Over the past couple of years, we've examined the challenges facing the local beer and hospitality industries, as well as the ramifications of the spate of closures, sales, administrations and liquidations for suppliers, customers, communities and the beer world as a whole.

Here, Will Ziebell gains an insider's view through the eyes of employees of some of these sinking ships. Over a number of months, he spoke to former staff at several businesses across Australia that have changed hands, gone under, appear to be heading that way, or have been through a process of administration.

He looks at the impact business failures have on staff, asking whether some of the problems have been self-inflicted rather than the result of external forces, and what can be done to minimise collateral damage in the future.

The names of everyone featured in this story have been changed as all spoke to The Crafty Pint on condition of anonymity.

“It was a good brand and had legs to be something different. And they just cooked it.”

*   *   *

There’s no doubt the last few years have been incredibly difficult for the beer industry. Popular venues have closed, award-winning breweries have collapsed, and “voluntary administration” has become part of the lexicon.

The rash of closures, sales and administrations followed a pandemic nobody predicted, which segued straight into the brutal combination of inflation, declining spending, and a global supply chain continually throwing curveballs.

Competition has increased, interest in beer as a whole has been in decline, and the major retailers have lined their shelves with homebrand beers – some of which can even be found on tap now. It’s become commonplace to hear tales from indie brewery reps or venue staff of how the major breweries have clamped down on enforcing their contracts, leaving hundreds of smaller breweries to fight over a skerrick of taps in pubs and bars, many of which are barely managing to stay afloat themselves.

The Crafty Pint has previously explored concerns around the impact voluntary administrations have had on the industry and spoken with those who have been through the process about their experiences. But is this unprecedented series of circumstances and relentless barrage of challenges solely to blame? Or have some businesses been brought to their knees by internal failings too?

In recent months, The Crafty Pint has spoken to employees in a range of roles in the beer industry across Australia whose experiences suggest better decision-making by owners might have saved their businesses, or at least minimised the collateral damage.

Certainly, that's how Cassie – quoted at the start of this article – felt after the brewery she worked at closed down. After all, there had been plenty of high marks: great beer; growing popularity; expansions; fun beer launches and collabs; her colleagues' phenomenal passion and all they’d achieved.

Yet it all went wrong, and Cassie finds it hard to see anyone to blame beyond the owners. 

They’d overseen an expensive expansion that didn't make sense. They’d allowed debts to mount. They refused to pay some suppliers and placed mates in roles for which they weren’t qualified. They’d never bothered with HR, feeling they were best placed to look after staff, and rarely filled roles managers told them time and time again were needed. Whenever staff left, they’d treat it like a betrayal; how dare they look for greener pastures?

They never worried if the business was sustainable or not; they had money and they just wanted to see it grow.

Ultimately, they knew they were in real trouble for some time but they just kept going as debts mounted, never telling those that remained how bad the outlook had become.

Having spent many years working for the brewery, Cassie's experience was one of increasing exasperation, one in which she couldn’t understand why they were making the decisions they made. From what she witnessed, the brewery wasn’t fit to sail because the captain couldn’t steer it and had instead been lifted up by a rising industry and the hard work of others. “A boat with a leak in it is safe on dry land,” is how she describes it. “So, even if there are problems, they’re not going to show up until there's external pressure.”

As conversations stretching back months with senior staff at breweries across Australia show, Cassie is far from alone.

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When the brewery Cassie worked for announced it was to close, comments came in thick and fast about how government policy was killing the beer industry. But she says it was poor management and owners with limited understanding of either brewing or the hospitality industry that brought them unstuck. “There is a big message that the ATO is killing craft beer, and it’s true: excise is crazy,” she says. “But that’s not what hurt us.”

In particular, she points to a venue and brewery expansion that never had a clear business plan. She says her bosses never fully thought through the increase in wages required to sell the beer or run a far larger venue, or how much more work was needed to operate a growing and multifaceted business.

“I don’t think the downside to the growth or expansion was really factored in,” she says. “We expanded the amount of people we had in the venue, and then I’d have to have arguments with the boss about why it was taking staff longer to clean, and costing us more to run the venue.”

