Sydney-based Wayward Brewing Co. and its co-owned distribution business Local Drinks Collective have entered into voluntary administration, seeking financial restructuring to cope with adverse economic conditions facing the craft beer industry.

Local Drinks Collective is jointly operated with Batch Brewing Co, although Batch is not involved in the administration process.

DBA Reconstruction & Advisory has been appointed as the administrator, to assist with a restructure of the combined business. Despite the administrator appointment, ongoing production, distribution and taproom operations will continue as usual.

Peter Philip, founder and sole director of Wayward and Local Drinks Collective, said that the decision to enter administration was made due to financial losses caused by declining consumer demand and increased production costs.

“Cost of production has gone up extraordinarily high over the last couple of years. Cost of cans is up 25 per cent, electricity is up 50 per cent, shipping costs are up 50 per cent, and that’s in an environment where interest rates are creating a lot of pressure on consumers.

“Consumers are having to trim their budget wherever they can and they’re buying cheaper alternatives. That means that independent craft brewers are missing out on sales. It’s this perfect storm of higher costs and lower revenue,” Philip said.

Wayward is working with the administrator on a Deed of Company Arrangement (DOCA) proposal, which will provide a framework for restructure.

“The last few years have been an extremely challenging time across our industry and for the wider economy. However, we are confident that the restructuring will ensure the business is on firm footing and we can look ahead with confidence,” Philip said.

Wayward is one of several craft breweries that have entered into voluntary administration in recent months, including Bad Shepherd Brewing and Dainton Beer, both of which signed DOCAs in November. Amid a difficult climate for independent brewing sector, Philip emphasised the importance of the Independent Brewers’ Association ‘Certified Independent’ seal.

“If people knew how much the independent craft brewing industry was hurting, they would know to turn the can over and look for that seal. That would change the buying decisions, because I don’t think anybody really wants to lose the diversity of beer that we have in this country,” he said.

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