Melbourne's Bad Shepherd enters Voluntary Administration

Founders Dereck and Diti Hales

The owners of Melbourne’s Bad Shepherd Brewing Co. have announced the decision to appoint an Administrator to help facilitate a financial restructuring of the business.

Owners Dereck and Didi Hales have appointed DBA Advisory as Administrator, noting the company is supporting the continued operation of the business

“Bad Shepherd’s employees and customers should consider it business as usual,” the company said via a media statement.

“There will be no impact to ongoing production and hospitality operations as a result of this appointment.”

The Hales said they have taken this step to deal with the financial losses the business has faced over the last few years from the COVID-19 pandemic and lockdowns and are working with the Administrator on a Deed of Company Arrangement (DOCA) proposal to provide the framework for the restructuring of the business.

The couple say they are confident the financial restructuring will result in a stronger and more resilient business emerging from administration.

“This has been a difficult period for the business, but we see this as an opportunity to reset and look forward to better times ahead,” Dereck said in the statement.

“Bad Shepherd Brewing Co. remains committed to maintaining a high standard of service and open communication with all stakeholders during this restructuring process.”

Brews News understand no staff have been affected and the business continues to trade.

Bad Shepherd is the latest brewery to seek to restructure through Voluntary Administration, with businesses including Ballistic, Easy Times and Parched Brewing using a DOCA arrangement to sell or continue to trade following business restructure.

Brews News understands that many breweries are currently struggling with excise debts incurred during COVID, when the Australian Tax Office allowed a deferment of excise and other payments. Trade since then has not picked up leaving many breweries with significant excise debts that they are struggling to repay.

An administrator’s report looking at Western Australia’s Running With Thieves Brewery, which went into Voluntary Administration in August, has revealed its parent company owed the ATO more than $3.5 million at the time it called in Administrators.

The ATO, which has been a significant creditor in many of the Voluntary Administrations affecting the brewing industry, notably voted against Ballistic’s DOCA in March.

This week the Australian Tax Office issued a media release cautioning businesses to “engage with their tax and super obligations to avoid having their debts disclosed to credit reporting agencies” in a move that could impact many business’ credit ratings.

“As the ATO shifts back to business-as-usual debt collection, as of July 2023 it has issued Notices of intent to disclose business tax debts to more than 22,000 businesses with a tax debt of at least $100,000 that is overdue by more than 90 days,” the ATO said in a statement.

More than 9,000 businesses are expected to have their debts disclosed this month.

ATO Assistant Commissioner Jillian Kitto said paying or engaging with the ATO is the only way to stop a business’s tax debt becoming visible in credit rating checks.

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