By Ian Neubauer
Craft breweries in Western Australia have denied reports of financial strife, saying downturns in their share prices are the result of macroeconomic forces and not indicative of market performance.
Chief among them is Gage Road Brewing, whose shares have lost more than half their value in the last six months, dropping from 13 cents in January to 5.5 cents this week.
Gage Road CEO, Nick Hayler, told TheShout the drop is consistent with overall loses on the stock exchange and insisted the brewer is comfortable in its financial position.
“If you compare our share price against other stocks, their value relates to those of the major blue-chip companies,” he said. “It’s got nothing to do with the value of our business or outputs. It’s something we cannot control because the value of all shares are going south.”
Hayler questioned reports that formed a correlation between Gage Road’s downward-sliding stock and those of microbreweries in the state.
“It’s unfair to compare us to companies like Empire [Beer Group] and Oz Brewing. Empire is about pubs; they have a tiny brewery. And Oz Brewing don’t bottle anything,” he said.
The Empire Beer Group last month suffered the loss of acting CEO, Brendan Cocks, who left “to pursue a new employment opportunity”. His resignation coincided with a review of the company’s strategic direction, asset portfolio and the consideration of new business opportunities.
Empire has seen its stock tumble from 19 cents in January to 5.5 cents today, and is currently trying to raise $600,000 through the issue of convertible notes for brand redevelopment and capital works projects for two of its venues. Empire was not available for comment.
Oz Brewing, whose share price has dropped from 10 cents in January to 4.5 cents this week, was also unavailable for comment.
But Little World Beverages director, Howard Cearns, maker of the Little Creatures family of beers, said the craft end of the premium beer market is doing well.
“The premium end of the beer business is very healthy. The market has been growing for quite some time now,” he said.
Little World Beverage is the only publicly listed brewer in WA whose shares have appreciated this year, up from $1.42 in January to $1.50 this week.
“Our share price has held up because we are well established and have built an experienced business team,” Cearns said. “There are not that many talented people in this part of the industry.
“As for the brewers that are in trouble, it’s difficult to say, as many of those companies are newly listed. But the reality is this is a tough game because there are some very strong mainstream players in the business.”
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