In sudden turn, Smuttynose Brewing Company to be auctioned by bank in MarchBy KIMBERLEY HAAS
Union Leader Correspondent
January 18. 2018 11:07AM
HAMPTON — The local business community is standing behind the owner of Smuttynose Brewing Company after he announced the facility will be sold at a bank auction on March 9. On Thursday morning, Smuttynose owner Peter Egelston cited growing competition from upstart brewers for the company's financial problems.
"The company's financial models were based on 20 years of consistent growth, but the explosion of microbreweries has led to changing dynamics in the marketplace. This dramatic shift occurred just as Smuttynose committed to a major infrastructure investment with the construction of the new production facility," Egelston said in a statement.
Site work began on the LEED-Gold certified facility at Towle Farm in Hampton in 2010. It was opened to the public in May of 2014.
The number of craft breweries in the Granite State has grown to about 70, Many of the smaller players joined the ranks over the past five years, thanks to changes in state law in 2011 that lowered financial barriers for "nano" breweries.
The craft brew scene on the Seacoast has been exploding in recent years. Nineteen breweries, including Smuttynose, are listed as members on the Chamber Collaborative of Greater Portsmouth's website.
Last year, the chamber created a map to help locals and tourists navigate breweries in Portsmouth, Somersworth, Newmarket, Exeter, Rollinsford, Hampton, Newington and Dover. Kittery and York, Maine, breweries were mentioned.
Smuttynose and Egelston's second company, The Portsmouth Brewery on Market Street in Portsmouth, were included. That brewery and restaurant are not part of the auction.
Chamber President Valerie Rochon said Thursday they have been working with Egelston and there is a great deal of respect in the business community for him.
"Peter is a good businessman, but you have to account for timing," Rochon said.
Rochon said they hope new owners will retain the 68 people who work for Smuttynose.
"We hope they keep all of the employees on staff and continue to brew really good brew," Rochon said.
Gov. Chris Sununu said the company's strength lies in its dedicated and engaged employees. "They have been a strong and reliable community partner throughout the years, and I hope the new owners, once determined, will appreciate their hardworking employee base by committing to keeping these manufacturing jobs in New Hampshire," Sununu said in a statement.
The brewery is capable of producing 75,000 barrels a year.
The sale includes the Smuttynose brand, it's production facility, neighboring Hayseed Restaurant and 13-acres of land.
Egelston and his partner Joanne Francis said they were hopeful that a buyer will step in before the auction, but a source close to the sale said the bank has already taken control of the company and that business decisions are out of their hands.
Bankruptcy paperwork has not been filed.
Provident Bank is managing the auction process. James R. St. Jean of Epping is serving as auctioneer. Delta Capital, of Simsbury, Conn., is the financial adviser.
The auction is scheduled for 2 p.m. March 9 at 105 Towle Farm Road in Hampton.
Terms of the auction include a $250,000 deposit by cash, certified check, or bank check to bid. Closing is to take place within 55 days.
Smuttynose continues to produce beer. Parties expect they will do so until the date of closing, according to the auctioneer's note.