HAMPTON — Locals were disappointed to learn last week that Smuttynose Brewing Co. was heading for the auction block in March, the company facing financial troubles its owners said were too much to bear.
The brewery fell into financial struggle after opening its $24 million state-of-the-art facility at 105 Towle Farm Road in 2014. It is behind on paying property taxes and bills, according to town and court records. It will be put for sale at a foreclosure auction March 9, 24 years after founder Peter Egelston opened the brewery in Portsmouth. Egelston in an interview last week said the company was generating $10 million in revenue but struggled to pay all its costs.
Come March 9, Smuttynose will owe the town $159,907 in back taxes including interest for the years 2017 and 2016, $120,513 of which is owed for last year, according to a tax statement from the Hampton tax collector's office. The town is expected to receive what it is owed from whoever buys Smuttynose as part of the purchase, according to Hampton tax collector Donna Bennett.
"It's a small portion when you take into consideration the entire town, but it's a big individual bill," Bennett said.
Vendors have claimed in court that Smuttynose never paid bills for equipment the brewery purchased. Two companies filed civil suits against Smuttynose in the last year, and litigation in both cases is ongoing.
Johnson Controls, Inc., a Wisconsin-based company that claims it sold HVAC equipment to Smuttynose, filed a civil suit in September seeking $120,431 it says is owed by the brewery for the purchase. Zajac LLC, a process piping and packaging company in Saco, Maine, filed a civil suit this month, claiming Smuttynose owes it $39,785, for products it sold the brewery.
Town officials who learned of the auction and Smuttynose's financial troubles were sympathetic. "My heart is with Peter and his employees," Selectman Phil Bean said this week "Any time a business with employees experiences difficulty in the town of Hampton, everybody in Hampton is extremely concerned, to include town leadership."
Local brewers praised Egelston and Smuttynose for helping lay the groundwork for New Hampshire's craft beer industry, which has since flooded the Seacoast with microbreweries, nanobreweries and brewpubs. Egelston said the boom in craft beer created competition that wore down Smuttynose and factored into its financial struggle.
"Peter and Joanne (Francis, Egelston's partner) are really the pioneers of the current craft beer scene here," said Nicole Carrier, co-owner of Throwback Brewery in North Hampton, "paving the way to make all of our journeys so much easier."
Annette Lee, co-owner and brewer at Throwback Brewery in North Hampton, got her start in brewing as an intern at Smuttynose about 10 years ago. She saw the internship as an opportunity to test her brewing skills after acquiring her brewer's certificate, and she said her experience with Smuttynose was a main reason for her pursuing her career path.
"I care (about) and respect those guys, and we've all looked up to what they've done for the brewery community in New Hampshire," Lee said.
Smuttynose was known for investing in the community through sponsorships and philanthropic work. Egelston was at one point on the advisory boards of the New Hampshire Charitable Foundation and Currier Museum of Art.
Hampton Area Chamber of Commerce President John Nyhan said Smuttynose has been a valued chamber member that helped sponsor events and was known for community outreach. Smuttynose held its 10th annual Rockfest Half Marathon & 5K race at Hampton Beach last year.
"I think it's a real sad story," Nyhan said. "However, I'm confident that whoever will take Smuttynose over will have the same community involvement philosophy as Peter and his management team had."