CCA puts $46 million into beer venture

By James Atkinson

Coca-Cola Amatil will invest $46 million into its future Australian Beer Company joint venture with Casella, the company revealed to the ASX this morning.

The ASX announcement came immediately after Casella went public with news of the partnership.

CCA said the loan is a preparatory step towards CCA’s re-entry into the Australian premium beer market and will be used by the Australian Beer Company to assist with the acquisition and expansion of a state-of-the-art brewery in Griffith, New South Wales into a 500,000 hectolitre annual capacity brewery.

CCA is currently subject to a restraint not to sell, distribute or manufacture beer in Australia until 16 December 2013. Prior to that date the Australian Beer Company will also refrain from carrying on those activities. The loan will convert into a joint venture equity interest in the Australian Beer Company after the expiration of the restraint on 16 December 2013.

The resulting joint venture will then be responsible for manufacturing premium beer and developing brands whilst CCA will be solely responsible for the sales, distribution and development and management of customer relationships.

CCA group managing director, Terry Davis said: "This new agreement with Casella will give CCA the opportunity to access a world class, low cost brewery which will enable us to re-enter the premium beer market in Australia after 16 December 2013 with sufficient initial manufacturing capacity to cater to approximately 15 per cent of the premium beer market in Australia."

"CCA’s large scale sales and distribution expertise and experience, combined with the draught and packaged brewing capability of the Australian Beer Company, will provide international beer companies after 16 December 2013 with a uniquely independent route to market in Australia and the ability to partner with the leading non-alcoholic beverages and spirits partner for the licenced trade.”

John Casella, managing director of Casella Wines said: "Today’s agreement also marks an exciting new chapter for Casella and our expansion into the beer category. A partnership with CCA, when it occurs, will give us tremendous scope to grow our brewing operations and we look forward to the exciting opportunities that lie ahead."

Combined with the proposed acquisition of the Fiji brewery and distillery and multi-year distribution agreements with Grupo Modelo, Carlsberg and Molson Coors in the Pacific Islands, CCA said its strategy to leverage its sales and distribution scale into premium beer is well underway.