Such issues were compounded by a brewery that had always been too lean; people weren’t getting paid much but continued working there because they loved most of the work and believed in the brand. Yet there wasn’t enough money to cover training and hiring new staff when people left, or to repair broken equipment, or to cover a slowdown in sales that eventually came.

What’s more, she and many other staff were owed leave that kept building up. “There was just never any fat to allow for things to go wrong,” Cassie says. “The numbers were always interpreted as about to go the right way.

“They might have thought they could address it at a later point, but if you’re running a business you have to factor in paying super, sick leave and annual leave, so it shouldn’t ever be an issue.”

Cassie talks about a lack of discipline from the ownership group, how events would pop up and they’d throw money at them without any discernible rhyme or reason. They felt that ever-increasing visibility would always work best for the brewery without accounting for how much they might lose by sponsoring events that didn't align with their brand.

“It was just constant side quests: let’s do a can release to impress someone instead of focusing on national distribution in a meaningful way,” she says.

She also can’t understand why they wouldn’t accept how bad the brewery’s position was. Looking back, she thinks it was clear they were in real trouble for at least six months before they closed. In that time, they’d changed their branding, hired new staff, and spent more on plans for the future.

“They must have known we were going under and done nothing,” Cassie says.

As the ship started to sink, it hit Cassie really hard: beyond losing her job, she’d convinced some friends to join the brewery on the promise it was a good place to work.

“It was going under and I just went, ‘Fuck, I’ve ruined people’s lives, including my own.’

“I think ego can prevent owners from having that responsibility; you don’t want to admit to yourself you’ve affected a lot of people’s lives.”

Dig Up, Stupid

It’s a similar position to that in which Rachel found herself in when she joined a brewery that, in hindsight, she thinks was trying to dig itself out of a hole by spending more and more.

“I had a really good job, but it was pretty boring, so I thought I’d give the beer industry another go,” she says.

“Everything looked good and, on a surface level, it all seemed like a good place to work. But they knew things were falling apart since they’d hired me, so it was just like, ‘Brilliant, I don’t have a job now.”

By the end, her role had ballooned way beyond the initial position for which she was hired. She watched as staff quit and felt those who stayed didn’t want to be there. Rachel spent her nights making flashy documents in an attempt to convince “brand new sugar daddies” to invest in a quickly sinking brewery from which some of the original founders had already walked.

“It just becomes a horrible work environment,” she says. “There’s no real boundaries; you just get more and more roles added to your job.

“I was at the desk making prospectus packs for investors until 8pm at night and wasn’t allowed to leave.”

Such concerns cropped up regularly in these conversations, with beer's passion tax – something we wrote about late last year – raised by interviewees.

In Cassie's case, it reached a point where she felt she was being preyed on by her employer to keep staff working and make them fill roles for which they weren’t hired or suitably skilled. Given much of the industry is populated by younger workers drawn in by the buzz around beer, she thinks it can create an ecosystem in which narcissists can thrive, particularly when they’re used to getting their own way and spending their way out of problems.

“If you have money, you can throw it at problems to make them go away, but that’s not really sustainable,” Cassie says.

“I think there was a gambler's mentality: ‘The next quarter will be great’ or ‘I’m about to get a grant.’”

Pressure mounted as sales targets weren’t met, leaving her feeling the need to keep working harder and putting in longer hours. As the brewery declined further, that pressure only intensified as she worried about securing shifts for staff and their ability to pay rent as they desperately tried to keep their heads above water.

“It’s tough to take care of yourself in that situation,” she says. “Especially when so much of the business’ success or failure hinges on your day-to-day actions. All because there’s been no long-term strategy to prevent or address issues.”

So, while she knows there are good people running businesses that have been brought down by the challenges slamming beer from all angles, she's convinced there are bad operators making the situation worse.

“I think there's a bunch of owners that are good people who are good businesspeople,” Cassie says. “I hope that's the majority, I don't know if it is. Then there's good people who just don't know how to run a business.

“I think I just worked for a bad person who also doesn't know how to run a business.”

