Treasurer Josh Frydenberg has blamed the demise of the historic West End brewery in Adelaide on the irrepressible rise of craft beer.
More than 90 jobs will be lost when Lion closes the 160-year-old business in June next year.
Mr Frydenberg said the closure was sad for South Australia but also a sign of the times.
"What we're starting to see across the beverage market and particularly with beers is we've seen a rise in craft beers - 700-plus craft beers - around the country," he told reporters in Adelaide on Thursday.
"And the per capita drinking of beer has actually come down over time."
West End beer will still be manufactured interstate and sold locally.
Lion said the inner-city facility has been operating well below capacity for years and was no longer viable.
About a third of its South Australian workforce, including sales and sponsorship staff, will stay on.
Sacked workers will be given help reskilling and finding a new job on top of their redundancy payments.
The company did not ask for government assistance before deciding to board up the brewery.
Mr Frydenberg said there would always be "churn" in the labour market but there would continue to be plenty of jobs in the beer sector.
"There will always be some businesses that open up and some businesses that close," the treasurer said.
"But if you go back to when West End started, there were a heap of beers that are now on tap at pubs right around this state that were not even invented back then.
"We are seeing right across the sectors in the economy - including in the hospitality sector, including in the beer market - new products coming online and new jobs being created as a result."