The beloved Carringbush Hotel, a fixture of inner Melbourne, closed its doors Sunday, 2 June, succumbing to the escalating costs plaguing the hospitality industry.
Co-owner Liam Matthews revealed the sobering news, pointing to the exorbitant expenses hitting pubs, bars, restaurants, and cafes especially hard.
“Like most, we are feeling the current financial pinch and instead of running the gauntlet we have decided to go out on a high,” it was announced via Facebook.
Rising Costs: A Grim Reality
The pub employs 20 staff, and wages have surged eight per cent since 2022, now consuming 55pc of turnover, far surpassing the 40pc considered sustainable.
Power bills have climbed to $2000 a month, up from $1500 in 2020, while insurance costs have also risen. Beer deliveries, which were previously free, now cost up to $10 per keg.
The historic 135-year-old Abbotsford pub formerly known as the Friendly Societies Hotel, which reopened in 2019, has capacity for 130-pax and operates a popular meat-free bistro, live music, art shows, weekly bingo, and fruit and vegetable raffles.
To meet costs, Matthews calculated that the price of Mountain Goat lager – the venue’s most popular beer – would need to rise from $15 to $20 a pint, and he says customers are “not ready for that, so we take the hit”.
An attempt to sell the pub’s beer lines for $10k – around a fifth of their estimated value – found no takers.
Broader Industry Crisis
Matthews, aged 47, also runs the Old Bar in nearby Fitzroy. He predicts perhaps a quarter of Melbourne’s hospitality venues could close in the next year, under the weight of rising costs and reduced patronage due to consumers’ own financial struggles.
Inflation-adjusted household consumption has barely grown for five quarters despite rapid population growth, according to the ABS.
Several prominent Sydney venues have closed in the past three months, and financial services and software company CreditorWatch recently predicted that one in 13 hospitality businesses would fail in the coming year.
The closing of the Carringbush Hotel marks the end of an era for a pub that has been a cornerstone of the Abbotsford community, highlighting the severe impact of the current financial climate on the hospitality sector.
“The cost of everything in Australia for hospitality right now is just horrendous,” Matthews told the AFR. “We’re putting more in the till than ever, but what is left over is less than ever.”
