CUB buys Australian craft brewer Balter
Australia | It is a ridiculous amount of money. Allegedly, CUB paid between AUD 150 million and AUD 200 million (USD 140 million) for craft brewer Balter, which could be selling 50,000 hl beer this year.
As with previous takeovers by AB-InBev/CUB, the sum will be payable over five years and ultimately depends on whether certain sales targets are met.
On a per hl basis, Balter fetched far more than the current going rate for craft brewers in the United States. According to analysts, when AB-InBev took over the rest of Craft Brew Alliance (CBA), which it did not already own in November 2019, it paid USD 290 per barrel for the whole lot. Even the growing Hawaiian beer brand Kona, CBA’s biggest seller, was valued at only USD 445 per barrel.
Founded by professional surfers
But then, Balter is no regular craft brewer. It was founded in Currumbin, Queensland (some 100 km south of Brisbane) in 2016 by four professional surfers, the world champions Mick Fanning and Joel Parkinson among them. Its beers, designed by the former Stone & Wood head brewer Scott Hargraves, have won plenty of prizes.
Because of its illustrious founders, Balter has been talked up as a takeover target basically from day one. Serious rumours about an impending sale were flying round in late November, only to be substantiated one week later, on 5 December 2019, by a sales announcement.
The sale is to benefit Balter’s founders, plus more than 45 individuals, who are mostly friends and family. Many had thrown their life savings into this venture and hadn’t really got much back except for some free beer.
CUB is in between owners
Balter will join CUB/Asahi’s stable of craft beer brands, including Mountain Goat, 4 Pines, Pirate Life, Green Beacon and the recently resuscitated Matilda Bay (under Phil Sexton’s stewardship).
It is funny that CUB, Australia’s major brewer, should be clinching a deal right now. After all, CUB is technically in-between owners. Its previous owner AB-InBev sold CUB to Japan’s Asahi in July 2019 for AUD 16 billion (USD 11.3 billion). The transaction is still pending approval by the regulator but could be completed in the first quarter of 2020.
Market observers criticise that CUB appears to be mindlessly spending its marketing budget on whatever comes along in terms of craft brands. Besides, they point out that the administration of so many different small craft breweries, which were taken over by CUB and Asahi over the past couple of years (4 Pines, Pirate Life, Green Beacon), will be a complete nightmare.
CUB plans to take Balter national next year. Therefore, it will need to expand Balter’s brewery, to enable it to produce 200,000 hl beer per year.
At the moment, there are more than 600 craft breweries operating in Australia. The Independent Brewers Association, a trade body, says that the independents enjoy a 10 percent market share by value and 6 percent share by volume.
