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By Wednesday, 05 June 2024

Brothers Beer liquidation: Kiwibank, PwC and 45 staff among creditors owed money

Creditors of insolvent Auckland beer and food business Brothers Beer include Kiwibank, Inland Revenue, Coca-Cola Amatil (NZ), 2degrees and many staff owed about $137,000 in wages and holiday pay.

Brothers Beer, Brothers BeerHoldings and Brothers Wholesale slipped from voluntary administration into liquidation last month.

PwC accountants John Fisk and Stephen White have issued their first report naming all known creditors and their addresses - except for staff who are named but other details are kept confidential.

The three companies are themselves owed money: $426,000 appears in the first report so Fisk and White are contacting parties who have debts to the businesses, that once had outlets at the City Works Depot and Commercial Bay.

On employees, the report said Brothers Beer and Brothers Wholesale employed 45 staff on a fulltime, part-time and casual basis but those roles could not be sustained.

Contracts were terminated with 22 employees. Brothers Beer employees are owed $81,000 in wages and holiday pay. A further $56,000 is owed to staff of Brothers Wholesale, totalling $137,000, the PwC report said.

Inland Revenue is yet to file a preferential claim for GST, PAYE or other employee deductions.

The total shortfall to creditors of all three companies remains unknown at this stage.

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Hancocks Wine, Spirit and Beer Merchants of Grey Lynn is named as a creditor along with Northcote’s Canon New Zealand/Canon Finance, ACC, Auckland Council, Bank of New Zealand, Red and White Cellar, Gladfield Malt, Independent Liquor (NZ), Restaurant Hub, PwC, Foodstuffs North Island, Odyssey Wines, Altenzano Coffee, Manukau Enterprises, Windcave New Zealand, Avanti Finance, NZ Post, City Works Depot, Commercial Bay landlord Precinct Properties, Sky TV, UDC Finance and many others.

Back when Brothers Beer operated: Herald business editor at large Liam Dann interviews former Finance Minister Stephen Joyce at Brothers Beer in Auckland for The Economy Hub.
Back when Brothers Beer operated: Herald business editor at large Liam Dann interviews former Finance Minister Stephen Joyce at Brothers Beer in Auckland for The Economy Hub.

Brothers Beer and Brothers Beer Wholesale started operating in 2011 and 2016, managing a brewery and operating seven gastropub-style restaurants across Auckland in what were the good times last decade.

But then it struck financial trouble and the initial administrators’ report told how the business would cease operations at its many Brothers Beer and Juke Joint BBQ sites in Ōrākei, the City Works Depot, Onehunga and Birkenhead.

By that stage, the business had already ceased at Commercial Bay.

Pre-pandemic, Brothers Beer was popular and had expanded hospitality outlets, going from one to seven, that report said.

But when Covid hit, the brewer and pub manager could not operate those venues due to lockdowns, and that significantly hit their financial position.

Then inflation began to take its toll, creating further pressures as well as rising costs that hurt margins.

The PwC accountants talked to suppliers and the group’s secured lender. Non-performing hospitality sites were closed immediately and staff were redeployed where it was possible. Some redundancies were required, PwC said.

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Last year, White and Fisk were appointed to the group’s three entities as administrators and they said in September they hoped to be in a position to put a “credible” restructuring proposal to creditors for a vote.

“The objective will be to deliver a better outcome for them than if the group is simply liquidated,” White said at the time.

Brothers Beer was founded by Anthony Browne and Andy Larsen who sold their products through their venues and to supermarkets and liquor stores.

In its heyday, it had about 200 flavours and styles on offer and the businesses reportedly employed about 70 staff.

Last year, the Herald published its craft beer power list: the brokers who launched a beer revolution and the challenge with the froth coming off.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.

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