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An Australian brewery has gone into voluntary administration as the cost of living crisis claims another venue.
Lotus Beer Co, which runs Valhalla Brewing in Geelong, Victoria, has become the latest craft beer company to fall victim to tough economic times.
Scott Andersen and Matthew Kucianski of Worrells have been appointed as the administrators and the first meeting of creditors will be held next week.
'In the past two years we have seen almost every aspect of running a small business become more expensive - in particular ongoing increases in rent, insurance premiums, and essential expenses such as fuel, electricity, ingredients, and freight,' Buy Blue Lotus Beer Co's founding director Scott Hunt told Daily Mail Australia.
'Then on the other side of the ledger we have a massive decline in spending at our hospitality venues over the past 12 months.'
Mr Hunt said Sales at the brewer's original Union Street taproom in Geelong are down 50 per cent on the same time last year.
'And sales at the new brewhall at the Federal Mills are less than 50 per cent of what we believed was easily achievable when we signed the lease two years ago,' he said.
The director said the ongoing legacy of Victoria's 2021 lockdowns is a large part of the reason for the sharp decline in hospitality spending.
Cost of living pressures have led to yet another Australian brewery going into voluntary administration (stock image)
'Since the end of lockdowns in 2021, many people have not returned from working from home. Or if they have it is only for two or three days a week,' he said.
'We are simply not seeing people come out for a drink after work like they used to; particularly on Fridays which used to be our busiest time of the week.
'This, along with cost of living pressure, is what is doing so much damage to the hospitality industry.'
Mr Andersen echoed Mr Hunt's concerns, saying 'we understand Lotus entered voluntary administration due to rising cost of living pressures'.
He said this 'ultimately led to a reduced demand for the company's products whilst it was also experiencing increased costs of production in operating its businesses'.
As with the owner, the administrators are 'hopeful that we can find the right buyer or investor to keep the business moving into the future'.
'This is a difficult time for everyone involved, and we will do our utmost to support all stakeholders throughout the process,' Mr Andersen said.
'Our team is committed to ensuring that the process is conducted in a professional and transparent manner, and that all parties are kept informed of developments as they arise.'
Australia's brewing industry has faced serious economic headwinds in recent years, with those affected often blaming the Australian Taxation Office (ATO) for their troubles, along with inflation pressures.
In March, Gold Coast-based Black Hops Brewing went into voluntary administration due to mounting tax debts.
Lotus Beer Co director Scott Hunt (pictured) said the rising cost of rent, ingredients, power and a fall in people spending money had led to the company going into administration
'This decision has not been easy to make, however, the path the ATO has taken with the business has left the company in a position where there was no alternative,' the brewery said at the time.
The award-winning Deeds Brewing in Melbourne also entered into voluntary administration in March.
Since the start of 2024, small and medium breweries including Big Shed, Hawkers and Golden West have all entered administration.
They followed other outfits such as Ballistic, Parched, Wicked Elf and Running With Thieves which collapsed during 2023.
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