In 2015, Dereck and Diti Hales took a leap of faith, leaving their corporate careers behind to establish Bad Shepherd Brewing in Cheltenham, located in southeast Melbourne. Their venture, a spacious venue offering a diverse range of craft beers on tap, a menu featuring American-style barbecue, and trivia nights on Thursdays, was well-received.
“We’re a small business,” Dereck emphasizes. “This is our life savings. This is our dream.”
Initially, the business was thriving. However, the Hales’ success story took an unexpected turn when the economic landscape shifted.
“Covid hit right when we were a medium-sized business ready to grow,” Diti reflects.
The initial challenge stemmed from pandemic-era debts that became increasingly difficult to manage. Even after lockdowns were lifted, diners remained cautious about dining out, and visits to the brewpub failed to rebound to pre-Covid levels. As time passed, the situation grew more challenging, with rising production costs and interest rates consuming any additional funds that could have been spent on dining out.
In October, Dereck and Diti sought the assistance of an administrator to help them navigate this difficult situation. They were not alone in their struggle.
Craft breweries across the country, after enjoying years of growth, found themselves on the brink of financial hardship. In March, Brisbane’s Parched Brewery voluntarily entered administration, while Sydney-based Tribe Brewing avoided liquidation in April by being acquired by a Kathmandu founder. Running With Thieves in Western Australia also opted for voluntary administration in August.
