There’s some sadness as I write this editorial, with news that the much-loved Invercargill Brewery entered receivership in March.
It’s the third regional brewery of some substance to hit a financial snag in the past year. Mike’s in Taranaki went into voluntary liquidation because of excise duty debt.
Late last year renaissance in Blenheim went into voluntary administration and the debt laden brewery was put on the market. A sale to distribution company Brandhouse has allowed the brand to keep operating.
Now we’ve got the news Invercargill Brewery has gone into receivership. Receiver Trevor Laing said the company went into receivership “simply because it made a default in payments to a secure creditor.”
When a secured creditor wants money owing to it that’s not a good sign. Receivership is a tougher spot to get out of compared with liquidation or voluntary administration. The court-ordered receiver is obliged to act for the secured creditor and that usually means selling off assets to repay debt.
Invercargill brewery owners Steve and Amanda Nally have been strong supporters of this magazine and have been pioneers in the New Zealand craft scene, with Invercargill leading the way when it came to contract brewing. They also make some damn fine beer.
The loss of Yeastie Boys as a contract client certainly hurt their revenue and the brewery had to battle hard in a province dominated by the Invercargill Licensing Trust which controls the wholesale to supermarkets as well as owning dozens of hotels and liquor outlets. The hook is that ILT has a 28.3 per cent in DB South Island Ltd (the DB brewery in Timaru) so it’s in the ILT’s interests to make sure as much DB gets sold as possible. I’d say this places the ILT well and truly at odds with supporting an independent brewery in its region. (As an aside, “independence” feels like the catchword for 2018 as an increasing number of small brewers seek to separate themselves from a “craft” pool in which the larger breweries are increasingly playing by virtue of their acquired assets.) As we go to print my understanding is that the receiver is close to finalising a sale which would see Steve Nally stay on as head brewer. After the difficult period they’ve been through, we wish Steve and Amanda all the best, and the same to the new owners.