Hawkers have today become the latest brewery to enter voluntary administration in a move that will come as a major surprise to many in the industry. Since launching in 2015, the Reservoir-based business has grown into one of the largest and most highly-regarded operations in the country, with sales of their own brands, including the Rover offshoot, continuing to grow year-on-year.
They have appointed DBA Advisory as administrators, the same business that has worked with Bad Shepherd, Dainton and Wayward Brewing over the past four months. In a media statement, they said the decision was taken "to help facilitate a financial restructuring of the business".
The statement goes on to say it remains business as usual, with "no impact to ongoing production and distribution as a result of this appointment".
Hawkers founder and managing director Mazen Hajjar said in the statement: “Post Covid has been a challenging period with bigger players increasingly restricting access to taps and shelf space, combined with broader economic pressures, including increased input costs and taxes. However, we are confident that the restructuring will ensure the business is in a stronger position to fight these challenges going forward.”
Speaking to The Crafty Pint, he said he believed Hawkers' ongoing growth would be "easier and much faster if we had better access to market", citing not just the tap contracting issue he has spoken about many times in the past, but also the rise in craft beer "homebrands" produced the country's major retailers.
Describing the situation as "crazy", he said of today's move: "We have to do what we have to do to protect our business and ourselves, and to make sure we come out healthier on the other side."
While Hawkers have continued to perform well in a tough market, with sales growing year-on-year, last year Mazen worked with The Crafty Pint on a feature highlighting just how tightly the country's brewers were being squeezed by rising costs, increases in tax, and the introduction of the container deposit scheme (CDS) in Victoria, which has added more than $3 to the cost of every case of beer.
These increased costs have come at the same time as an economic downturn and well-publicised cost of living crisis. Excise tax debts that businesses were allowed to accrue during the early years of the Covid pandemic also became due at this time, leaving many brewers trying to negotiate payment terms with the ATO – or face administration or liquidation.
Last month, we summarised the damage wrought on the industry in the 12 months since Ballistic Beer Co entered voluntary administration in The Year Of Living Precariously. Since then, Thirsty Crow in Wagga Wagga has been put on the market and, last week, Ballistic's new owners announced they were closing their Airlie Beach venue while they look for another in the Whitsunday Region. UPDATE: And Big Shed Brewing in Adelaide have entered voluntary administration since this article was published.
In their most recent member survey, the Independent Brewers Association (IBA) were told by 91 percent of their members who responded that they have been somewhat, highly or extremely impacted by the current economic environment; 66 percent of respondents stated that their business may not survive the economic downturn.
Amid the gloom, the overall picture does appears to be mixed, at least based on conversations The Crafty Pint team has had with business owners in both the brewing and hospitality industries. There are operators who have enjoyed good trade through venues in recent months and those whose wholesale business continues to grow in the tightened market. And, of course, new players continue to enter the market while existing businesses open more venues.
However, with excise tax on alcohol rising again earlier this month, it seems highly unlikely Hawkers – who are set to celebrate their ninth birthday this week – will be the last local brewery to enter voluntary administration this year.
Read our examination of the spate of administrations and what the industry is calling for from the Federal Government in Where To From Here For Local Beer?
Media Statement: Hawkers Beer enters voluntary administration to facilitate financial restructuring
Australian Brewers Guild Pty Ltd trading as “Hawkers Beer” (Hawkers) has announced they have appointed an administrator to help facilitate a financial restructuring of the business. Hawkers is one of Melbourne’s largest manufacturer and distributor of craft beers, based in Reservoir.
DBA Reconstruction & Advisory as Administrator is supporting the continued operation of Hawkers, so employees and customers should consider it business as usual. There will be no impact to ongoing production and distribution as a result of this appointment.
The directors of Hawkers have taken this step to deal with financial losses the business has accrued in the face of increased restrictions on market access combined with significant increases in production and distribution costs. The directors are working with the Administrator on a Deed of Company Arrangement (DOCA) proposal, which will provide a framework for the restructuring of the business. They are confident the financial restructuring will result in a stronger and more resilient business emerging from administration.
Founder and Managing Director Mazen Hajjar said “post Covid has been a challenging period with bigger players increasingly restricting access to taps and shelf space, combined with broader economic pressures, including increased input costs and taxes. However, we are confident that the restructuring will ensure the business is in a stronger position to fight these challenges going forward.”
Hawkers remains committed to maintaining a high standard of service and open communication with all stakeholders during this restructuring process.
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.
