Iconic Melbourne pub closes due to soaring costs

The 135-year-old pub announced the “taps were running dry” as it succumbed to “horrendous” expenses.

A popular Melbourne pub has revealed it would need to charge a whopping $20 for a beer to survive and instead has opted to shut forever.

The Carringbush Hotel closed its doors permanently on Sunday after it underwent a makeover and reopened in 2019.

The Melbourne institution announced on May 27 its was closing its doors for good on Facebook after five and a half “amazing years”.

“Like most, we are feeling the current financial pinch and instead of running the gauntlet we have decided to go out on a high,” its post read.

“We have the best group of staff, locals and regulars and to all of you, thanks for everything. We would love to see as many of you as possible this week for one hell of a huge party, then again on Sunday for a few Bloody Marys for our last day of trade.

“From today we will not be taking any more bookings. Walk-ins only. Our menu will slowly wind down and the taps are running dry.”

The Carringbush Hotel in Abbotsford with (left to right) co-owner Liam Matthews, head chef Roxanne Olsen and manager Katie Drane back in 2020. Picture: Ian Currie

Carringbush Hotel co-founder Liam Matthews said the current cost of everything in hospitality was “horrendous”.

“We’re putting more than ever in the till than ever, but what is left over is less than ever,” he told the Australian Financial Review.

He said wage costs had jumped by 8 per cent resulting in them eating up 55 per cent of turnover, power bills had soared to $2000 a month rising by $500 compared to four years ago and beer deliveries were no longer free with the pub slugged $10 per keg.

Mr Matthews had calculated that the only way to survive was to raise the pub’s most popular beer Mountain Goat lager from $15 a pint to $20.

“The customer is not ready for that so we take the hit,” he added. The brewers and deliverers are facing similar pressures and pass costs on to us, but we’re the end of the line.”

Horrendous price rises forced The Carringbush Hotel to close. Picture: Facebook

It comes as an industry insider sounded alarm bells that onerous taxes and a massive drop in demand was driving breweries to their knees warning the recent collapse of Melbourne-based Deeds Brewery won’t be the last to rock the sector.

A number of other independent breweries have gone into administration in the past year including Brisbane-based Ballistic Beer Company, Adelaide business Big Shed Brewing, Melbourne-based Hawkers Brewery and the Wayward brand and Akasha Brewery, both from Sydney.

Nick Boots, an industry consultant from The Business of Beer Consulting and Advisory and previously the general manager of popular Byron Bay brewery Stone & Wood, said rents and other costs were “unsustainable”.

“Excise tax and overhead costs like electricity and malt have increased more than 20 per cent in the last two years,” he added. “Brewers like Deeds struggled to pass on these increased costs to drinkers.”

Breweries are also under pressure. Picture: Supplied

Mr Matthews predicted that a quarter of hospitality venues in Melbourne could fail in the next year, coming at a time that a recent report warned that one in every 13 Australian hospitality businesses face going bust within the next 12 months as discretionary spending dries up.

In Melbourne, a celebrity chef revealed he is shutting down his restaurant La Luna after 25 years of operation, admitting Melbourne was a “tough city” in which to do business/

In April after 18 years in business, Asian fusion restaurant Gingerboy shut down blaming “market pressures since Covid lockdowns”.

The Carringbush Hotel said it was winding down its menu. Picture: Facebook

Across Australia, hospitality business have already succumbed to the squeeze of the cost crunch.

Hospitality group BCN Events Group, which included cooking school Lumiere Culinary Studio and popular cafe Mica, collapsed into liquidation in May, with all seven of its business ceasing to trade immediately while 90 staff were affected.

In Sydney, popular restaurant Lucky Kwong, headed by iconic chef Kylie Kwong, announced it was shutting down

Meanwhile the Botswana Butchery chain which operated as a high-end steak restaurant across three cities went bust, with debts of more than $23 million and more than 200 staff sacked.

A number of other restaurants have joined the growing pile of corpses, including Japanese chain Sushi Bay, Elements Bar and Grill and three stores in Sydney restaurant franchise Bondi Pizza.