Popular Melbourne craft brewer Deeds Brewing has announced it is permanently closing. The news follows the business entering voluntary administration in March.

“It’s with very heavy hearts that we are announcing the impending closure of Deeds Group, Deeds Brewing, Future Proof Distilling and Deeds Taproom,” the brewer said in an email.

“Deloitte, our administrators, made the decision yesterday that these business are being wound down over the next two weeks, and we are to clear all stock. Please note that the Taproom has already permanently closed but will be operating a pop-up bottle shop for a few days.”

Deeds Brewing was named champion medium brewery and champion Victorian brewery at the 2023 Australian International Beer Awards.

“Over the last 12 years, we’ve poured our hearts into every brew, every interaction, and every moment shared with you,” the brewer announced on social media.

“Since going into voluntary administration eight weeks ago, we have been searching for a buyer or investor, hoping to keep the spirit of Deeds Brewing alive, but unfortunately, this hasn’t come to fruition.

“Our hearts are broken. Since launching Deeds Brewing in 2012, our mission has always been about passion and people. We’ll deeply miss our dedicated staff, who have become like family to us, and our incredible fans who’ve stood by us through thick and thin throughout the years.

“We want to thank you for all the love and support you have shown us. In these tough times for businesses and individuals alike, we extend our best wishes to everyone in the industry. Now more than ever, it’s crucial to support local businesses.”

Craft brewers in crisis

Since the beginning of 2024 alone, Western Australia brewery Golden West, South Australia’s Big Shed, Victoria’s Hawkers and NSW’s Wayward have all gone into administration. Newcastle’s Steel City Brewing has also ceased production due to cost of living pressures.

“I don’t use language like ‘the situation is dire’ very often, but it absolutely is,” Independent Brewers Association (IBA) chief executive Kylie Lethbridge recently told 9news.com.au.

Lethbridge said the industry was facing a perfect storm of surging costs, rising inflation – and hence skyrocketing excise tax – plus falling consumer demand for premium beer due to increasing cost of living pressures.

“We are the third highest taxing nation on beer manufacturing in the world,” Lethbridge said.

“Our tax increases twice a year, not just once but twice [when the alcohol excise increases in line with inflation]. It’s a very uneven playing field in regard to how Australia’s alcohol is taxed. Wine is taxed differently to spirits and beer and it doesn’t generally provide a fair playing field.”

The Australian Taxation Office is also insisting breweries pay their outstanding alcohol excise payments, which were deferred to help them stay afloat during COVID-19. This pressure has been named as a contributing factor to both Deeds and Hawkers entering voluntary administration.

Hawkers asked for a two-year extension on its excise payment and was told by the ATO that it only had seven days.

“The inflexibility in not allowing those extensions means that they (the ATO) are losing,” Lethbridge said.

“In that case, there was $1.5 million that was owed, and they’ll get… 10 cents on the dollar as opposed to that (entire) $1.5 million back just by allowing that extension.”

Australia lagging world on alcohol tax reform

Deeds was launched by university friends Patrick Ale and David Milstein in 2003. It currently employs around 50 people.

The founders released a statement in March saying:

We started in business together in 2003 with a big dream to own our own brewery. We were young Engineering students who were super ambitious. We began our journey by importing beer from South America, working from a home office and then delivering stock out of the back of our own cars. It was a hard slog for many years, but our efforts eventually paid off and Deeds was born in 2012. Fast forward to 2015 and we realised a dream we’d had from the beginning by opening our own brewery in Glen Iris.

We’ve enthusiastically and positively embraced the many challenges we’ve faced over our 21 year business career and there have been many, but the decision to put Deeds into VA has been the most difficult decision we’ve ever had to make.

We feel terrible for the stress this is causing to our staff, our suppliers, customers and our fans. This decision was not taken lightly.

We were left with no other choice as a result of two events that occurred in the space of the last week. As many other breweries, we have legacy tax debt from COVID, the ATO had previously been ok to let us pay when we could, but in the last 12 months they have changed their approach. We’ve asked the ATO for a payment plan numerous times, and have been rejected each time. We simply wanted more time so we would not have to put massive strain our business during very difficult market conditions.

We also had a malt issue from 2022, in which we purchased contaminated malt, brewed a very large amount of beer that got out in the market, which we then had to pull out of the market at our costs. We’ve been working to make a claim through insurance, unfortunately our claim was rejected this week. These 2 events have left us with no other option but to put Deeds into VA.

Sales have slowed across the board and with rising ingredient costs, labour costs and a decline of people drinking beer due to inflation, it’s been a slower recovery from COVID than a lot of us in the industry had anticipated. We’ve tried to pivot to give our fans more economic beer options and have been absorbing costs where we can to give our fans the best price possible. Unfortunately this hasn’t helped our situation.

Our goal is to work through this with everything we’ve got and come out of VA with a stronger business than we have now.

We know it’s difficult out there and a lot of people are struggling but if you have ever enjoyed our beers in the past and wish to continue enjoying our beers in the future, we’d really appreciate your support. Now more than ever. You can still purchase our beers online through our website or from your local bottle shop/bar. If you’re Melbourne based, come visit us at our Taproom in Glen Iris, we have a great line up of beers and food and drink options for everyone, not just beer drinkers. We’re proud of what we have built with DEEDS and want to thank everyone that has supported us so far, we hope that we can continue to brew beers that are worth sharing for many years to come.

Thank you for your support.