Big Shed Brewing creditors to vote on the company’s future

Big Shed Brewing creditors will vote on the company’s future at a crucial meeting next week, after an outpouring of support for the embattled Adelaide beer company.

Big Shed Brewing Concern’s owners Jason Harris and Craig Basford.

The future of Big Shed Brewing hangs in the balance, with the craft beer maker’s creditors to vote on a proposal to save the business at a meeting next week.

There has been an outpouring of goodwill for the embattled beer company since it was placed in administration a month ago, with retailers including locally-owned Fassina selling the company’s beer at a discount, at their own cost, and other breweries such as Little Bang Brewing Co. putting Big Shed beers on tap for sale.

Big Shed was founded by Craig Basford and Jason Harris in 2002 in the Barossa Valley. It moved to Royal Park in 2013 and then to new, expanded premises on Old Port Rd, also in Royal Park, in 2019.

The pandemic hit just 90 days after that venue was opened, and the creditors’ report published this week by Heard Phillips Lieberenz shows the company has not made a profit for the past four financial years, although it was in the black for the first seven months of this financial year, up until the end of January.

The administrators’ report said the company has boosted sales in each of the past three full financial years, but despite that growth, was trading at a loss until recently.

Summer is also the peak sales period for the company, helping it to profitability over this time.

“The company reported significant and sustained losses since the financial year ended 30 June 2019, coinciding with the implementation of an extensive growth plan that involved relocating to larger premises to facilitate business expansion,” the creditors’ report said.

The administrators estimate the company has debts of $4.2m in total, with the directors themselves loaning more than $1.3m to the business to keep it afloat.

The Australian Taxation Office is also claiming to be owed $583,318.

Heard Phillips Lieberenz’s report said following news of the company being placed in administration, there was strong support from retailers and consumers, with sales surging by 19.2 per cent compared to the same time last year.

“Concurrently, revenue generated from the front of house hospitality area and packaged beverage sales increased by 81.5 per cent,” the report said.

The administrators said they received nine inquiries about buying the business, however no offers “with commercial merit” were received.

The directors will now put a deed of company arrangement to creditors, which, if accepted by creditors, will see them having to write off virtually all of what they are owed.

The directors are proposing to contribute $125,000 into the process, to be paid in stages until mid-2025, which will result in creditors being paid about 7c in the dollar.

If the company was liquidated, creditors would receive nothing.

The creditors are scheduled to vote on the proposal at a meeting to be held on March 20.

Big shed employed 49 people when it went into administration, according to the report.