Brewery equipment supplier tanks, leaving some customers empty-handed and looking for alternatives

The sudden collapse of DME has left a lot of brewers in limbo, but some are better off than others.

On November 26 the Supreme Court of PEI appointed Alvarez and Marsal Canada Inc as receiver of DME and its various companies.

The Royal Bank of Canada made the application to appoint a receiver. In the bank’s affidavit it said the bank is owed $18.1 million and that the company defaulted on its loan payments. So far in total, DME owes $27 million to its creditors—which run the gamut from gardening services to law firms. That number is expected to increase.
The deadline for bids from potential buyers is January 7, 2019.

Red Island Cider picked up its completed equipment order in mid-December. Co-owner Robert Hamon said he worked closely with the receiver to make sure that his gear didn’t sit for too long at the DME facility.

“It was a very bittersweet experience,” he said. “The folks at DME are our neighbours and friends and it just wasn’t the same hustle and bustle I’m used to in that building. It was wonderful to see our stuff drive away on a truck knowing we can get going. I truly believe the staff on hand are doing their best in this situation, but I feel for everyone that has been affected.”

Murphy Hospitality Group didn’t fare as well. MHG had two orders in with DME and had paid the deposit for them. “We‘ll be last on the list for the receiver,” MHG president and CEO Kevin Murphy said. “We’ve had to put an order in with a separate company.”

But he said he is hoping to work with DME in the future if a buyer is found and the company can recover from this.
MHG is expanding capacity at its PEI Brewing Company on Kensington Road and is also moving their Halifax Gahan brewpub and installing a new system.

MHG has worked with DME from the very beginning. “It’s a situation of business; it happens. Unfortunately we got caught up in it,” Murphy said.

Earlier this year Murphy said MHG is in the brewing business because of DME.

The company was looking for a local restaurateur to open a brewpub so they would have one of their systems in Charlottetown to showcase to prospective buyers. MHG opened a 3.5-BBL (barrel) system at The Lone Star Cafe on University Avenue. Three years later the company opened the Gahan on Sydney Street with a seven-BBL system with 10 seven-BBL fermenters.

The building had to be reconstructed around the DME barrels at Gahan//Photo credit: Laura Weatherbie/Salty

Montague’s Bogside Brewery was able to pick up its equipment as well.

“Bogside Brewing is one of the lucky breweries—our equipment had been completed prior to DME going into receivership, the staff and receivers worked with me over the last couple weeks and we are now picking up the rest of our equipment this week,” Bogside owner David McGuire told Salty in December. “Many breweries are not as fortunate, and I also wish them the best with the process—hopefully they are eventually able to receive equipment or refunds on deposits paid, small breweries can’t afford to lose funds designated for equipment purchases.”
He said he wishes nothing but the best for the company’s employees and other customers.

“I don’t know the details of the particular business challenges they faced, but I do know they have a great core group of employees that work hard to produce fantastic equipment—I hope they are able to reopen again as soon as possible.”

Bogside is expected to open in March. The brewery is a 10-BBL three-vessel brew house with 20-BBL fermentation vessels and a 20-BBL bright tank.

Ken Spears, co-owner of Copper Bottom Brewing in Montague, said the issues the company is dealing with is a real blow.

“I always felt proud to have DME on our doorstep and with such a strong name in brewing equipment I’m sure the company will re-open,” he said. “Just a matter of ‘when’, I believe.”

His brewery uses DME equipment and while it doesn’t require ongoing support from the company there are other issues.
“Certainly not having a warranty to go to if need be would be problematic,” he said.

He said that should he decide to expand production other suppliers’ equipment is generally compatible.

“Expansion for us means buying new fermentation tanks. These tanks are stand-alone type equipment that does not have to be built on to our brewhouse. Fortunately all brewing equipment uses tri-clamp fittings to join pieces together, this is an industry standard so we can source from other suppliers if need be.”

DME started operating in 1991. It was founded by Peter Toombs from his apartment with only a few people. The company had 350 employees across three manufacturing facilities: Charlottetown; Abbotsford, BC; and Loris, South Carolina.

About Rod Weatherbie

Rod Weatherbie is a writer working in the hospitality industry. He spent a number of years in Toronto as a member of the financial press before returning to PEI. Rod has published one piece of short fiction, one book of poetry, and has had work published in Red Shift, the Antigonish Review, Mitre, and the Toronto Quarterly. He has also recently co-produced, co-directed, and acted in a stage production of old television shows.

He also likes writing about food. Go figure.

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