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What’s going on with Anarchy Brew Co?
Newcastle’s Anarchy Brew Co has been acquired by Northern Bar Management in a deal that has saved the troubled company from administration. db investigates what’s next for the business.
The beer and bar business, which was founded initially as Morpeth Brewery Limited by husband and wife team Simon and Dawn Miles and operated for just one year before changing its name to Anarchy Brew Co, recently collapsed owing more than £500,000 to creditors, according to Companies House and has now set up under another company name in its new guise as Anarchy Beers Ltd.
Anarchy Brew Co appointed joint administrators at FRP Advisory at the start of the month, but had already run into troubles with both its finances and its questionable conduct over the past few years following its co-owner being accused of homophobic behaviour when he made offensive comments during a beer tasting and has been thwarted with rumours from across the sector over the firm’s stability.
The brewery business has historically been known for its IPAs such as Blonde Star, Junkyard, Skin Deep, Flat Out and Citra Star.
According to the administrators’ report, 25 businesses looked into the company details when it was put on the market, but only four offers came in with Northern Bar Management Ltd securing the deal for just £65,000.
Following the pandemic, the business also reportedly fell into financial difficulties after being unable to pay back loans and financial obligations on top of rising supplier costs.
Reports have outlined that the trouble began when directors of the company took out Covid support loans and used tax deferrals to manage finances. FRP Advisory has since put together estimates with a breakdown, showing the shortfall owed to creditors stands at approximately £492,413 and an additional £158,016 still being owed to HMRC.
Many in the sector with debts currently unpaid by Anarchy are set to lose out with 22 businesses in the industry, including malt and hop suppliers, still being owed thousands of pounds. To add clarity, Companies House has shown that the debt stands at £507,780 while assets available for creditors stands at just £85,960.
Revealing more about what happened, the administrators’ report stated: “The directors considered that the company had weathered most of the issues in relation to Covid turnover reduction. However, the repayment of Covid period liabilities alongside current liabilities continued to significantly impact cash flow. This was further exacerbated during 2023 and early 2024 because of reduced customer demand due to the ‘cost-of-living crisis’ alongside increases in operating costs due to higher utility bills and supplier costs. Whilst every effort has been made by the directors to manage the position by negotiation with key creditors and cutting costs where possible, the position has become financially unmanageable.”
The new owners have since revealed that a new company has been formed, now named Anarchy Beers Ltd, to essentially take over the brewery and has since reassured that all staff – which include a dozen full time members – will retain their jobs as part of the takeover. Amid the turmoil there have also been other statements made by the new owners claiming that a new investment into the business is also due to be made, despite previous suppliers still awaiting payment for debts incurred over the last year.
Anarchy Beers Ltd, which names Kleo Tabaku and Mark Thomson as co-owners, is now reportedly planning to update the brewery’s tap room event space with “new features” that will be implemented soon to refresh the business’s image.
A spokesman for the company revealed: “The entire team of 12 at Anarchy Brew Co have been moved to the new company which will allow us to ensure continuity in the supply of Anarchy beers to all of its customers. We are delighted to have been able to save this amazing brand and also to retain its dedicated and knowledgeable team and we are committed to helping Anarchy grow and take its rightful place in the craft beer scenes.”
A source close to the scene however said that rumours surrounding the former business were rife in the sector and said that there were concerns over “the poor treatment of staff” as well as “not taking responsibility for homophobic comments made” and “even going so far as to send letters from their solicitors trying to intimidate former employees from speaking out about their experiences” and “emotionally blackmailing staff into working illegally whilst furloughed”.
Anarchy has been contacted by db regarding the rumours, the buyout, supplier debts as well as the new company’s plans to invest in its taproom, however the business has so far remained silent on disclosing further details.
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