The council invited entrepreneurs Tom Skipper and Stuart Duckworth to participate in the Qingdao International Beer Festival in China last year, in a bid to woo Chinese tourists and investment to South Australia.
The company lost more than $1.1 million staging the rebadged Royale Adelaide Club at the festival.
According to the pair, Chinese officials, including Qingdao’s Mayor, promised there would be 50,000 visitors per day to the site.
The Royale Adelaide Club budgeted for 7000 visitors per day; average attendance was 700 people per day.
Skipper and Duckworth say they have had to place “certain companies”, including Royal Croquet Club Adelaide and its parent company The Social Creative, into voluntary administration because of the losses.
The massive storms that caused South Australia’s state-wide blackout last year also severely affected The Social Creative event the Good Fortune Market, during the OzAsia Festival – adding to the losses.
“The weather’s bad luck, but we’ve copped bad faith and bad decisions as well. It’s been the year from hell,” Duckworth said.
“However, we’re willing to do everything in our power during the voluntary administration process to help rectify the situation and continue to contribute to SA’s vibrancy agenda, as we have done so over the past four years.”
Skipper and Duckworth hope to be able to stage the Royal Croquet Club event again during next year’s Adelaide Fringe.
But they have warned 400 casual jobs, seven full-time jobs and a total contribution of $8 million to the South Australian economy would be lost if The Social Creative goes under.
According to The Social Creative, Chinese authorities gave assurances they would waive all duties and taxes relating to imported goods for the Royal Adelaide Club event – but this never occurred, meaning “hundreds of thousands of dollars” had to be spent releasing SA food and wine from customs.
The company also says Chinese authorities did not follow through on an agreement to pay for power and water, while “constant delays from the Chinese led to a majority of third-party sponsorships never materialising”.
“All that combined made the event a black hole for us,” said Skipper.
“My passport was reported to authorities – I was effectively detained – and only when we managed to raise additional funds from a supporter who helped to pay our Chinese creditors were we allowed to exit the country.”
Duckworth told InDaily this morning the decision to place the companies in voluntary administration was “definitely a blow … [but] it’s not the end”.
He said the decision was the best way to ensure creditors were repaid debts, and the best hope of the companies resurfacing.
Duckworth said the companies’ events had attracted more than one million patrons over the past four years – “we are very proud of that” – adding he and Skipper intended to learn “very hard lessons” and come back stronger.
“We’ve got some very real options we are working through [in] this voluntary administration process,” Duckworth said.
“We’re not going to throw up our hands and just say it’s too hard now.
“I’m not pissed off with anyone … I’m disappointed with the situation.”
He added that “it would be remiss of us not to acknowledge our part in it”.
“There definitely wasn’t one thing or group [… that created the situation]; it’s just been a combination of things.
“[But] do I feel let down? Absolutely.”
Duckworth presented to a meeting of the Adelaide City Council mid-last month spruiking plans for an Alpine Winter Village event for Victoria Square.
He said the family event was now not going ahead – but that TSC was in negotiations with Renewal SA, and there was still hope it would return.
He said “it would not be the best to specify” what his companies owe individual creditors.
Asked whether TSC owed the Adelaide City Council any money, Duckworth said it did not – but that there had been a discrepancy in a bill owed to the tune of about $7000.
He said that money was being paid today.
A council spokesperson told InDaily this afternoon that: “The City of Adelaide appreciates and recognises the great events that the Social Creative and The Royal Croquet Club put on and the people and activity that these events bring to the city.”
“The Royal Croquet Club and the Social Creative have quickly become a key element of Adelaide’s dynamic festival program as well as a key element of city activation.
“[The] council has worked closely with them over many years to provide support for their events and to give them the best chance of success.”
The spokesperson added that the council “is not in a position to comment on outstanding monies from any of its contracting parties as such information would be deemed commercial in confidence”.
“We wish them all the best in working through their current difficulties.”
Property Council SA executive director Daniel Gannon told InDaily: “If Adelaide’s vibrancy agenda is contingent upon the success or failure of one company, then we should be concerned about its depth.
“However, this isn’t the case. Whilst it’s unfortunate for the company in question, Adelaide’s vibrancy is a collaborative effort across multiple sectors and bats deeper than one.
“Could it be stronger? Absolutely.
“But for that to happen, we need a bigger residential population in the CBD with more businesses and job opportunities.”
Make your contribution to independent news
A donation of any size to InDaily goes directly to helping our journalists uncover the facts. South Australia needs more than one voice to guide it forward, and we’d truly appreciate your contribution. Please click below to donate to InDaily.