Running a brewery in Australia is no easy feat. The industry is competitive, the margins can be tight, and the economic landscape can be unpredictable. For many local pubs and breweries, the dream of serving up craft beer to a loyal customer base can be overshadowed by the financial realities that come with operating a business. Rising costs, changing consumer preferences, and the pressure of competition can all contribute to a pub’s decision to close its doors.
The decision to close a brewery is never taken lightly. It involves careful consideration of financial health, market conditions, and the long-term viability of the business. For some, selling the brewery might seem like a logical next step. However, the process of putting a brewery up for sale in Australia can be complex, involving everything from assessing the value of the business to navigating the legalities of the sale.
Atomic.Beer Signals Last Round
Atomic.Beer in Redfern, NSW, is a recent example of a classic pub and brewery that has faced these challenges head-on. Since serving its first drinks in 2020 as a cousin of WA’s Gage Roads, Atomic Beer has been a beloved spot for locals and visitors alike, known for its unique brews and vibrant atmosphere. However, despite its popularity, the brewery faced mounting financial pressures that ultimately led to announcing on 1 September that it had served its “final round of beers.” The closure also meant that the Atomic drink line was now out of production.
Atomic.Beer’s parent firm, Good Drinks Australia, reported in April 2024 that it was considering a sale of the venue and the brand itself, to focus on certain core brands. Financial records found that Atomic.Beer’s EBITDA for H1 FY24 was $200k lower than the EBITDA logged in H1 FY23.
A listing handled by Boutique Property and Advisory described Atomic.Beer as a fully-fitted out and leased venue ready for trading. The features include a DME 12.5 HL brewhouse with up to 250,000 litres annual output, a 578 sqm space with seating for 200 pax, and within walking distance to Waterloo Station.
Atomic.Beer’s closure was not just the end of a business; it marked the end of an era for the Redfern community. The brewery had become a local institution, a place where people gathered to enjoy good beer and fun company. Its closure left a void in the neighbourhood, serving as a stark reminder of the challenges that even the most successful breweries can face.
Managed Closures: Steps for a Smooth Brewery Transition
When a decision is made to close a brewery, a managed closure can often be the most effective approach. This involves carefully planning the wind-down of operations to minimise disruptions, protect the brand’s reputation, and ensure compliance with all legal and financial obligations. Managed closures can help owners avoid the pitfalls of sudden shutdowns, such as damaging relationships with suppliers, customers, and employees.
A managed closure typically involves several key steps, such as the following.
Financial Assessment
Determining the financial state of the business, including debts, assets, and potential liabilities. This step is crucial for understanding whether the business can be sold as a going concern or if liquidation is the best option.
Communication Strategy
Developing a plan for how to communicate the closure to stakeholders, including employees, customers, and suppliers. Transparency and clear messaging are vital to maintaining goodwill during this difficult time.
Asset Management
Deciding what to do with the brewery’s assets, such as equipment, stock, and intellectual property. Some items may be sold off, while others could be retained for a future venture.
Legal Compliance
Ensuring that all legal requirements are met, from employee entitlements to licensing obligations. This step is essential to avoid any legal complications during the closure process.
The Future of Pubs and Breweries for Sale in Australia
With the closure of pubs like Atomic.Beer, the question arises: what happens next? For some, the end of a pub’s operations can open the door to new opportunities. A brewery for sale in Australia can attract a range of potential buyers, from established brewing companies looking to expand their portfolio to entrepreneurs eager to enter the craft beer market.
However, selling a brewery is not always a straightforward process. It involves a detailed assessment of the business’s value, including its brand, customer base, and physical assets. Potential buyers will also consider the location, market conditions, and the future growth potential of the business. In some cases, the brewery may be sold as a going concern, allowing the new owner to take over operations seamlessly. In other cases, the sale may involve liquidating the business’s assets and closing down the brand entirely.
For those pubs considering selling, it’s important to work with experienced professionals who can guide them through the process. This includes financial advisors, real estate agents, and legal experts who can help navigate the complexities of the sale and ensure that the business is sold for its full value.
The closure of a local pub or brewery has a ripple effect on the community. It’s not just about the loss of a business; it’s about the loss of a gathering place, a source of local pride, and often, a piece of the area’s history. For communities like Redfern, the closure of Atomic Beer represents a significant change, one that will be felt by residents, workers, and visitors alike.
However, while the closure of a pub can be a sad event, it can also be an opportunity for renewal. The space left behind by a closed brewery can be transformed into something new, whether it’s a new business, a community space, or a different type of venue. For the Redfern community, the closure of Atomic.Beer may mark the end of one chapter, but it also opens the door to new possibilities. The pub management stated though, that they are hoping for another chance to serve the Redfern community again someday.
Conclusion
Classic pubs closing down like Atomic.Beer is a reminder of the challenges faced by Australian breweries. While these businesses are often beloved by their communities, they are not immune to the financial and operational pressures that come with running a business. A strategic approach to closure, including managed closures and considering the sale of the business will help pub owners navigate this difficult process while protecting their reputation and the community they serve.
As Australia’s brewery landscape continues to evolve, the story of Atomic Beer in Redfern serves as both a cautionary tale and a testament to the resilience of the industry. While some pubs may close their doors, others will rise to take their place, continuing the tradition of great beer and great community that has defined Australia’s pub culture for generations.
DISCLAIMER: This article is for informational purposes only and does not replace official business advice. AVANTE PARTNERS is not a partner in any local drinking establishment.
