Valhalla Brewing, the Geelong-based brewing company that opened their brewery and taproom in the Federal Mills precinct last year, has become the latest indie operation to enter voluntary administration.
Owner Scott Hunt said they appointed Worrells as administrators on Monday, citing a significant drop off in patronage at their two venues as the main cause of their financial struggles. He told The Crafty Pint that takings at their original Geelong CBD venue in Union Street are down around 50 percent compared to a year ago, with visitation to the Federal Mills taproom well short of the figures they'd expected when they signed the lease and set out to build the brewery in North Geelong.
He believes the downturn is related to the legacy of the lockdown era, with many people spending more time working from home, as well as the ongoing cost-of-living crisis, but is hopeful the administrators will be able to find a solution in which he and his family are able to remain part of the business. Other issues commonly cited by brewers entering VA over the past couple of years, most notably excise tax debts to the ATO, are not a factor with Valhalla, he says.
"We'll be looking for a buyer or recapitalisation," Scott says. "Hopefully, we can find a way out.
"It's mainly the drop in numbers on the hospitality side of the business. Our business model is very much based around hospitality."
While he says they've felt the impact of less workers coming to the city at their Union Street venue, they've experienced a similar issue at the North Geelong site too.
"It's a broader issue with a lot of offices and businesses out there," Scott says. "We banked on them coming in for a drink after work, especially on Fridays, but it's just not happening.
"It's partly cost-of-living pressures too, with people cutting back on their spending, like across the broader industry, but also that legacy of lockdowns."
He says recent weeks have "been one of the most stressful periods of my life and will be going forward", adding: "We're still staying hopeful and positive that something good will come from this."
Valhalla Brewing launched their first beer, Obsidian Black Ale, in 2016, initially operating as a brand without a home before opening the Union Street venue. Obsidian later won Best Porter at the 2021 Australian International Beer Awards – the same year Valhalla were named Champion Australian Gypsy Brewer.
They have run two crowdfunding campaigns over the years: the first with Birchal in 2022 raised more than $422,000; the second, earlier this year, raised $102,000 via OnMarket. However, Scott says neither hit the targets they'd been hoping to achieve.
"The original crowdfund a few years ago didn't reach the numbers we wanted and we had a blowout of costs to open the brewery," Scott says, adding that the second one "didn't raise near the funds we hoped to.
"Many of the other crowdfunds in the industry are struggling to raise funds. People are very cautious about our industry, and with good reason."
Valhalla isn't the first brewery in the Geelong region to enter VA this year. Sou'West Brewery in Torquay brought in administrators in May, and has since been acquired by Great Ocean Road Brewing. Also in recent months, Scott has closed down his other beer businesses: distributor Lotus Beer Collective announced it was ceasing operations in May, with home delivery business Hops To Home following earlier this month.
"We've all been hoping [the economy] would turn," Scott says, "and that interest rates would drop, but now people are talking about them going up again so it's another 12 or 18 months until it turns around now."
As for potential outcomes, he adds: "We're still hopeful something will come up and the administrators find a way through this. We would love to stay in control of the business – that's our best scenario: find a way to recapitalise and stay in control of the business and the brand we've built over the last eight years and are extremely proud of. Then our investors keep their ownership of the business and we look after them as well.
"That's one of the hardest things to accept: that we might come out of this without that outcome."
We recently examined the spate of voluntary administrations in the local beer industry in a two-part mini-series, and also attempted to make sense of the shifting landscape across Australia in this article on the start of the new financial year.
James Smith launched The Crafty Pint in 2010, two years after moving to Australia from the UK. He was taken to Mountain Goat within weeks of landing in Melbourne, joined their indoor cricket team, and is still navigating the rabbit hole that is craft beer to this day.
The beers that turned you on to good beer:
- Watching pints of McEwan's 80 Shilling settle when visiting family in Edinburgh.
- Pints of flat Bass from the jug at the Cap & Stocking in Kegworth.
- A first Paulaner Hefeweizen when working in Munich in 1998: “This smells of bananas!”
- Castle Rock Harvest Pale – how could a 3.8 percent ABV beer be so good? (It turns out it was an early example of the three Cs – Cascade, Centennial and Columbus – in an English bitter).
- Dogfish Head 90 Minute IPA poured through hops at the Sunset Grill in Cambridge, MA, in the company of a man who turned out to be the Beer Nut (while we were both covering a double murder case at the time).
- Ordering a Mountain Goat Hightail on my first day as an Aussie resident as it was local and I’d never heard of it; “A dark Australian beer; well I never…”
- Murray’s Icon 2IPA at Beer DeLuxe Fed Square, recommended by a guy I’d not long known who's now the main man at Fixation, served by Mik Halse, now head of sales at Hawkers. How could an Australian beer smell as good as that?!?
You've got three beers to turn someone else on to good beer; what are they and why?
- Any really good, fresh and balanced West Coast style IPA. Punchy hop aromatics are the most obvious way to capture someone's attention and these IPAs, done well, present the key components in beer (if you're sticking to just water, malt, hops and yeast) in harmony yet with the volume turned up.
- Saison Dupont. Arguably a selfish choice here as I bloody love the broad saison style and dearly hope it will finally take hold in Australia one day. Given a choice, I'd probably crack one enlivened with Brettanomyces like Molly Rose Matilde for myself but, when it comes to turning on someone new, you've got to go with the classic.
- Rodenbach Caractère Rouge. Because if you don't enjoy or can't appreciate this beer, I'll never win you over. And because Filip, the fruit and wood specialist at Rodenbach that designed it, is a beautiful human.
The last beer you enjoyed:
Fixation IPA at The Incubator.
Three things that represent you:
- The Soft Bulletin by The Flaming Lips
- Catch-22 by Joseph Heller
- Golden Plains
NB All articles written by James in the first eight years of the site appear as By Crafty Pint. Today, that's used for collaborative efforts by the wider team.
