An Aussie brewer and spirits manufacturer has gone down the gurgler, joining a growing list of businesses to shut their doors because of the cost-of-living crisis.
Mighty Craft, which owns a 33 per cent share of Better Beer, has collapsed into administration after it scrambled to get out of financial trouble.
On its website, Mighty Craft states it is one of ‘s leading and fastest growing premium craft drinks companies.
The company was listed on the ASX only five years ago and was once worth $1.8 million.
Mighty Craft had been desperately trying to keep afloat by seeking a merger, selling assets and brands and slashing its board and management.
Insolvency firm Ankura has been appointed as administrators of Mighty Craft.
Investors were told administrators were making an ‘urgent assessment’ of the company’s situation, with the management and board.
The majority of Mighty Craft’s revenue is through its 33 per cent ownership of Better Beer.
Comedians Jack Steele and Matt Ford of The Inspired Unemployed have a 46 per cent stake in Better Beer.
Co-founder Nick Cogger owns 18 per cent of Better Beer, which launched in October 2021.
Mr Cogger said the administration proceedings of Mighty Craft is just ‘business as usual’ for Better Beer.
‘At some point in the future someone or a company will put forward a DOCA (deed of company arrangement) and we will likely have a new shareholder on our register,’ Mr Cogger told Business News in a statement.
‘We are looking forward to officially separating from Mighty Craft in the coming months.’
Accounts reveal Better Beer has been a strong performer, despite the slump in the craft beer market.
In the six months to December 31, sales increased by 32 per cent to $26.1 million.
A proposed merger between Mighty Craft and Better Beer now looks like it won’t happen.
‘The company has been undergoing a divestment and restructuring program to reduce the company’s debt,’ the company announced in a statement to the ASX.
‘Fundamental to this program was a proposed merger between Better Beer Holdings Pty Ltd and MCL (Mighty Craft), an arrangement that required the support of MCL’s senior lenders and the shareholders of Better Beer.’
Mighty Craft falling into administration is the latest shock for the craft beer industry.
Late last month, popular Melbourne brewery Alchemy Brewing announced it was closing down.
Lion, one of the largest beverage companies in the world, will close the Malt Shovel Brewery in Sydney’s Camperdown by the end of August after more than three decades.