Akasha Brewing goes into administration owing $2m, 18 jobs at risk

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A popular brewery is on the brink of collapse after racking up a hefty debt and has had to call in administrators.

Last Wednesday, NSW-based Akasha Brewery went into voluntary administration.

The appointed administrator, Henry McKenna of restructuring firm Vincents, told news.com.au the brewery continues to trade and “business as usual”.

Akasha Brewery operates a Sydney taproom in the inner western suburb of Five Dock and also a brewery.

But recently the business has fallen on hard times with a massive tax debt hanging over its head.

There are 18 staff at the establishment but their fate, and the fate of the company, hangs in the balance.

“The directors decided the company was likely insolvent mainly because of a large tax debt, mostly unpaid Excise Tax on alcohol sales,” Mr McKenna said.

“I understand this is hurting a lot of small breweries at the moment and really it’s something the government should look to lower or there will be further insolvency appointments in this sector.”

The company’s total liabilities stand at around $2 million, according to the administrator, with around $500,000 of that its tax obligations.

Other creditors include trade creditors, landlords and a financier where money was borrowed from.

The company’s assets are mostly its brewery equipment like large vats, a canning line, inventory and vehicles.

Akasha Brewery launched in 2015 and on its website it says the business “quickly gained a cult following in the Sydney beer scene and around the country for its punchy IPAs and Pale Ales”.

It boasts 14,000 followers on Instagram.

News.com.au contacted one of the directors for comment.

It comes as breweries across Australia are facing the “perfect storm” of factors which is bringing them to their knees.

Earlier this month, news.com.au reported that independent Melbourne business Deeds Brewing had gone into administration, with 50 jobs at risk.

Beloved Brisbane brand Ballistic Beer Company set the scene for the struggling brewery sector early last year after it was forced to call in administrators, which generated an outpouring of sadness from the Australian public. It was able to trade its way out of disaster and avoided going into liquidation.

Since then, a number of others have also gone under.

Last month, a popular South Australian business, Big Shed Brewing, went into administration after 20 years in business.

It followed Hawkers Brewery also falling into administration earlier in February, which was one of Melbourne’s largest manufacturers and distributors of craft beers.

Online alcohol retailer BoozeBud collapsed in May last year, announcing via its website it would no longer be taking orders.

The Wayward brand based in Camperdown in Sydney’s inner west, voluntarily put the popular business into administration on January 2, owing approximately $2 million to trade creditors, statutory creditors and shareholders.

Wayward owner Peter Philip said conditions affecting smaller independent brewers were a “perfect storm” and that “consumers are not supporting us to the extent that we need”.

Administrator Atle Crowe-Maxwell from DBA Reconstruction and Advisory added that the business was struggling under the weight of cost of living pressures and the high levels of government excise imposed on beer.

“This whole industry has just been smashed by excise,” he said of the government tax, which accounts for up to a third of the cost of beer.

The tax has been widely criticised for contradicting the Federal Government’s $225 million tax relief for small breweries and distillers as part of the 2021-22 federal budget.

Two Japanese companies, Kirin (owner of Lion) and Asahi (owner of Carlton United Breweries, also known as CUB) are actively acquiring independent breweries in Australia.