Iconic Melbourne pub closes due to soaring costs

A popular Melbourne pub has announced that in order to survive it would have to charge a whopping $20 a pint and has instead decided to close permanently.

The Carringbush Hotel closed its doors for good on Sunday after being renovated and reopened in 2019.

The Melbourne institution announced on Facebook on May 27 that it was closing its doors for good after five and a half “incredible years.”

“Like most people, we are feeling the current financial squeeze and instead of running the gauntlet, we have decided to quit with a good feeling,” the post said.

“We have the best staff, locals and regulars and thank you all for everything. We would love to welcome as many of you as possible for a massive party this week and then again on Sunday for some Bloody Marys on our last day of trading.

“Starting today, we are no longer accepting reservations. Only spontaneous guests. Our menu is slowly thinning out and the taps are running dry.”

Liam Matthews, co-founder of the Carringbush Hotel, said the current cost of everything in the hospitality industry was “appalling”.

“We have brought in more money than ever before, but there is less left than ever before,” he told the Australian Financial Report.

He said labor costs have risen 8 percent, causing them to eat up 55 percent of revenue; electricity bills have shot up to $2,000 a month, a $500 increase from four years ago; and beer deliveries are no longer free, with the pub now charging $10 a keg.

Mr Matthews had calculated that the only way to survive was to raise the price of the pub’s most popular beer, Mountain Goat Lager, from $15 to $20 a pint.

“The customer is not willing to do that, so we have to bear the costs,” he added. The breweries and delivery companies are under similar pressure and pass the costs on to us, but we are the bottom of the chain.”

Earlier, an industry insider had sounded the alarm, saying burdensome taxes and a massive drop in demand would bring breweries to their knees, warning that the recent collapse of Melbourne’s Deeds Brewery would not be the last to rock the industry.

A number of other independent breweries have filed for bankruptcy in the past year, including Brisbane-based Ballistic Beer Company, Adelaide-based Big Shed Brewing, Melbourne-based Hawkers Brewery, and Sydney-based Wayward and Akasha Brewery.

Nick Boots, an industry consultant at The Business of Beer Consulting and Advisory and former managing director of the popular Stone & Wood brewery in Byron Bay, said rents and other costs were “unsustainable”.

“Excise tax and overhead costs such as electricity and malt have increased by more than 20 percent in the last two years,” he added. “Breweries like Deeds have struggled to pass these increased costs on to customers.”

Matthews predicted that a quarter of all Melbourne’s hospitality businesses could go bust next year, at a time when a recent report warned that one in 13 Australian hospitality businesses will face bankruptcy in the next 12 months as non-essential spending dries up.

In Melbourne, a celebrity chef announced he would close his restaurant La Luna after 25 years in business, admitting that Melbourne is a “tough city” for business.

In April, Asian fusion restaurant Gingerboy was forced to close after 18 years in business, citing “market pressure since the Covid lockdowns.”

Across Australia, the hospitality industry has already succumbed to the pressures of the cost crisis.

The hotel group BCN Events Group, which also owned the Lumiere Culinary Studio cooking school and the popular Café Mica, was forced into liquidation in May. All seven companies ceased operations immediately and 90 employees were affected.

In Sydney, the popular restaurant Lucky Kwong, headed by cult chef Kylie Kwong, announced its closure

Meanwhile, Botswana Butchery, a chain that operated upscale steak restaurants in three cities, went bankrupt, with debts of over $23 million and more than 200 employees laid off.

Numerous other restaurants have joined the growing pile of corpses, including the Japanese chain “Sushi Bay”, “Elements Bar and Grill” and three branches of the Sydney restaurant chain “Bondi Pizza”.

Read related topics:Melbourne

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