In December 2019, Adelaide’s Big Shed Brewing Concern opened a custom-built brewery and 250-seat venue. It was the culmination of almost two decades of dreaming and planning for founders Craig Basford and Jason Harris.
Four months later, the pandemic hit and almost every plan Big Shed’s founders had for the future of the brewery “was thrown out the window”.
The Australian craft beer industry had experienced a decade of frenzied growth up until that moment. And while many breweries prospered during the initial period of the pandemic, others struggled.
To assist the country’s almost 600 independent brewers, the Australian Tax Office allowed a pause on alcohol excise payments.
“But nothing was forgiven, nothing was cancelled,” Big Shed’s co-founder Craig Basford tells Broadsheet.
When the ATO started calling for the money to be paid, the landscape had changed. The once booming craft beer industry was facing skyrocketing costs, interest rate hikes and declining consumer spending.
Breweries across the country started permanently closing or entering administration. In the last 12 months, more than a dozen independent brewers have entered voluntary administration, starting in March 2023 with Brisbane’s Ballistic Beer Co, which owed debts of more than $5 million, including more than $2 million to the ATO.
Since the start of this year, Wayward Brewing Co, Hawkers, Deeds Brewing and Akasha have also entered administration. Big Shed Brewing was another.
“We had to make a tough call,” says Basford. “It got to a point where we realised, if we go into voluntary administration now, we give ourselves the best opportunity to come out of it, save 40-plus jobs and save the business.”
An outpouring of community support for the Adelaide brewer followed. On March 21, Big Shed announced the business was back under the control of its original directors, with a restructuring approved by creditors, including the ATO, which will receive 10 cents for every dollar it was owed.
Throughout the process, Basford says the support of the public “was just ridiculous – I get emotional even thinking about it”.
This situation isn’t unique to Australia.
Dozens of craft breweries have closed in the UK over the last year. Some of New Zealand’s pioneering breweries have also gone into liquidation, while a raft of acquisitions, mergers and closures have afflicted the world-leading craft beer market in the United States.
“All of our costs have gone through the roof,” says Peter Philip, founder of Sydney’s Wayward Brewing, which also emerged from voluntary administration at the end of January. “Shipping and delivery costs, malt, hops, staff, rent – everything has gone up 25 to 30 per cent.”
“It’s a perfect storm, and the federal government needs to act if it wants the sector to survive,” says Kylie Lethbridge, CEO of the Independent Brewers Association.
The IBA, which represents more than 400 independent brewers, is calling for common sense reforms, such as extending the repayment terms of ATO debts and freezing the indexation of excise (a tax that goes up twice a year), to assist the country’s vibrant brewing community.
“Craft breweries are pillars of their local communities,” Lethbridge tells Broadsheet. “They’re meeting places. They rejuvenate run-down places and create destinations and visitor experiences in our cities and small towns.”
While brewpubs and taprooms are popular fixtures in the craft beer success story, it’s been a different ball game in the on-premise and retail market.
The Japanese-owned conglomerates Carlton & United Breweries and Lion, which have acquired multiple craft beer brands, control “at least 85 per cent of Australia’s beer taps”, according to Lethbridge.
Retail giants Coles and Endeavour Group (which operates BWS, Dan Murphy’s and Jimmy Brings, among other brands) have also developed their own affordable “craft” beer brands to compete side by side on the shelf.
“Like so many other brewers, we’re realising that the best opportunity to sell your product is through your own venues,” Dainton Beer general manager Paul Keeshan tells Broadsheet.
Dainton, another brewer that survived voluntary administration, has two Melbourne taphouses, but Keeshan says in an ideal world “we’d probably have more”.
“You’re in full control of your product that way and you make much better margins. But you’ve got to be humble and realise that your beer is not going to pull everyone through the doors. You’ve got to have something else to offer.”
Melbourne’s Molly Rose, Stomping Ground and Bodriggy have led the charge on that front, establishing schmick hospitality and dining offerings. Many others have diversified into making seltzer, hard lemonade and other “non-beer” products.
Boatrocker, Deeds and Noodledoof have added full-fledged distilling operations.
Craft brewers have been nothing if not agile, and while there are concerns about the shape of the industry moving forward, the evolution of beer appreciation and culture is, hopefully, here to stay.
“This is about preserving a culture in this country,” says Lethbridge. “What we’re calling for is, where you can, where it’s affordable, look for that ‘Independent’ seal when you buy your next beer in a venue or in the shop.”
“We’re small businesses, we’re local businesses,” says Keeshan. “We live in a world where acting and living locally is more important than ever, so do your best to support your local brewery.”
