Carlton & United Breweries has announced that Balter Brewing Company is “set to join the CUB family”.
The acquisition comes a week before the Australian Competition and Consumer Commission is scheduled to announce on December 12 whether it will approve Asahi’s proposed $16 billion buyout of CUB.
It follows rumours of a sale swirling around the industry over the past fortnight.
Balter Brewing Company was founded in 2016 by a group of childhood friends including professional surfers Mick Fanning and Joel Parkinson.
Since then, the business has experienced strong growth and won major awards including the number 1 spot for the last two years straight in the GABS Hottest 100, Australia’s most prestigious craft beer awards.
It was also named 2019’s Most Distinctive Craft Beer at the Australian Drinks Awards.
Balter Brewing Company CEO and co-founder Ant Macdonald said: “We’re proud to have grown the business to this point and we see the benefits this new partnership will bring as Balter enters its next growth phase.
“This deal will help us achieve our sustainability goals, upgrade capacity and hospitality at our Gold Coast brewery and create new jobs.
“We refused to compromise on our culture or our beer as part of this deal. It’s a testament to CUB that they didn’t want us to. They have an amazing track record of allowing craft brands to thrive while keeping their identity and we’re thrilled to join the CUB stable.”
Co-founder Mick Fanning said: “From day one we’ve tried to not only brew the most delicious beer but create a brand that was fun and inclusive – something the Aussie public would be proud to call its own.
“We’re stoked Balter has connected so well with Aussies and we can’t wait to continue our journey with CUB and get good beer into the hands of more beer lovers.”
CUB CEO Peter Filipovic said: “In a few short years Balter has become a craft leader through its commitment to quality and by building a brand that appeals to all beer lovers.
“We will help manage Balter’s strong growth through our willingness to invest, our world-class beer expertise and our customer relationships. And the terms of the deal mean the Balter team is not changing and management is staying on, which will ensure the business retains its identity and everything else that helped drive its success.
“The deal also means we’re expanding our presence in Queensland, where we already have a significant economic footprint with our Yatala brewery employing more than 250 people.”
It’s been a huge year for CUB, which is not only in the process of being acquired by Asahi as part of a $16billion deal, but has also scooped up Riot Wine Co.
Previous craft brewery acquisitions by CUB include Pirate Life and 4 Pines.
CUB holds a 48.8% share of the beer market share in Australia, and with the addition of Asahi’s estimated 1.2% share there’s speculation it may be forced to shed some brands to gain ACCC approval.
Mixed reaction from Balter fans
The comments from Balter fans on Facebook to the acquisition were mixed.
One posted: “Nice one guys! Congratulations on the huge success, you deserve it! Ignore the cynical craft beer goblins.”
Another added: “As long as your beer doesn’t change then all power to you!”
One also noted: “This is awesome guys – congrats! Those who say they won’t support anymore need to realise that money like this is going in to support an amazing company, built from the ground up and run by locals.”
“It means more local jobs, it means the ability to do bigger and better things in the Aussie booze landscape, and helps to push our product out the rest of the world and show them what we can do.”
However another posted: “I understand the move from a financial point of view … But as a craft beer drinker and brewer … I can’t help but to feel a little saddened by this. As I am fiercely loyal to Australian-owned businesses especially breweries … Despite all this, wish you all the best Balter crew and thanks for the great beers.”
While one said: “Not cool. The whole point of artisan, craft industries is giving a big screw-you to big corps. You’ve just empowered them for $$$.”
Balter reassured fans in a statement that chief brewer Scott Hargraves is staying on and it will be business as usual:
“The beer will stay the same, Scotty will remain head brewer, in charge of every drop that makes its way into your taps and fridges,” it said.
“The rest of our staff – from brew team, to marketing, to warehouse legends, to the entire gang who run the show, are all staying too.”
Hargraves told The Crafty Pint: “We had to think beyond ourselves – the five or six of us running this thing – and think about the shareholders, our employees and our families.
“It got to the point where we needed to de-risk the business and protect what we’ve already got. We don’t want to take the fun out of what we do but the responsibility grows.
“When we sold our first 54 kegs in March 2016, if keg sales had dropped 10% the next week, it’s five or six kegs; you shrug your shoulders. Now, if we have a week where we’re one or two percent off, that’s a lot of money that’s not in the kitty to make sure bills are paid and employees are paid properly.”
How Balter plans to protect its brand
Hargraves discussed details of the sale with Broadsheet. He said: “We’ve had plenty of [approaches] over the years, but we’ve always said no. It wasn’t suitable for us,” he says. “But over time, priorities have to change as you grow and evolve your business.”
Broadsheet also reported: “Under the contract of sale, Balter’s recipes, suppliers and other business operations are guaranteed for five years. Its beers cannot be brewed anywhere else but at the original brewery in Currumbin, which now employs 65 people.
“Likewise, Balter’s current practice of refrigerating canned beer from the moment it leaves the brewery to arriving at bottle shops around the country is also protected under the contract. This costly process is one of the reasons Balter’s XPA and other beers have such vivid flavours.”
Balter concluded in a statement: “If the same crew, same ingredients, same work ethic, same values and same sense of fun going into Balter doesn’t set you at ease, simply try one of our beers in a month’s time. The proof will be in the tin.
“Always has been, always will be.
“Thanks for being a part of the journey so far.”
Pictured main: Balter CEO and co-founder Ant Macdonald, co-founder Mick Fanning and CUB CEO Peter Filipovic.