Cost of living challenges and increased costs has claimed a beloved bar and brewery.
Molly Rose Brewing’s owners announced this week that the award-winning Collingwood venue in inner-city Melbourne has entered liquidation.
Industry advocates expect the bloodshed to continue as high operating costs and upward price pressures force out hospitality operators.
Molly Rose Brewing’s doors will remain closed while liquidator DBA Reconstruction & Advisory decides how to carve the business up among its creditors.
‘We have felt the pinch from both our costs to run the business increasing and our revenue decreasing,’ owner Nic Sandery told Daily Mail Australia.
‘The cost of insurance, electricity, gas, water, freight and brewing raw materials have all increased by more than 30 per cent while at the same time the cost of living crisis has reduced the amount of disposable income our customers have to spend.
‘I know in my household and among my peers we are all going out far less and spending less in order to just get by.
‘At Molly Rose we have seen these pressures directly relate to a reduction in the number of guests we have in our venue but also a reduction in the volume of wholesale beer we sell to other bars, restaurants and bottle shops.’
Molly Rose owner Nic Sandery (left) announced the closure of the popular brewery on Monday
Molly Rose Brewing was crowned best brewery bar by the Australian Bartenders Association last year
Despite the uncertainty, Mr Sandery is hopeful that the Molly Rose brand will ‘live on in some format in the future’.
Molly Rose opened in 2019 and was last year rated Australia’s best brewery bar at the Australian Bartender Awards.
Buoyed by the popularity of its unique brews, the establishment added a second indoor bar along with a beer garden, a lounge and a restaurant in 2023.
Owners cited a 40 per cent increase in construction costs as adding to the bar’s financial pressures, along with ‘rapidly rising’ interest rates.
‘Efforts to mitigate these challenges through cost reductions across wages, production, and logistics were ultimately insufficient in the face of declining consumer sentiment and the ongoing cost-of-living crisis,’ Mr Sandery wrote in a statement.
‘We are working with DBA to make an offer that will hopefully allow us to retain control of Molly Rose and to continue to keep serving you great beer and food.
‘Whatever way this lands, I am very proud of what the Molly Rose team has created. It truly is something special and unique.’
Customers were devastated to learn of the brewery’s demise.
Molly Rose (pictured) is the latest in a slew of brewery closures across Australia
‘So sorry to see a favourite beer go, my heart goes out to you guys and pray you can keep the place going as it was too good to not be around,’ one wrote.
Another added: ‘The government needs to step in here and do something to support this industry. Too many are going by the wayside, it’s unacceptable.’
A third wrote: ‘One of Australia’s most talented brewers who’s created some of the tastiest beers I’ve had the pleasure of consuming.
‘Hoping you find a way for the Molly Rose brand to survive as it would be a great loss to our industry & the Collingwood community.’
Molly Rose is the latest local brewery to fold under economic conditions described by the Independent Brewers Association (IBA) as ‘death by a thousand cuts’.
Deeds Brewing, another locally-lauded Victorian tap room closed in recent weeks along with Kaiju Beer in February
The onslaught isn’t just limited to the Garden State.
Mr Sandery said efforts were made to ‘mitigate’ the financial challenges before closure
One of Brisbane’s oldest and most influential brewpubs, Newstead Brewing Co closed the doors to its Milton shop last month while Sydney’s Rocks Brewing Company entered voluntary administration in October.
In the two years to February, the IBA estimated more than 47 Australian breweries had entered voluntary administration or liquidation.
A downturn in consumer demand arising from cost-of-living challenges are among the more recent challenges, but advocates claim the problem goes deeper.
In a report published in February, the IBA cited low competition and alcohol taxes as among the leading challenges faced by the industry.
An estimated 83 per cent of all beer brewed in Australia is produced by two foreign-owned companies: Carlton United Breweries, owned by Asahi and Lion, owned by Kirin.
Consumer advocate groups have called on the ACCC to launch a supermarket-style inquiry into the outsized market share of the two companies.
‘The lack of competition in the beer sector is damaging the economy,’ wrote the IBA.
‘It is hurting our nations cohort of small independent brewing businesses, stifling entrepreneurship and innovation, creating a roadblock to productivity, and limiting consumer choice.’
Meanwhile, the alcohol excise, referred to as the ‘beer tax’ has been increased in line with inflation 84 times since since it was introduced in 1983.
While Labor has pledged to freeze the beer tax for two years if it wins government in the upcoming federal election, the savings would reduce the average cent of a mid-strength pint by less than a cent.
Opposition leader Peter Dutton has since announced his government would do the same making good on an earlier pledge by Coalition treasury spokesman Angus Taylor.
