Lion has sold its West End 500 hectolitre German-made Steinecker brewhouse to Ostra Distillers, which plans to use it to produce whisky and other spirits.

The brewer announced it plans to close the West End Brewery in June 2021. Ostra operates a distillery in Robinvale, 90km south-east of Mildura. The former sherry-making site previously focused on contract production.

Ostra’s founder Dawid Ostrowski said he’d been looking to expand operations for several years and would now ramp up production for a global market and use the equipment to produce wash for the distillery.

“We’re so humbled and honoured that we can continue the West End brewery history and keep it operational on the next leg of its journey to make single malt whiskey,” he said.

“We’re going to make use of this to make really high-end craft spirits, but on a scale that we can then sell it to the world. Globally we’ll still be seen as a small, craft, boutique distillery, but it gives us enough volume to be able to put a bottle of Australian whiskey in front of a global audience.”

West End was established in Adelaide in 1859. It moved to the Southwark Brewery in Thebarton – its current location – in 1980. Until it closed last year, the brewery produced West End Draught, Southwark and a range of Lion beer brands including Hahn, Toohey’s and Little Creatures. Lion’s three cider brands — James Squire Orchard Crush, 5 Seeds and Kirin — were also made at the brewery.

The brewer said it was a “sad day for the West End team, Lion and South Australia” when the brewery closed.

“West End has been operating well below its full production capacity for some time now and unfortunately this is no longer viable,” the company noted.

“We have come to this proposal as the best way to ensure we have a sustainable brewing network for the future. The Australian beer market has been in long-term decline for the past decade as Australian drinkers choose other beverages, like wine, over beer. Per capita beer consumption has dropped around 20% in this time.

“Our input costs have continued to rise against this backdrop of declining volume, and a further drop in draught beer sales as a result of the pandemic.”