Water firm blocks drinks-makers in Suffolk from expanding supply

Small companies in Suffolk that manufacture drinks have been told to keep a lid on their water usage for most of the next decade, amid concerns at their supplier that it will be unable to meet rising demand.

Essex and Suffolk Water has imposed a “moratorium” on new mains-water connections for non-domestic use until 2033 and told small businesses it would be unable to increase their usage above existing levels through their current connections.

In a letter to small companies, seen by the Guardian, the water company told recipients: “You should not plan to increase your mains water use if it is for non-domestic purposes.”

“Without the moratorium we will not have sufficient water to meet all existing and new mains water demand until we have developed the new water supplies.”

Ryan Luke, managing director of the Heart of Suffolk Distillery in Bacton, which received a letter, said: “Water is fundamental to the production of our spirits. We are constantly increasing the number of distillations we carry out … and will be using more water to match our growth.”

The limits could force him to move the company, he said. “We love where we are and have spent a lot of money and time building the distillery up. To relocate would add financial pressures.”

Alan Ridealgh, who runs the Humber Doucy Brewery with his son John, said: “I’m extremely frustrated. We would have to close – if we can’t have more water here, then we will not reach the point of profitability. Or we would need to move.

“We had committed to expansion to put in new vessels to expand our production before we received the letter.

“This has come as a bolt from the blue to us. I completely understand why we need to manage water but this is just ridiculous and there has been no real consultation. They clearly don’t realise how much water small businesses use. To make one pint of beer you need about three and a half pints of water – and the extra water isn’t wasted.”

Nondomestic users – which also include charities and schools – are facing price rises for water of nearly 30% by 2030 , according to the industry regulator, Ofwat. Unlike small firms, large industrial users typically negotiate cheaper rates for using greater volumes.

Tina McKenzie, policy chair at the Federation of Small Businesses, said water companies needed to “accelerate” progress on tackling leaky, “underinvested” infrastructure after a 2019 commitment by water firms to increase supply and decrease demand.

“The water moratorium in Suffolk shows there is still a long way to go before achieving that. Water efficiency can be improved without preventing small firms from growing,” she said.

Kieran Ingram, water director for Essex and Suffolk Water, apologised to businesses and said the decision had not been taken lightly.

The company is part of Northumbrian Water, owned by the US private equity giant KKR and investment firms controlled by the Hong Kong billionaire Li Ka-shing. In the most recent financial year, Northumbrian paid out £108m in dividends and proposed a further £37m payout.

Related: Small firms face near-30% rise in water bills, Ofwat letter reveals

The Environment Agency has classed Suffolk as “water stressed” and the company has agreed to curb the amount of groundwater it abstracts.

Ingram said: “While we sympathise with affected businesses, we are forecasting business demand for water to double in our Hartismere area, which covers Eye and surrounding villages. We have to protect water supplies to our existing customers, especially to household customers who we have an absolute legal requirement to supply.”

He said improvements were being made to install new pipelines and boost water supplies. “While we still have more work to do, we are definitely improving the amount of water lost to leakage and our operation teams work tirelessly attending reported bursts to fix them as soon as possible.”