Deeds Brewing have become the latest brewery to enter voluntary administration, with the Melbourne brewery appointing Deloitte Financial Advisory as administrators yesterday.
Cofounder Pat Alé told The Crafty Pint that Deloitte are currently reviewing the business while he and fellow founder Dave Milstein continue at the helm, with the taproom remaining open, production continuing and the business operating as usual.
Pat says the decision was in large part due to an Australian Taxation Office (ATO) debt accrued during COVID.
“That just puts a huge amount of pressure on the business’s cash flow,” Pat says, adding that they had tried to negotiate longer payment terms with the ATO but been unable to come to an agreement.
He said they'd also been impacted by a need to pull a significant amount of beer from sale more than a year ago following an issue with contaminated malt which impacted the flavour of their beer. Since then, Pat says they’d spent a lot of time working with their insurer to recover the loss.
“It seemed to be progressing in the right direction and then, on Tuesday, they rejected that claim,” Pat says.
“We’ve got a massive cash flow hole as a result of that issue that we’ve been carrying and, coupled with the ATO, it’s made it really challenging in an already difficult market.”
The combined impact of legacy ATO debt, declining consumer confidence and spiraling operating costs for breweries are issues we explored recently as both Hawkers Beer and Big Shed Brewing entered administration in the same week. Such administrations have become a frequent occurrence in Australia over the past 18 months or so; in Western Australia, Golden West also appointed administrators at the tail-end of February, with the founders leaving the business.
At Deeds, Pat and Dave say they had worked closely together and tirelessly to find a way forward as a business in the hope they wouldn’t end up going down this path.
“Dave and I feel terrible about it," Pat says. "We’ve been in business for 20 years and never gone through this; we’ve always paid our bills and pride ourselves in having really good relationships with all our suppliers. It’s not something we thought the business would ever have to do and there’s been a lot of sleepless nights on this side.
“We didn’t want to go through this at all; it’s just got to the point where we’ve had to pull the trigger. The plan is to come out the other side and be in a much better position."
Deeds’ beers first appeared in 2012 as Quiet Deeds after Pat and Dave had already spent many years distributing drinks under the Red Island banner. Their quest to build a brewery and taproom was one of Australia's longest, following a drawn-out search and extended application process. Their dream became fully realised midway through 2021 when they opened one of Melbourne’s most distinctive brewery venues in the inner south-east suburb of Glen Iris - an area that had historically been one of Melbourne's "dry surburbs".
Last year, they took out the Australian International Beer Awards Champion Medium Brewery and Champion Victorian Brewery trophies, while they’ve also made a recent move into distilling under the name Future Proof.
Pat says that, upon entering administration yesterday, they spent much of the day working through it with their tight-knit team.
“It’s a nerve-wracking process in a lot of ways that Dave and I have never been through - and neither have our staff," he says. "Our major focus yesterday was getting staff together to help them understand what was going on and to try and relieve any stress.”
The first meeting of creditors is to be held on March 25.
The administrators are inviting inquiries regarding the sale and/or recapitalisation of the Deeds Brewing Group of Companies. Those interested are requested to email deedsbrewing@deloitte.com.au to register their interest.
Will Ziebell is a history graduate who knows more about The Wire than he does about beer. He was awarded the AIBA Best Media trophy for 2018; HBO have told him to please send his fan mail elsewhere. He can be found on Instagram, Twitter and TikTok.
The beer(s) or moment(s) that turned you on to good beer:
Spending time living in the UK (and backpacking across Europe) when I was 21 certainly gave me a better understanding of the beer and different styles of the world. But I'd say it was a holiday to the High Country a little while later when lunch and a tasting paddle at Bridge Road Brewers created an obsession with Australian breweries and locally made beer.
You've got three beers to turn someone else on to good beer; what are they and why?
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Boatrocker's Miss Pinky: It's a raspberry-packed Berliner Weisse that neither looks or tastes the way many people conceive of beer.
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Bad Shepherd Hazelnut Brown: A luscious mix of chocolate and hazelnut that can appeal to the sweet tooth within us all.
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Stone & Wood Pacific Ale: As the father of my oldest friend once said to me: "It's the perfect refreshing pint that smells like they've loaded it with the God's herb."
The last beer you enjoyed:
Garage Project's DFA while sitting at the bar at Miss Moses as the sounds of The Rolling Stone drifting in the background.
Three things that represent you:
- Bruce Springsteen
- Ken Burns
- The State Library of Victoria
