Margaret River’s Black Brewery Co is among the latest craft breweries to enter administration after buckling under ATO debt.

The brewery was faced with a demand from the Australian Tax Office for payment of $1.2 million and went into administration last month. It is among many breweries that have closed over the past 12 months with ATO bills among their biggest debts.

Coupled with the cost-of-living, raw material price rises, higher energy and wages bills and an increase in excise payments, outstanding ATO bills are pushing many businesses to breaking point.

The news comes less than 12 months after Black Brewery was named State Champion Brewery for Western Australia at the 2023 Independent Brewers Association Awards (Indies).

An IBA Federal Budget submission earlier this year said: “2023 saw small breweries closing at an alarming rate and several larger breweries go into administration. The start to 2024 is no different. These restructures resulted in dramatic job losses and massive losses for supply chain suppliers and creditors – of which the Australian Tax Office is often the largest.”

Legacy tax debt was was accrued by many brewers during the pandemic when the ATO allowed them to defer their excise tax payments. Brewers used the money to prop their businesses up during lockdowns and have struggled to catch up with payments.

The ATO told the Australian Financial Review it was maintaining its position of “strong and deliberate action to deal with those who ignore their obligations and refuse to engage with us to pay their outstanding amounts”.

An ATO spokeswoman said the ATO had deliberately paused the majority of debt recovery actions during the early stages of the pandemic, but was now back to full recovery mode.

In late 2022, the ATO implemented a “gradual reset” before it returned to a “business as usual” approach.

“Whilst the growth of collectable debt is slowing down, addressing growing collectable debt remains an area of focus for the ATO. It’s the ATO’s responsibility to ensure a level playing field, protecting other creditors, and supporting those who are doing the right thing and paying on time.”

Australian beer industry faces its darkest week