Hamilton Locke is delighted to have assisted Peter Philip, the founder and director of Wayward Brewing Company Pty Ltd (Subject to Deed of Company Arrangement) and Local Drinks Collective Pty Ltd (Subject to Deed of Company Arrangement) (Companies) on the successful restructure of the much-loved local craft brewery in Camperdown NSW.
On 2 January 2024, the Companies appointed Atle Crowe-Maxwell from DBA Reconstruction and Advisory following a period of financial difficulty that many in the craft-beer industry are presently facing. Changing consumer behaviour as a result of cost-of-living pressures, the higher input costs (both transport and electricity) and the ratcheting government excise imposed on beer (which accounts for up to a third of the cost of beer) have all taken a heavy toll on the craft beer industry. It is the latter issue many in the industry are concerned about as the excise imposed is set to increase every six months and appears in stark contradiction to the Federal Government’s $225m tax relief for small breweries and distillers as part of the 2021-22 federal budget.
The brewery continued to trade during the administration and a restructure plan for the brewery was reached following negotiations with key stakeholders, resulting in the Companies entering into a deed of company arrangement (DOCA), which was approved and executed on 24 January 2024.
Commenting on the transaction, Partner Nicholas Edwards said, “This potential failure is unfortunately a reflection of the current market conditions for a much-loved industry. In this instance, the director worked alongside the administrator and key stakeholders to put forward a rehabilitation plan, through a deed of company arrangement, which was approved by creditors. This sees the brewery continue, employees keep their jobs and consumers able to enjoy the cult beer”.