Green Man Brewery chairwoman Glenys McKenzie told the Otago Daily Times the company had opted for liquidation after struggling for ''the last couple of years''.
It had been unable to find an answer to the rise of competition in the increasingly crowded craft beer market, she said.
That included competition from those opting to reduce their overheads by contracting out the brewing of their beers to third parties, she said.
''It's pretty hard to compete with people who don't have the overheads we do.''
The company had also fallen victim to a ''blurring of the distinction'' between true craft beers and ''look-alike'' products offered by large, mainstream producers, she said.
The decision to enter liquidation came after talks with a potential international investor - which Ms McKenzie would not name yesterday - fell through.
The decision meant the company's lease of its Grange St brewery and office would cease, she said.
The beer's branding, IP and recipes were owned by a separate company, Green Man IP Ltd, and it was hoped it could yet find a third-party brewer to continue production, she said.
''This is the end of a stage, but as one door closes another door opens.''
In the meantime, the jobs of one fulltime and one part-time staff member were on the line, although their fate was not yet sealed, she said.
Ms McKenzie did not know how long the liquidation process would take but, if a third-party brewer was found, affected staff could continue in marketing and administration roles.
''At the end of that process, those two staff will no longer have employment as they currently do.
''If we are able to come to some arrangement with an appropriate brewery to contract-brew our product, there may or may not be - I really don't know at this stage - a degree of opportunity there.''
Ms McKenzie confirmed creditors were owed money, but could not say exactly how many, or the sums involved.
Asked if it was tens of thousands of dollars, she replied ''yes'' but declined to elaborate until an auditor's report was completed.
''I'm not actually, right at this point in time, in a position to give you a definitive figure.''
She could not yet say if all creditors could expect to be repaid in full.
''What I would like, what I expect and what will happen are not necessarily one and the same.''
The award-winning Dunedin brewery was established in 2006 as New Zealand's first certified organic craft beer producer, and produced a variety of staples and seasonal beers for buyers around New Zealand.
Ms McKenzie said customers would continue to receive product until existing stocks were exhausted, but yesterday's announcement the brewery would close was a sad day for the business.
''We're a small brewery, 13 shareholders - it's all very personal to us.
''It's sad from the brewery's point of view, but I think we have to accept that we have been there and very vigorously and strenuously tried to make that work as an option.
"We have to recognise that in spite of all of their best efforts, and all of the avenues explored, that it isn't a viable option going forward for us.''
