West Coast Brewery owner calls out Government after being forced to sell up due to COVID-19 border closure

Shawn Rayson says the situation for West Coast Brewery has become "untenable".
Shawn Rayson says the situation for West Coast Brewery has become "untenable". Photo credit: Getty / Supplied

A Canadian businessman says the New Zealand Government is failing to walk the talk on helping Kiwi companies through COVID-19, after strict border restrictions saw him barred from the country and forced him to put his South Island brewery up for sale.

Shawn Rayson, 51, is selling West Coast Brewery in Westport after just two years of ownership. He says the coronavirus pandemic - and the Government's handling of it - has made running the company a nightmare.

Since COVID-19 made landfall in New Zealand, Rayson has seen his five-year plan to break West Coast Brewery into the Australian and Asian markets totally scuppered amid a faltering global economy and significant logistical challenges.

Part of the issue is the Toronto native has been unable to even get into New Zealand for over a year, due to tight COVID-19 border regulations preventing non-residents from entering the country.

He's also been left frustrated by Customs after they threatened to put West Coast Brewery into liquidation over unpaid debts - a move that could put the sale of the business in jeopardy.

'The potential was so significant'

Rayson, a former Canadian parliamentary employee who worked for Kim Campbell during her successful run for Prime Minister in the 1990s, bought West Coast Brewery on September 19, 2019, after an 18-year stint doing business in China.

Having originally planned to open a cidery just out of his home city of Toronto, he was convinced by a contact in China to look into investing in Kunekune cider, a beverage produced by West Coast Brewery.

West Coast Brewery is located in Westport.
West Coast Brewery is located in Westport. Photo credit: Supplied

But Rayson's vision for what could be achieved expanded the more he investigated the opportunity - and he ended up going the whole hog.

"When I got looking at this project, I said to the people in China 'why don't we just buy the brewery?' because the production potential was so significant for the millennial market in China," he explained.

"They said 'I don't think it's for sale'. And I said, 'well, everything's for sale, you just have to find out what the price is and the point you need to address'. And I ended up negotiating to buy the brewery."

As a newcomer to the industry, Rayson put together a board of directors featuring "several individuals of note" - including Rick Fitzgerald, the Canadian chairman of one of the world's largest distilleries in Diageo, and Stephen Maher, the former CEO of Carlsberg China.

And they got to work; PricewaterhouseCoopers was brought in to develop an export strategy, the base of the brewery was replaced, a rebrand was carried out and a team was deployed to prepare for a product launch on foreign soil.

West Coast Brewery had planned to launch their Green Fern Organic and Miners Black lager just before COVID-19 hit.
West Coast Brewery had planned to launch their Green Fern Organic and Miners Black lager just before COVID-19 hit. Photo credit: Supplied

The idea was for a five-year plan that would see the company base their product in New Zealand - because "anything from New Zealand is globally perceived to be a premium product: green, clean, pristine, high-quality" - before expanding internationally.

Australia was the first country the brewery wanted to move its Green Fern Organic and Miners Black beers into, with Singapore, Vietnam and ultimately China being added in the following years.

But just ahead of their Australian launch, COVID-19 struck and everything went haywire.

COVID-19 pandemic brings 'year of hell'

In a decision he now regrets, Rayson took the last flight out of Christchurch to Toronto via Sydney and Dubai on March 19 last year.

Like many countries, Rayson's native Canada has been battling COVID-19 outbreaks. Toronto alone has seen more than 100,000 cases and been in lockdown for months - albeit a less stringent version than we've seen in New Zealand.

The combination of Toronto's lockdown and the New Zealand Government's strict COVID-19 border regulations, which make it very difficult to get into the country if you're not a resident, have left Rayson trapped and frustrated.

Toronto, where Rayson hails from, has seen more than 100,000 cases and had several lengthy lockdowns.
Toronto, where Rayson hails from, has seen more than 100,000 cases and had several lengthy lockdowns. Photo credit: Supplied / Getty

While Prime Minister Jacinda Ardern's move to shut the borders has largely been vindicated as the right course of action, with every community outbreak here suppressed as other countries have faltered, Rayson says it's rendered him unable to run the West Coast Brewery.

"It's just been months on end and I haven't been able to get back to New Zealand, I haven't been able to deal with the business there," he said.

"I had thought that I would be able to get back to New Zealand in maybe February [2021]. We thought [the border restrictions] might change but no… your borders remain closed indefinitely."

Rayson describes his experiences over the last 12 months as "a year from hell".