She adds: “It’s really hurting the economy and the industry so people can play brewery owner.

“A business is part of the community and a wider supply chain, so you’re going to hurt a lot of people, and I don’t know if every owner always carries that responsibility.”

In Cassie’s case, she was terminated and told her super and leave wouldn’t be paid. While this will eventually make its way to her via the Fair Entitlements Guarantee, that doesn’t apply to the temporary visa holders who worked alongside her. 

“We've had staff that are on visas who aren't eligible for the government entitlements guarantee which pisses me off.

“They're just never going to see that money and the government's just going to have to pick up the tab for mine and a lot of other people’s leave.”

What's A Few Bucks Between Friends?

Cassie highlights another issue that every person spoken to by The Crafty Pint for this article raises in one way or another: that, in some ways, it remains a strikingly immature industry in which handshake agreements and informal arrangements are common, and in which communication and systems don’t always keep pace with growing businesses.

Watching owners try to impress their friends was particularly brutal when she realised how behind her employer was with leave.

“There’s that culture of looking after mates and having an ego,” she says. “We’d be giving people free beers and, at the same time, not getting our super paid.”

It’s a situation to which Rachel can relate. A group of wealthy individuals felt they could run a brewery well because they’d enjoyed some success in other industries. 

“It still that couple of bros starting a brewery that don’t know what they’re doing,” she says.

“It felt like they were just buying people beers in the most expensive way possible to show how good they are.”

Cameron went through a similar experience while working for several businesses as a brewer, and believes the industry’s boom led to the arrival of inexperienced but wealthy owners who saw beer as a way to add to their substantial business portfolios.  

“I think like a lot of boom industries,” he says, “a lot of people have come into craft beer to try and cash in, but they just aren’t equipped to do it.

“We need them out of the industry.”

He describes walking into a brewery where an expansion seemed so over the top and targeted at all the wrong places that he wasn't surprised it folded. He points to how owners will invest in relatively cheap fermentation tanks but are less willing to spend money on expensive but necessary equipment to ensure quality.

“If you’re going for pure volume and just looking at fermenters and brite tanks then it’s so doable now,” Cameron says. “It’s different for canning lines and centrifuges that are more high-end.

“My boss could see they could buy three fermenters for the cost of a great dissolved oxygen meter and just go, ‘Why do you need that?’

“I was begging to get quality right and to make sure there was enough demand for our products first.”

He talks about ambitious forecasting that can lead to a spiral in which too much money is spent, there isn’t enough demand, prices drop, and then things get tough. In the case of one brewery he worked for, it collapsed under the weight of debt to others, money other businesses owed them, and a lack of demand.

“You get more volume and the sales don’t come through,” Cameron explains. “So you’re in this tricky situation where you have so much beer, so you sell it at a reduced margin and, all of a sudden, we’re a big brewery in a race to the bottom.”

He also paints a picture of a constant battle between senior brewers trying to forecast and order ingredients, and owners not paying bills or telling staff they can't pay money owed to suppliers.

“I knew we could be running more efficiently,” Cameron says of one business. “So, I focused on streamlining with certain suppliers and ordering more base malt, then made it crystal clear that certain suppliers were primary and would need to be on a must-pay register.

“I made the core range beers significantly less per carton, and then we’d keep getting the accounts held up because we just weren’t paying on time.

“Then our cost of goods went up and we’d have all our time tied up too."

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Cameron's experience is one with which Nathan, who has spent around a decade working in beer in Australia, is all too familiar. Suppliers to the brewery where he worked weren’t getting paid and, suddenly, he was unable to brew. One workplace even had rubbish build up because they weren’t paying for it to be collected.

“You run into issues where there’s no communication between you and the accounts team,” he says. “It's up to me to order everything but then the ingredients don’t turn up when you need them because bills aren’t being paid.”

In such situations, and at a time when even owners with the best intentions can be driven off course by the “perfect storm”, workers often bear the brunt.

“We certainly have economic issues that are out of our control and government decisions we unfortunately don’t have that much influence over,” Nathan says. “It’s horrible for people to lose their business, but it’s hard to accept what’s gone on behind the scenes.

