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The Mosgiel Memorial RSA restaurant and bar are to close, four years after the club's complex was redeveloped at a cost of $1.2 million.
Mosgiel RSA chairman Peter Amyes yesterday said they could not continue to trade unsustainably.
Major Amyes yesterday announced the closures, given dwindling membership, and amid tough trading pressures for many RSA club hospitality activities around the country.
The hospitality arm's closure was a "proactive, managed exit'', and not a receivership or liquidation, and reflected higher operating costs and an unsustainable commercial operation.
"Sadly, the writing is on the wall for the restaurant and bar, and we are facing, and dealing with, that reality.
"We can't, however, and won't, make any final decisions until we've heard from our people and teased out their ideas for what the future could look like,'' he said.
Staff and key stakeholders had been advised, and had also been encouraged to participate in an upcoming consultation to determine the club's direction.
The move to close the restaurant and bar comes only four years after the completion of the $1.2 million redevelopment of the complex in Church St, where the previous "beer barn'' look was replaced with a livelier cafe-style approach, and a modern restaurant.
Maj Amyes said the club remained in an overall sound financial position, and only about $200,000 in debt remained from the redevelopment.
The restaurant, bar and related matters had incurred a loss of about $50,000 in the financial year to June 30 last year.
But unaudited accounts for the 2018-19 year indicated larger operating losses, he said.
It is understood these may amount to $100,000 or more.
RSA national president BJ Clark said the Mosgiel board had taken a "responsible'' approach to safeguard the organisation's underlying welfare purpose.
RSA Otago-Southland district president Jenepher Glover said the closures were "very sad'' but reflected a "sensible''approach, and she remained positive about the future.
Community groups using the premises include two Age Concern Otago-supported Steady as You Go sessions a week, and a weekly Tai Chi session - all part of a Falls Prevention initiative.
Maj Amyes said the RSA intended the groups continue to use the facilities.
But, after the restaurant closed on May 11, the classes would need to operate during the bar's winter operating hours - from Wednesday to Saturday. These hours apply until the end of June.
The bar would close permanently at the end of June.
An information evening for members would be held on May 13, and members' consultation meetings were scheduled for May 22, 23 and 29.
Feedback would then be considered by the board, and the 1300 members would later vote on their preference.
Redundancies among the 12 employees were "likely inevitable'', but final decisions could not be made until staff, members and key stakeholders had been consulted on the club's future direction.
It is understood employee contracts make no provision for redundancies.
Maj Amyes said we "must remember that the heart of our purpose remains providing support services for our serving and returned military''.
All possible support would be offered to staff, he said.