Geelong craft brewer Lotus Beer Co, trading as Valhalla, to be wound up following creditors’ meeting

A Geelong craft brewer has been dealt a fatal blow as creditors vote to liquidate the company, with its director saying its failure stems from a costly move to a North Geelong business hub.

Scott Hunt from craft brewer Valhalla. Picture: David Smith

Craft brewer Valhalla claims its expansion into the Federal Mills precinct was the cause of its failure, as the winding up of the company is confirmed.

Valhalla parent company Lotus Beer Co will be liquidated little more than a month after director Scott Hunt placed it into administration due to rising costs and debts exceeding $1.3m.

In the process, it became one of more than 20 craft brewers nationally that has either closed or entered voluntary administration in the past year as the industry faces a perfect storm of problems.

Valhalla’s Scott Hunt in better times. Picture: Mike Dugdale.

Insolvency advisory firm Worrells urgently assessed Valhalla’s viability as trade continued at the Federal Mills site, while the closed Union St taproom in the CBD briefly reopened.

A second meeting of creditors was held this week, where it was agreed that Lotus Beer Co be liquidated, as recommended by Worrells.

In a report to creditors, Worrells said the company was “clearly insolvent” and could have been for two years.

Mr Hunt disputes that time frame and while unwilling to provide an exact amount he personally lost, he said it was in the “hundreds of thousands”.

“We’ve lost as much, probably more, than anyone else on this,” he said.

“We remortgaged our house, took most of the equity out of that.

“We believed in it (the business) … anyone and everyone we spoke to thought it was a great project opening up at Federal Mills.

“But unfortunately the timing was awful, and that’s pretty much what brought the whole thing down.”

Valhalla’s Union St lease has been sold and its Federal Mills landlord – the Hamilton Group – is owed almost $100,000.

Other craft brewers are also owed money, as are finance companies who loaned Valhalla the cash for its equipment.

Valhalla, which launched in 2016, signed its Federal Mills lease in August 2022 when trade at the taproom was booming as cashed-up consumers spent big after Covid lockdowns.

“That was a bit of a false sense of security for the industry,” Mr Hunt said.

The budget of the fit-out ballooned and after it opened in October last year, Mr Hunt said local workers were attending the office only two to three days a week.

And those at work would mostly head home straight after, Mr Hunt said.

“We relied on the after work crowd, particularly in the CBD, that’s why our taproom struggled,” he said.

“Out at the Federal Mills, we expected that a lot of the businesses out there would support us, but we just didn’t see that.

“Friday night in particular, we really thought that would be a big thing out there, but it wasn’t.”

Scott Hunt at Valhalla’s now closed Federal Mills brewery in North Geelong. Picture: Brad Fleet.

In a last-ditch effort to save the company, Valhalla raised $100,000 in May via its second crowd-funding campaign.

An earlier crowd-funding round in late 2022 raised well over $400,000.

The Independent Brewers Association has warned of many issues facing the craft beer sector, most notably the twice-yearly CPI-linked beer excise.

Worrells was contacted for comment.

Originally published as Geelong craft brewer Lotus Beer Co, trading as Valhalla, to be wound up following creditors’ meeting