The historic West End brewery in Adelaide is to close with the loss of about 90 jobs in what Premier Steven Marshall has described as a very sad day for South Australia.
Brewing company Lion says the 160-year-old business will close in June next year.
However, West End beer will continue to be manufactured interstate and sold locally.
The company says the inner-city facility has been operating well below capacity for some time and is no longer viable.
"We have come to this proposal as the best way to ensure we have a sustainable brewing network for the future," Lion said in a statement on Wednesday.
"Our input costs have continued to rise against this backdrop of declining volume, and a further drop in draught beer sales as a result of the pandemic."
Lion said about a third of its workforce in SA, those involved in sales and sponsorship roles, would stay on.
Those losing their jobs would have access to placement support and a $1 million reskilling program on top of any redundancy payments.
Mr Marshall said South Australians had come to know and love the "iconic" brewing operations.
"It's a very sad day for the workers, it's a very sad for South Australia," he said.
Mr Marshall said the company had not asked the government for assistance and indicated volumes had declined over an extended period of time.
"They've got to make tough decisions. Many companies around the country are having to make tough decisions during this coronavirus," he said.
"What they will be doing though is looking after their employees. They'll get their full entitlements."
Opposition Leader Peter Malinauskas said the loss of the brewery was a blow at a time when South Australia already had the highest unemployment rate in the nation.
"The West End Brewery is a South Australian icon and today we have lost an important part of our social and economic fabric," he said.
I can't help but wonder if more could have been done to save this brewery and save these jobs."
Australian Associated Press