CRAFT beer fans have shared their devastation after a popular brewery in Huddersfield announced its intent to appoint administrators.
Magic Rock Brewery, the maker of IPAs such as Cannonball and Magic Haze, has reportedly hired lawyers from Fladgate to help oversee the process.
It comes after Company House filings showed the brewer’s next accounts made up to December 31 2022 are more than a year overdue, a report in The Grocer said.
Usually, a notice of intention to appoint administrators helps troubled businesses explore rescue options or protect them from creditors’ demands.
This process can offer some breathing space for troubled firms but it also means the firm is still at risk of collapse.
Administration is when all control of a company is passed to an appointed licensed insolvency practitioner.
It doesn’t necessarily mean the end of the business.
Instead, administrators will try to help a company find ways to repay debts or solve its cash flow problems.
It follows an announcement last October by Magic Rock’s parent group In Good Company that it would put its sister brewery Fourpure into liquidation.
At the time the firm blamed market pressure in the drinks and hospitality industries for the closure, having already closed its taproom in London a few months prior.
In Good Company, which owns a number of craft beer brands, acquired Magic Rock in 2022.
It was previously owned by Lion, an Australian food and drink firm, and originally founded by Huddersfield businessman Richard Burhouse in 2012.
Magic Rock operates two taprooms around the Huddersfield area.
The Sun has contacted In Good Company and Fladgate for comment.
News of the notice has devasted craft beer fans with many taking to social media to share their frustration.
One local said: “So sad, this is why we need to look after each other.”
While another added: “We’re gutted. Such a great place for us to go as a family with such a nice vibe to be able to meet with friends.”
It comes amid a tough period for the food and drinks sector.
In November, fellow craft brewer ORA Brewing said it closed its taproom in Tottenham, London.
The Carlsberg Marston’s Brewing Company (CMBC) also closed its Wolverhampton’s Banks’s Brewery late last year.
TROUBLE FOR UK HOSPITALITY
MANY Food and drink chains have been struggling recently as the cost of living has led to fewer people spending on eating out.
Businesses had been struggling to bounce back after the pandemic, only to be hit with soaring energy bills and inflation.
Multiple chains have been affected, resulting in big-name brands like Wetherspoons and Frankie & Benny’s closing branches.
Some chains have not survived. Byron Burger fell into administration last year, with owners saying it would result in the loss of over 200 jobs.
Pizza giant, Papa Johns is shutting down 43 of its stores soon.
Tasty, the owner of Wildwood, said it will shut sites as part of major restructuring plans.
Why are retailers closing stores?
RETAILERS have been feeling the squeeze since the pandemic, while shoppers are cutting back on spending due to the soaring cost of living crisis.
High energy costs and a move to shopping online after the pandemic are also taking a toll, and many high street shops have struggled to keep going.
The high street has seen a whole raft of closures over the past year, and more are coming.
The number of jobs lost in British retail dropped last year, but 120,000 people still lost their employment, figures have suggested.
Figures from the Centre for Retail Research revealed that 10,494 shops closed for the last time during 2023, and 119,405 jobs were lost in the sector.
It was fewer shops than had been lost for several years, and a reduction from 151,641 jobs lost in 2022.
The centre’s director, Professor Joshua Bamfield, said the improvement is “less bad” than good.
Although there were some big-name losses from the high street, including Wilko, many large companies had already gone bust before 2022, the centre said, such as Topshop owner Arcadia, Jessops and Debenhams.
“The cost-of-living crisis, inflation and increases in interest rates have led many consumers to tighten their belts, reducing retail spend,” Prof Bamfield said.
“Retailers themselves have suffered increasing energy and occupancy costs, staff shortages and falling demand that have made rebuilding profits after extensive store closures during the pandemic exceptionally difficult.”
Alongside Wilko, which employed around 12,000 people when it collapsed, 2023’s biggest failures included Paperchase, Cath Kidston, Planet Organic and Tile Giant.
The Centre for Retail Research said most stores were closed because companies were trying to reorganise and cut costs rather than the business failing.
However, experts have warned there will likely be more failures this year as consumers keep their belts tight and borrowing costs soar for businesses.
The Body Shop and Ted Baker are the biggest names to have already collapsed into administration this year.
