By Andrew Starke
Barons Brewing has joined forces with Independent Liquor Group (ILG) to build a $30 million domestic brewing facility in ILG’s Sydney warehouse.
The strategic alliance hopes to allow both parties to capitalise on operational profitability while possibly also signifying the birth of a major new player in the local beer market.
“The retail liquor market is crying out for another serious competitor and the Barons/ILG brewery will be there,” said Barons founder Scott Garnett. “ILG is one of the most respected distributors in the industry and this partnership is going to have a serious impact on the future of the beer business.”
By locating the brewery at the heart of the ILG distribution centre, Barons expects to realise significant benefits in terms of reduced logistics expenses and time to market.
Barons will build, own and manage the brewery, while ILG will provide the site and distribution.
The venture will enable both companies to produce a wider variety of products at better margins, offer exclusive brands and benefits to ILG members.
“By locating the brewery at ILG, Barons is now in control of its own destiny and will be a serious player in the domestic beer industry,” said Baron’s founding director, Sean Neylon.
ILG President Doug Evans said the partnership would guarantee tremendous expansion opportunities for both companies.
“The brewery gives us the opportunity to offer our members so much more in terms of product, service and competitive advantage,” he said. “It’s a win-win situation for everyone involved, particularly ILG members.”
The Barons Brewery will be built on-site at ILG’s Erskine Park facility.
The $30 million dollar project will have the capacity to produce 250,000 hectoliters of beer per year, and accommodate a 100-200 hectoliter brew house, translating to approximately 3.15 million cases of packaged beer per year.
Based on average industry numbers, if the Barons Brewery at ILG produced 3 million cases in the first year, it would equal $66 million in turnover and $24 million in gross profit.
The brewery will be built by a team of Belgian engineers who will commence work in the first quarter of 2010 with a target to begin brewing by the end of next year.