Black Hops Brewing Bought By New Owners

May 14, 2024, by James Smith

Black Hops Brewing Bought By New Owners

Black Hops have been bought by a consortium representing a number of existing shareholders and "other supporters of craft beer and independent breweries". The business has been in administration since late March with a decision on the future of the business initially expected tomorrow (Wednesday) at a second meeting of creditors that has now been adjourned.

The Gold Coast-based brewing company brought in administrators from Deloitte, who published a report on May 7 outlining the full extent of the troubles facing the business, including debts to creditors of more than $7 million. This included the revelation that Black Hops could have been trading insolvent for 18 months, from "as early as 1 December 2022". According to the administrators' preliminary analysis, the potential insolvent trading claim may be approximately $3,361,720.

Regarding the period of insolvent trading, the report stated: "A cause of action for trading whilst insolvent may potentially exist against the current and former directors of the Company, however, further investigations are required should a liquidator be appointed to the Company. 

The administrators concluded: "As there is no proposed DOCA [Deed of company arrangement] and we do not recommend the administration ends as the Company is insolvent, we are of the opinion that it would be in the creditors best interests that the Company be wound up."

However, a sale has since been agreed for an undisclosed amount.

In a statement provided to The Crafty Pint, Darren Hill, representing the Black Hops Craft Pty Ltd, said of the new ownership consortium: "We are passionate supporters of craft beer and independent breweries. Most importantly, we believe in the team and the quality of the product, that’s why we’re taking on the Black Hops brand. 

"Independent breweries are an important part of the beer landscape and we genuinely feel Black Hops is a jewel in the crown of the craft beer industry.

"We’re thrilled to stay independent, start a new chapter for Black Hops and look forward to the future."

Tim Heenan, one of the voluntary administrators and Deloitte Turnaround & Restructuring partner, added: "We are pleased to announce the entry into a sale agreement for the Black Hops business.

"The business has been sold to a consortium representing a number of the existing shareholders and other supporters of craft beer and independent breweries.

"This provides certainty for the future of the Black Hops brand.

"Over coming weeks, and in conjunction with the purchaser, we will manage the transition of the business to the new owners, Black Hops Craft Pty Ltd."

 

Inside Black Hops main production brewery in Biggera Waters, BHII.

 

This week's announcement provides a future for what had once been one of the fastest-growing brewing companies in Australia. Founded by Michael McGovern, Eddie Oldfield and Dan Norris (pictured at top of article) in 2014, they moved into their first Gold Coast brewery and taproom in 2016 before adding a far larger production site in Biggera Waters in 2019. Their most recent acquisition, in 2020, saw them take over Semi Pro Brewing in Brisbane, turning that into Black Hops Brisbane.

They claimed Champion Small Australian Brewery at the 2018 Australian International Beer Awards and last year were voted Australia's best brewery for a second year running by the public in the Beer Cartel Australian Craft Beer Survey. They have also been one of Australian craft beer's most significant crowdfunders, using a rewards-based model early on and equity crowdfunding on two separate occasions. In 2019, they raised $400,000 in just six days; in early 2022, they raised $2.2 million in less than 24 hours.

On the occasion of their first crowdfund, the business was valued at more than $18 million; for the second in 2022, this had risen to more than $67 million. The administrators' report from last week show the company's accounts reported an operating profit of $867,223 in FY21 but losses in each subsequent year, including a reported loss of close to $1.5 million in FY22, with revenues also falling over this period.

As recently as November 2023, Black Hops posted job ads for Melbourne and Sydney staff, and in February 2024 shared plans to unveil a new venue in February, which was delayed and then never announced. 

However, as last week's report shows, the business was in significant trouble, owing $3.2 million to Judo Bank, and a similar amount to the ATO, including close to $2 million in excise tax. Unlike some other recent brewing company administrations, this does not relate to delayed COVID payments but to excise debts accrued more recently. In total, there are around 200 creditors, including employee creditors.

Two of the founders are no longer directors of the business: Michael ceased to act as a director in September 2017, Dan in February 2023. The former remained a shareholder.

The sale of Black Hops comes just a week after Melbourne-based Deeds Brewing announced they were to cease operations. And, while writing this article, we have learned that another Melbourne operation, Temple Brewing, is also to close. Last week, Sydney-based Akasha Brewing – another business that had run a successful crowdfunding campaign – announced they were exiting a period of administration with the previous management team still in place.

It continues a trend witnessed throughout the industry over the past two years, one that has accelerated significantly in 2024, and which is certain to dominate the conversation when many from the industry gather for the Australian International Beer Awards in Melbourne on Thursday.


The meeting of creditors, to be held on Wednesday, 15 May 2024, has been adjourned to facilitate the transition of the business to new owners. We'll provide more information on the sale once it becomes available.


Past coverage of issues facing the local beer industry:

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