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Increased survivability among cultured individuals is a core tenet of hatchery-based fisheries enhancement, but frequently results in released juvenile cohorts showing lower genetic diversity than natural equivalents. This effect is exacerbated where certain sibling cohorts dominate survival within communal culture, and a failure to manage ensuing impacts has resulted in severe losses of genetic diversity in wild stocks undergoing hatchery enhancement, undermining sustainability goals. Hatcheries supporting European lobster fisheries are growing in number, despite lacking knowledge of the impact of released juveniles upon the genetic diversity of targeted populations. To address this, we used 91 SNP loci to assign parentage for 99.6% of 3541 juvenile lobsters to 60 broodstock females, across 56 communal culture batches initiated with equal maternal representation. We detected frequent and extensive deviations from expected sibling cohort survival, and found that maternal size and identity contribute to offspring size and survivability. We tested a strategy to mitigate maternal effects on offspring survival skews, and estimate that size-matching mothers should reduce the frequency of severe pairwise skews by 22.1% and 52.4% compared to mothers exhibiting 20- and 40-mm CL size-disparity, respectively. Despite intergenerational decreases in genetic diversity being minor or absent by most metrics, the observed variability in sibling cohort survival created a clear bottlenecking effect, with estimated effective population size ( N e ) of hatchery juveniles only half that of mothers (broodstock N e = 32.6, 95% CIs = 26.2–41.2; mean juveniles N e = 17.0, 95% CIs = 12.8–22.7). Although a survey of 602 lobsters from five wild fisheries revealed no signatures of bottlenecking or elevated relatedness within two hatchery release areas compared to control sites, we postulate that low stocking densities have buffered impacts to date. However, our results suggest that any significant upscaling of releases could threaten the genetic diversity of wild stocks unless it is delivered alongside improved culture protocols which limit survivability biases, and long-term N e monitoring. • Parentage assigned for 3528 communally-reared hatchery European lobster juveniles. • Frequent and extensive bias detected in survival of mixed sibling cohorts. • Size and identity of 60 broodstock drive variation in offspring survival and growth. • Survival bias induces genetic bottlenecking in hatchery releases, slashing effective population size. • Fisheries supplemented by long-term releases show no clear signatures of impacts to population genetic diversity.