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Coca-Cola Amatil spending $46 million to re-enter beer market

Coca-Cola Amatil (CCA) has confirmed it will be re-entering the Australian beer market with a $46 million investment in the Australian Beer Company.

The money, which the beverage giant is lending to the Australian Beer Company, will be used in the acquisition of a state-of-the-art brewery in Griffith, New South Wales, according to an Australian Stock Exchange (ASX) announcment today.

The facility to be acquired by the Australian Beer Company, which is a part of the Casella group, has an annual capacity of 500 000 hectolitres.

Currently, CCA cannot sell, distribute or manufacture beer in Australia until 16 December 2013.

The Australian Beer Company will also refrain from such activities until that date.

After the restraint against CCA expires, the loan will convert into a joint venture equity interest in the Australian Beer Company which will see the Australian Beer Company manufacturing premium beer and developing new brands, while CCA will be solely responsible for the sales, distribution and development and management of customer relationships.

CCA Group Managing Director, Terry Davis said the investment will be a good way for the company to be part of the beer sector again.

“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 beer market in Australia.”

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