Administrators of Tyne Bank Brewery have revealed the company had liabilities of more than £350,000 before its assets were sold to new owners earlier this month.
The Byker craft beer business - which had contracts with the likes of Morrisons, the Co-op and National Trust, and had won numerous national awards - ran into difficulties following Covid restrictions that crippled the hospitality industry in 2021. New documents show administrators from FRP thought the company had "clear potential for growth" before its former director was forced to call them in when footfall at its Walker Road taproom and orders from pub customers failed to recover and incurred major losses.
New owners Olly Bennett and Matt Daniels - directors of the Inn Hospitality Group - recently acquired the brewery for £70,000 via a company called Project Barrel Ltd and have spoken of plans to continue trade with a new events focus for the Brewery's Victorian warehouse premises.
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In 2015/16 the brewery launched a successful crowdfunding campaign which saw some 347 investors - described by administrators as "loyal supporters of the brand" - acquire 17% of the £350,000 turnover business. But FRP say it is unlikely the shareholders will receive any money.
Project Barrel's acquisition of Tyne Bank has saved around 10 jobs, and brought hope that its renowned craft beers will continue to be brewed. Speaking previously to BusinessLive, Mr Bennet said the company planned to contact smaller investors, who he said were also valued customers of the brewery and would welcome their involvement in the new business.
Tyne Bank is known for beers such as Silver Dollar and Monument, and had grown considerably since it was first set up by former chemical engineer Julia Austin in 2011. Since then brewery had established deals with major supermarkets, including a more recent agreement with ASDA and saw its beers served at Newcastle International Airport's bars. The Walker Road taproom was also open to the public.
Describing events leading up to the administration including the use of an extended Bounce Back Loan and tax deferrals, FRP said: "Following the pandemic and after all restrictions were lifted, trade started to return but did not return to the pre pandemic levels the Company had experienced in 2018 and 2019. As such, the company was struggling to keep up to date with ongoing liabilities whilst repaying the arrears that had accumulated during the pandemic.
"In December 2021, the director sought advice from FRP to understand the options open to the company as cashflow was being stretched. The director considered that if the company could trade through Christmas that it would have sufficient funds to continue. Two 'Time to Pay' arrangements were agreed with HMRC which further supported the business however, this still wasn't enough to keep the business going long term.
"The director considered selling the business and started a marketing exercise however, no offers were forthcoming. The director's cashflow projections showed that in the coming weeks the company would not have sufficient funds to meet ongoing liabilities."
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