“You can end up with owners who might have a good heart needing to make really cutthroat decisions. They reduce the quality of the beer, the tank time, and how employees are treated and what they’re paid. Anything to get that thin margin better.”

Following a major expansion at one brewery, Nathan found the management bouncing from one idea to the next. They’d push for the brewers to create new products in an attempt to catch up with trends, even if the brewhouse wasn’t set up to make what they were demanding. Ultimately, nobody working there really knew who they were as a brewery anymore.

“It’s a slow decline and then your problems all mount up,” he says. “Owners might pull in certain directions and all things just keep failing, and you end up with too much production capacity and debt.”

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Vincent brings a different perspective; rather than working in the brewing side of the industry, he has spent a long time working in sales and behind bars. Over his time in beer, he's seen multiple breweries expand their footprint with no real business plan in place: their beer is popular, they know people want more of it, but they don’t think through what a second taproom costs, or build a system capable of managing a rapidly-growing workforce.

“The reality is all expansions just bring question marks,” he says. “I think there needs to be more people who grow because they absolutely need to, not because they think it’s going to lead to something.”

He cites the example of one brewery that grew significantly; as they did so, staff communication broke down as everyone worked harder and harder trying to reach a point of profitability that merely kept moving further over the horizon.

“It was always just: this has to grow, capacity has to grow, retail customers have to grow. If they aren’t tracking the right way, we’re fucked.

“It’s disheartening to be in a brewery where you know they’re chasing growth and the entire team is working so hard and you’re staring down the barrel going, ‘This just isn’t ever going to get better.”

He shares other concerns around staffing too, not least watching owners hire people to positions of power only to be unable to relinquish control of that part of the business. Cassie describes such cases as “cutting someone off at the knees”; Vincent feels it was a way to deflect poor decision-making while still maintaining control.

“They’d want someone between them and the decisions,” he says, “so they had someone else to blame.

“I don’t think it was as premeditated as having someone to take the fall, but it allows you to throw your hands up and go, ‘I didn’t know how bad things were.’

“But what you did know is you had people without experience working roles they shouldn’t have been in.”

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Michelle worked in accounts at a brewery that later entered voluntary administration and, likewise, points to a business in which there was limited understanding of its own finances. In this particular case, that included key agreements between the brewery and suppliers which, along with fines that stemmed from non-compliance issues, created unexpected financial shortfalls.

“Overall, the environment felt unstructured and immature, which prevented the brewery from addressing its challenges effectively,” she says.

When Michelle raised cash-flow issues, her concerns were dismissed, and she felt management weren’t being open with staff.

“I believe some of the main causes of issues within the brewery stemmed from a lack of transparency and financial oversight,” she says.

“Irresponsible spending driven by a lack of understanding of our financial position compounded the issue, especially as there was no formal budgeting process or legal contracts in place to safeguard the business.”

She describes the experience as extremely stressful due to the pressure of fielding questions from her colleagues on the one hand, and management who didn’t seem to accept the issues facing them on the other.

“Every day was a balancing act,” she says. “Knowing there were bills to pay and not enough money to cover them, while the rest of the staff were unaware of the financial difficulties.

“I was constantly trying to find solutions to make ends meet, but the weight of that responsibility, combined with the lack of recognition from management, took a toll. It was a difficult environment and, while I worked hard to maintain professionalism and keep things running, it ultimately had a negative impact on my personal well-being.”

Such concerns around financial misunderstandings were raised by Vincent too; as with Rachel staying up producing flashy prospectus documents, he'd watch his owners go out to raise more capital by taking on new investors, only to discover when they brought in a financial professional that, as Vincent puts it: “none of the numbers were accurate at all.

“There’s no way to slice it; you can raise money off an impressive-looking document for different investment rounds. Obviously, nobody wants to paint themselves in a bad light, but often they weren’t done in the detail needed.”

Once the owners had a better understanding of just how perilous their business was, Vincent says the whole brewery started to flail: nobody knew in which direction to swim or even where the land was.

