Mendocino Brewing to close Ukiah taproom amid financial problems

For more than three decades, the Mendocino Brewing Co. taproom has served as a mecca for beer lovers and a place where pioneers of the American craft beer movement visited to learn more about a beverage that has now become ubiquitous across the country.

Originally located in Hopland and later relocated to Ukiah, the taproom was the first brewpub to open in California and the second in the United States after Prohibition. Dean Biersch, who co-founded Gordon Biersch Brewing Co. in Palo Alto in 1988, recalled the “atmosphere that was unbelievable” in the early 1980s for those who were discovering the brewery’s flagship Red Tail Ale and other hoppy beers.

But the taproom, now located in a nondescript strip mall, is closing today with no reason provided by company officials. A customer appreciation day will be held from 3 p.m. to 7 p.m. with $2.50 pints and $1.50 Polish sausages, according to a listing on its Facebook page.

The closing comes as Mendocino Brewing Co., which has been mired in financial straits in recent years, is in discussion with an investor to help rescue the company, said Michael Laybourn, brewery co-founder who is still a board member. Its Ukiah brewery is located about a half-mile away from the taproom.

“If it happens in the right way, he will save the company,” Laybourn said of the investor, which he did not name but said was from Northern California. The company also operates a brewery in Saratoga Springs, New York.

The brewery has fallen on hard times under its chairman and indirect majority shareholder, Vijay Mallya, who bought the company in 1997. Mallya lives in London and is fighting extradition to India on charges of fraud and money laundering, according to news reports.

Past company filings with the U.S. Securities and Exchange Commission detail the company’s cash crunch. Catamaran Services Inc. in Delaware loaned $2.6 million to Mendocino ?Brewing over a three-year period through June 2017 in addition to interest costs of $301,686, according to documents.

The filings also indicate that Mendocino Brewing would pay a ?$500,000 promissory note along with interest to Catamaran by Jan. 17.

In a 2016 SEC filing, the company noted it was reliant on Catamaran and United Breweries Holdings, an Indian public limited company where Mallya serves as chairman, for continued debt financing.

“However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern,” according to the filing.

The company’s chief financial officer, Mahadevan Narayanan, did not respond to multiple requests for comment. The company’s stock closed at 20 cents a share Friday in over-the-counter trading.

Columbia Distributing, an Oregon-based beer wholesaler that operates a facility in Santa Rosa, still has inventory of Mendocino Brewing bottles and is selling its beer to retailers, said spokeswoman Lindsi Taylor.

The label is available at Bottle Barn in Santa Rosa, but Mendocino Brewing has not been able to deliver certain seasonal beers that it had produced in the past, said Zach Long, the store’s beer buyer.

Given its history and tradition, Long said he hoped someone could rescue the brewery, noting that both Speakeasy Ales & Lagers and Magnolia Brewing Co., two San Francisco breweries, were saved by investors within the past year as they neared insolvency.

“We have customers coming in and wanting the Red Tail Ale,” Long said.

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.