He says he's been left with no alternative but to put the business up for sale for $1.138 million.

"We have been severely affected by it; it's very difficult to keep pumping money into a company when you physically cannot be on the ground - it's a nightmare," he said.

"Add the pressures of ongoing business, and it is a disaster. We worked very hard on rebuilding the base of the brewery, the business model, rebranding and developing a business plan to take the product to Australia followed by Singapore, Vietnam and China.

"Now due to COVID and border closures, we are forced to sell. Whoever buys the brewery will have a gold mine, without question."

Foreign business people should be let back into NZ - Rayson

Rayson understands Prime Minister Jacinda Ardern's decision to close the border to non-residents, but says it's now time to open the borders up to international business people once more.

He's not alone in his fight. Some of New Zealand's most powerful business leaders have also demanded the Government lay out its plan to open up international travel again to boost the economy.

The group argues it's time to prepare for a future which manages COVID-19.

"What we're trying to do is to get into a better place in a year, so we're not just in a foxhole, fighting, still having the battle - we've actually won the war," Auckland Airport and Chorus chair Patrick Strange told RNZ.

Until then, Rayson's options are limited. He's been speaking with the High Commissioner in Ottawa about getting back to New Zealand, but it's proven to be a dead-end.

Immigration NZ confirmed to Newshub that Rayson has applied for a specific purpose work visa but as he's offshore, the application isn't being processed at the moment due to border restrictions.

Like all non-residents who hope to enter the country, Rayson must meet the criteria for the 'other critical worker' visa.

This category is restricted to those with technical or specialist skills not easily obtainable in New Zealand, those performing a time-critical role in an approved project or those whose presence here would have "significant wider benefit to the national or regional economy".

The Government has come under fire recently for letting the likes of The Wiggles, the cast of The Lion King musical and RuPaul's Drag Race Down Under into the country under the category.

Rayson says it appears getting into New Zealand is "next to impossible - unless you're The Lord of the Rings".

"The problem with that is that you can say, 'OK, well, Lord of the Rings invest millions and millions and millions of dollars. But why are their millions more important than our million or 2 million?" he asks.

"That's not right; either your borders are closed to everyone or it's open to business people, but you must meet the criteria. I would have been happy to quarantine, I would have been happy to stay in a Government-mandated hotel.

"Even if it cost $5000 for a week, I would have paid it because that would have been the criteria. I can't tell [the Government] how to do their criteria, but at least it would have been fair."

Rayson acknowledges the Government's wage subsidy programme was "a big help", but questions whether more could have been done to help businesses - especially those with foreign owners.

"I'm not blaming [anyone], nobody planned this. But I think in this type of situation, people can try and help you through it," he said.

"New Zealand needs investment and it's a great place to invest - people are great, good rule of law, good government, a good place to make products. It's got all the boxes you can check off, it meets all the criteria, but this current situation is untenable.

"It's just been a real struggle as an international business person. I know the Government is saying that they're doing everything they can for businesses - I get that.

"But the problem we run up against is when they say 'go to the bank', we guarantee a loan for up to 80 percent, even though we can show them fixed assets of, say, half a million dollars. And we only wanted $100,000 and they won't give it to us."

Part of his annoyance is with Customs, who he says have threatened to put West Coast Brewery into liquidation over an outstanding amount of $40,000 - despite the business being up for sale for over a million dollars.

Rayson says if Customs follows through with their threat, it will kill any deal for the business.

Richard Bargh, Customs Group Manager of Revenue and Assurance, says the Government agency has helped over 350 businesses impacted by COVID-19 manage their Customs-related debt - the vast majority of which are successfully managing their tax obligations.

He says over the last year, more than 99 percent of all due excise has been paid by businesses as expected.

"Customs is conscious that those who do not pay the due excise on time have an unfair market advantage over their competitors, and for that reason it is important that outstanding debt is managed equitably," Bargh explained.

"Customs continues to work with some clients to help them manage their outstanding debt, and takes all reasonable and practicable steps to help the business maintain operations. However, there are a small number of businesses … who have been unable to satisfactorily meet their payments.

"In those cases, after all other options have been worked through, Customs may use statutory powers to ensure that due revenue is paid."

If the sale of the business goes through - and Rayson is hopeful it will by the end of March - he wants to have another crack at doing business in New Zealand, albeit in a different part of the country.

For now, he's just hopeful his story might "wake the Government up" and see other overseas owners of Kiwi companies allowed back into New Zealand - before they take their business elsewhere.