Brewery Closure and Rescue Options
Running a brewery comes with its unique set of challenges, from fluctuating customer demand to the high costs of operations, including rent, wages, and supply chain expenses. As these pressures mount, it’s crucial for brewery owners, like you, to understand the options available, whether considering closure or exploring ways to keep the business afloat.
This guide is designed to help you navigate the complexities of insolvency, offering practical advice tailored to the brewing industry. With the right knowledge, you can make informed decisions about the future of your brewery, whether it involves restructuring, refinancing, or winding down operations.
Common financial challenges for breweries
We can help advise on specific financial issues your brewery may be facing, including but not limited to:
- Supply chain disruptions
Breweries are often dependent on a steady supply of raw ingredients from distinct natural locations, which means a disruption to the company supply chain can quickly lead to shortages in stock, negatively affecting cashflow. We can discuss formal repayment plans that can help navigate these shortfalls. - Operational audits
A brewery’s operational success can often be dependent on the ability to identify inefficiencies. Whether it’s energy consumption in brewing processes or wastage in packaging, small improvements can lead to significant cost savings. These are common cashflow problems that can lead to insolvency. We can help you assess whether your company is solvent and advise on the best procedures moving forward. - Staffing adjustments
Breweries rely on heavily skilled employees and brewers, keeping important staff during difficult moments can be crucial to keeping the company trading. We understand the importance of ensuring that staff understand their redundancy pay entitlements and how a Transfer of Undertakings Protection of Employment rights (TUPE) would work during company restructuring. - Finance negotiations
Breweries tend need big spaces to operate and often need substantial start-up loans to cover equipment costs. If your brewery is struggling with finance payments, we can help discuss these terms in a formal repayment plan. - Bounce Back Loans (BBL)
The government-backed Bounce Back Loan Scheme was a lifeline for businesses during the COVID-19 pandemic. However, many companies are now facing challenges in repaying these loans. We can guide you through your repayment options and explain how a Bounce Back Loan is treated in different insolvency scenarios.
How we can help rescue your brewery
Below are two formal insolvency procedures, which would allow your brewery to continue trading whilst being protected from creditor action:
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A Company Voluntary Arrangement (CVA) is a structured repayment plan that enables businesses to manage their unsecured debts through affordable monthly payments to creditors. Spanning for up to five years, upon completing a CVA the remaining unsecured debts at the company will be written off. By entering your brewery into a CVA, the procedure provides your company with protection against creditors, giving directors the opportunity to continue with trade and to maintain the company’s strong brand and reputation, whilst slowly reducing the debt level.
More on Company Voluntary Arrangements - Restructure your company through administration
By placing your brewery into administration, it will be in a temporary state of protection that enables the business to continue trading. As licensed insolvency practitioners, we will take on the role of administrator, aiming to rescue the company as a going concern. This may mean restructuring the business, streamlining operations, making staffing changes or finding new investment. The administrator will also consider exit strategies from administration, whether that be a potential sale of the business, assets, the whole company, or transitioning to an alternative insolvency procedure.
More on administration
How we can help close and liquidate your brewery
If your brewery is insolvent and creditor pressure has reached a level which means the business cannot continue to trade, the formal liquidation of your brewery would draw a line under its operations and write off its unsecured debts.
- Close your brewery down via a Creditors Voluntary Liquidation (CVL)
A CVL is a formal insolvency procedure for companies that are insolvent. By entering into a CVL, your brewery would cease trading and once closed, would end all of the company’s obligations. The process would see your brewery’s assets realised, while terminating outgoing payment agreements like loans and leases. Once the procedure is finished, any unpaid unsecured debts will be written off. If eligible, yourself as a director and employees will be able to apply for statutory entitlements such as redundancy and holiday pay. If the company cannot afford to pay staff entitlements, claims can be made through the Redundancy Payment Services.
More on Creditors Voluntary Liquidation - Close your brewery down and start again via a Pre-pack Liquidation
A pre-pack liquidation is an informal term for a type of liquidation where a company pre-purchases the assets of an existing company that is then liquidated. If your brewery were to enter into a pre-pack liquidation, it would allow you to continue its core business in a new limited company, without any historical unsecured debts associated to the previous company. With minimal disruption to the business’s brand, customer base and operational activity, the new limited company can retain essential assets, such as tanks, fermenters and raw materials and under TUPE regulations, you can also transfer key employees. In some cases, you may be able to reuse your company’s trading name, but this can be complex. We can advise you on these processes and how it works.
More on Pre-pack Liquidation
Commercial finance for brewery companies
If your company has steady cash flow but is at risk of being impacted by a significant upcoming payment, commercial finance could provide the support you need. There are several financing options that can help you manage one-time expenses or cover shortfalls in revenue. Contact us to explore the best commercial finance solutions tailored to your company’s situation.
More on commercial financeHow to get in touch with us: The next steps
If your brewery company is facing financial difficulty it’s important to understand the different closure and recovery options available. Our initial advisers will offer a comprehensive explanation of the different options available to you and our experienced consultants will look at tailoring our processes to your company’s circumstances.
Contact our initial advisers, who can advise you on your company’s solvent position and outline the options best suited to its circumstances.
- Speak with our initial advisers
Contact our team via phone or online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or what alternative options are available. - Formally engage with Wilson Field
After your consultation, if there is an appropriate route forward, we will issue the relevant documentation for you to formally engage us.
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