Sydney's Malt Shovel Brewery is set to be shut down after more than three decades, with its multi-billion-dollar owner citing cost-of-living pressures and shrinking beer market as the reasons for its decision.
The brewery in Camperdown, in Sydney's Inner West, is run by brewing giant Lion and produces the company's James Squire beers, as well as other craft labels Little Creatures, Eumundi and New Belgium.
Lion told staff at the venue that it was proposing to shut the brewery down at the end of August.
"It's been a tough time for all players in the Australian beer industry – with overall volumes declining by 100 million litres since 2019, continuing a long-term decline in consumption of beer," Lion Australia managing director James Brindley said.
"There have also been ongoing cost of living pressures reducing discretionary spending, and continuing increases in costs like energy, labour and ingredients, as well as government excise, which is now the third-highest in the world."
Malt Shovel Brewery was established by Chuck Hahn in 1988 as the Hahn Brewery before Lion took control of it five years later.
"It has played a pivotal role in pioneering the craft beer movement in Australia – introducing Australian consumers to a diverse range of beer styles, including pale ales, porters and stouts," Brindley said.
"It is now best known for the James Squire range, but was also the birthplace of Hahn."
Production of James Squire, Eumundi, New Belgium and Little Creatures will be shifted to other breweries in Lion's network should the company go ahead with closing Malt Shovel.
Lion is one of two major brewers in Australia alongside CUB.
Both are owned by Japanese parent companies – Kirin paid $3.3 billion for Lion (then Lion Nathan) in 2009, while Asahi took over CUB for $16 billion in 2019 – and together control about 80 per cent of the local beer market.
The proposal to shut down Malt Shovel comes as a number of much smaller, independent breweries face financial troubles of their own.
Wayward, located just down the road from Malt Shovel, went into administration in January.
While it and other beer makers have survived that process through restructuring arrangements, others, such as Melbbourne's Deeds Brewing, have collapsed entirely.
