Mounting debts forced the owners to appoint WA Insolvency Solutions as liquidators on Monday.

Local creditors, excluding shareholders, are owed approximately 20 per cent of the business’s outstanding debts.

Company spokesman Simon Bairstow said it was very regrettable the Tanglehead venture had failed.

“The owners had a vision to bring a micro-brewing and restaurant concept to Albany and had high hopes of success,” he said yesterday.

“However, the current economic crisis and general difficulties being experienced broadly by the hospitality industry meant the business wasn’t able to recover.

“The directors have been working to secure additional capital to allow the business to continue to trade, but we weren’t able to source the amount required.”

Mr Bairstow said Tanglehead shareholders had invested more than $1.7 million into the business since its inception three years ago.

“It was one of the largest investments in hospitality in Albany since the construction of the Esplanade Hotel,” he said.

“Perhaps the investment in an innovative hospitality business came too early for the people of Albany.

“But the shareholders had hoped the creation of a high-quality hospitality venue would encourage the people of Albany to get out and support a sustainable hospitality business.

“This has definitely happened to some extent, but the level of investment required has not been sustainable.

“The shareholders hope that as the economy improves, the local community continues to grow their support for all Albany’s hospitality operators and develop a thriving hospitality culture in the Great Southern.”

The Tanglehead premises is owned by the White Star Hotel, which is also one of the major creditors.

The Tanglehead liquor licence would revert to the White Star landlords under WA’s liquor licensing laws.

Mr Bairstow said the owners hoped to negotiate the purchase of Tanglehead’s stock and plant with the liquidator and re-open to trade as the White Star Hotel as soon as possible.

The management met with Tanglehead’s 20 staff on Tuesday morning and outlined the situation.

“Most of the existing staff will be re-employed by the new operators, although roles might alter slightly,” Mr Bairstow said.

“The intention of the landlords is to continue operating the bar and restaurant, continue brewing beer and thoroughly assess the business over the next few months.”

The liquidator will contact creditors over the next week.