On November 26, one of North America’s largest and longest-running brewing equipment manufacturers formally ceased operations, following an order issued by the Supreme Court of Prince Edward Island in Canada.
The collapse of Diversified Metal Engineering (DME) spells millions of dollars lost for craft brewers, who paid the company for equipment that has not been, and perhaps will never be, received.
DME was formed in 2016 following the merger of Canadian equipment manufacturers Newlands Systems (NSI) of Abbotsford, BC, and DME Brewing Solutions of Charlottetown, PEI. The joint venture came after the earlier acquisition of DME Brewing Solutions by private equity firm Clearspring Capital Partners one year prior.
The company was placed into receivership on November 26 at the request of the Royal Bank of Canada. The bank is currently owed around $13.5 million plus interest and costs.
As for the breweries, Brewbound lists 10 Barrel Brewing, Anchorage Brewing, Diageo, Foam Brewers, Labatt, Lord Hobo, Maine Beer Co., Monday Night Brewing, Moosehead Breweries, New Belgium Brewing, Night Shift Brewing, Notch Brewing, Tired Hands Brewing, and Wicked Weed, among DMEs numerous creditors.
Speaking to Brewbound, Mahala Guevara, vice president of Texas’ Big Bend Brewing said she believes DMEs collapse will cause “a wave of breweries going out of business or financially restructuring significantly.”
At the time of writing, it is still unclear how things turned so bad so quickly.