By Amelia Ball

Woolworths and Gage Roads have signed an agreement that will see the retail giant acquire a 25 per cent stake in the boutique Western Australian brewer.

The agreement will also see Gage Roads contract brew 350,000 cases for Woolworths each year if the offer is successful. It will also see Woolworths acquire the 25 per cent share through a placement of 76.4 million fully-paid ordinary shares to raise up to $1.9 million.

Gage Roads CEO Nick Hayler said the company was delighted to welcome Woolworths as a major shareholder and customer.

“We are very pleased to have attracted the interest and support of such a well-recognised company in Woolworths,” he said. “This is a win-win situation for all parties.”

Under the arrangement, Woolworths Liquor Group general manager Steven Greentree would also become a non-executive director of Gage Roads.

Planning has already started to maximise Gage Roads brewing capacity, with the supply agreement presenting the brewer with the opportunity to substantially grow its current production volume and realise a greater economy of scale.

It follows the recent announcement that Gage Roads is moving to a self-distribution model after May 22 when its current agreement with VOK Beverages will end.

The Fremantle-based craft brewery has a range of beers, including the Gage Roads IPA, Pils, Premium Lager, as well as the Wahoo Ale, London Best and the low-carb Kutt.

Gage Roads will hold a general meeting in late June at which shareholder approval will be sought for the placement.

Gage Roads shares were trading at 5.5 cents at midday today (May 15) compared to 4.5 cents seven days ago

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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