“The panic stations really started to happen then,” he says. “We knew we needed a new marketing strategy that wasn’t going to cost as much, we needed to start restructuring deals with [bars and bottleshops], and we needed to start having conversations with suppliers about making beer more cost-effective.

“To think that an owner in a position of authority wasn’t doing that the entire time is just laughable. The business just hadn’t been under control for a long time.”

Where To From Here?

Vincent remains concerned that many business owners don’t listen to experienced staff, and aren’t upfront with them about how their business is faring. He’d also like to see a push for better HR oversight of breweries, hoping this will help “dodgy owners” understand they can’t treat staff however they see fit, and that a brewery doesn't operate outside the law.

He also believes too many people have come into the industry without a clear exit strategy or a path to follow when things get bad.

“Business partnerships are so difficult,” he says. “You’ve always got multiple people in a partnership, and if it’s three, two people might gang up on one, one personality might take over, but, ultimately, somebody gets screwed.

“I’d love to see founders have more robust contracts in place about ownership. It’s pretty evident that, no matter how good friends you are at the start, there’s going to be some bad times.”

Likewise, Michelle points to a need for better safeguards, formal contracts between senior management, and processes to manage executives leaving. She also believes staff deserve to be better kept in the loop; in her case, few had any inkling of the state the business was in when it collapsed.

“It's important to maintain transparency with staff regarding the company’s financial position so they understand the broader picture and can work together towards solutions,” she says, adding that one way in which businesses can avoid the pitfalls she witnessed is by ensuring the right staff fill the right roles in breweries.

“Having an approachable, experienced HR professional is key to managing staff effectively and ensuring smooth operations,” she says.

“Additionally, while many breweries rely on internal accounting teams, it's worth investing in an annual external audit to verify the accuracy of the financials and the balance sheet.”

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While she waits for the government to cover leave she’s owed by an employer who remains a business owner, Cassie thinks the industry, and the economy more widely, would benefit from more oversight.

“There needs to be more regulation,” she says. “I think there needs to be some sort of enforcement of the laws that are there.”

She believes changes to super payments, whereby employers are required to pay it along with wages, is an important step in the right direction. But she also questions how effective regulators are when it comes to chasing dodgy small business owners.

“You don’t need a licence to run a business and there’s really nobody enforcing these practices,” Cassie says. “Some of these people haven’t paid super for over a year – how is it getting to a year?”

While she’s still proud of what she and a team of passionate people achieved – those great beers, the joy of birthday parties in a taproom, the third place they provided for locals – she’s sometimes left wondering whether it was worth it.

“It does sound like, 'Why was I even there?' But we did a lot of good things,” she says.

"Talking about it’s good too. I’ve been going to therapy which does help.”

IBA members are able to access free human resources services that include policy templates and support from HR professionals. Members can access it here. 

About Will

Will Ziebell is a history graduate who knows more about The Wire than he does about beer. He was awarded the AIBA Best Media trophy for 2018; HBO have told him to please send his fan mail elsewhere. He can be found on Instagram, Twitter and TikTok.

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The beer(s) or moment(s) that turned you on to good beer:

Spending time living in the UK (and backpacking across Europe) when I was 21 certainly gave me a better understanding of the beer and different styles of the world. But I'd say it was a holiday to the High Country a little while later when lunch and a tasting paddle at Bridge Road Brewers created an obsession with Australian breweries and locally made beer.

You've got three beers to turn someone else on to good beer; what are they and why?

• Boatrocker's Miss Pinky: It's a raspberry-packed Berliner Weisse that neither looks or tastes the way many people conceive of beer.

• Bad Shepherd Hazelnut Brown: A luscious mix of chocolate and hazelnut that can appeal to the sweet tooth within us all.

• Stone & Wood Pacific Ale: As the father of my oldest friend once said to me: "It's the perfect refreshing pint that smells like they've loaded it with the God's herb."

The last beer you enjoyed:

Garage Project's DFA while sitting at the bar at Miss Moses as the sounds of The Rolling Stone drifting in the background.

Three things that represent you:

• Bruce Springsteen
• Ken Burns
• The State Library of Victoria

Articles by Will