed global consultancy firm Teneo as its financial advisor.

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A statement said: “The Company has plans to take the business forward with the further development of its core beers and new products to build on its strong brand in Yorkshire, the North and nationally. The Company is currently experiencing good sales volumes of its beers, however there remains a significant constraint on funding in light of the prevailing economic conditions.”

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Black Sheep Chair and CEO Charlene Lyons said the brewery reported good Easter trade but the review would secure the best outcome for its shareholders and other stakeholders.

She added: “The Brewery has exciting and ambitious plans for the future and interesting projects in the pipeline. Forward funding is an issue for many businesses in the tight market brought about by the after-effects of Covid-19 on the hospitality sector and this is exacerbated by the cost of-living issues affecting consumer spending. We are confident that the wider investment market will see the opportunities presented by this well-established and highly regarded brand.”

The Black Sheep Brewery was set up in 1992 by Paul Theakston after his family business T&R Theakston was bought out by a larger brewer. Theakston Brewery later returned to family control following a buy-back from Simon Theakston and his brothers in 2003.

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The name stemmed from Paul calling himself the Black Sheep of the family, which saw him leave the family business and create his own brewery in Masham, the same town where Theakston's have brewed for 200 years.

In December 2018, the Black Sheep Brewery announced the purchase of York Brewery, saving 40 jobs, including those at its several city pubs, that were transferred to the business.

The buy-out followed York Brewery announcing earlier that month that it and its parent company, Mitchell’s of Lancaster, had gone into administration.

Bad Seed Brewery, Malton, to close

Earlier this year, Malton-based Bad Seed Brewery announced it was closing after ten years of trading.

It cited the Covid pandemic, cost-of-living crisis, in addition to “societal and market changes”, as the reasons behind the closure.