Brothers Beer put into voluntary administration

Tuesday, 8 August 2023

Brothers Beer portfolio included venues at Onehunga Mall, City Works Depot and Orakei Bay Village.

Auckland’s Brothers Beer has been placed into voluntary administration citing Covid-19 lockdowns as significantly impacting its financial position.

PwC voluntary administrator Stephen White said the craft brewery and wholesale business that operated seven hospitality venues had grown quickly, expanding from one hospitality outlet to six prior to Covid-19 disruption and a seventh opening soon after.

White said he would explore whether a restructure would stabilise the group’s financial position and reposition the business to be sustainable into the future.

“Having been operating for more than 10 years, the Brothers Beer brand is well-established and well-regarded in the sector, so we’re hopeful this can be achieved. However, it is likely that a number of the hospitality outlets will unfortunately have to close,” White said.

Brothers Beer employed 70 staff and operated venues in City Works Depot, Onehunga Mall and Orakei Bay Village, among others. It also supplied to liquor stores and supermarkets.

White said the group’s wholesale distribution would continue through the administration process, and its Mount Eden and Piha venues would remain open.

“We hope to be in a position to present a credible restructure proposal for creditors to vote on at a watershed meeting within the next month. The objective will be to deliver a better outcome for them than if the Group is simply liquidated.”

Brothers Beer is the latest craft beer brewer to hit financial difficulties as sector struggles to meet steep increases to supply and operating costs.

Beer expert Luke Robertson, and owner of Westport brewer Shortjaw, said the market was significantly challenged and the most challenging it had been in the past 15 years to be making beer.

Cassels & Sons Brewing head brewer Simon Bretherton speaks to Stuff about small brewing in New Zealand.

“Everyone is feeling it and it’s not only in New Zealand.”

The craft beer industry experienced sustained growth over the past 10 years but rising ingredient and regulatory costs, coupled with disruption from the Covid-19 pandemic and reduced consumer spending had stunted sales.

Robertson said this downturn was the first rough patch the beer industry had seen since 2010 and he expected more craft beer brewers to topple.

“There is a lot of competition and the big guys; Lion, Asahi and DB Breweries, have managed to position themselves to make sure they have got a good portfolio of brands to cover what people are using, and they can use their market clout to dominate taps around the country and supermarket shelves.

“When people are earning a little bit less and costs are going up they are looking for something that is slightly cheaper they will buy that over one of the smaller brewery that might be a little bit more expensive,” he said.

Luke Robertson, owner of Westport craft brewer Shortjaw, says the beer market is experiencing a downturn.

“The market will survive, but I think there will be a handful of other small brewers [that go under] over the next few months for sure.”

Brothers Beer was started by mates Anthony Browne and brewer Andy Larsen in Auckland in 2012. The business grew quickly, and a few years later outgrew its small brewery and opened up Juke Joint, a 52,000 L brewery in Mt Eden.

Last month Epic Brewing Company was placed into liquidation by a special resolution of shareholders and closed its Onehunga taproom.