CUB will produce Broo Premium Lager and Australia Draught under a new contract brewing deal.
The two brands will be produced at CUB’s Yatala brewery in south-east Queensland.
Broo said it anticipates placing orders with CUB for a minimum of 48,000 cases (24 x 375ml bottles) on a quarterly basis with CUB. The first order as part of the new brewing deal will be made in October 2020.
Broo’s Sorrento Brewhouse and its Mildura pub in Victoria are both shut due to COVID-19 restrictions, with staff on JobKeeper.
Founder Kent Grogan told the Australian Financial Review the company’s Mildura brewery was still making beer, but would shift further towards the craft beer segment.
Broo announced plans in February 2017 to build a $100 million environmentally-friendly brewery on a 15-hectare site in Ballarat (above), including a 10,000-set event venue, zipline, museum and hospitality ventures.
Queensland drinkers embrace Broo
Grogan said Yatala was the perfect place to produce Broo as an increasing number of Queenslanders are drinking the beers.
The product is sold mainly through independent liquor retailers in Queensland and Grogan speculated that its appeal was partly because of its ‘Australiana’ approach, with the bottles featuring a kangaroo logo.
“Queensland is a parochial state,” he said. “Our beers do have a bit of a quirky nature to them.”
He also noted that the hotter weather and value proposition of the beers was helping in Queensland.
“The drinking environment in Queensland is very consistent all year round,” Grogan said.
Difficult year for Broo
At the beginning of May, Broo announced in its quarterly report that it made $509,000 in sales in the quarter to the end of March, but a net loss of $1.2 million for its operating activities.
Just prior to this announcement, Grogan sold 40 million shares held by his company Groges Holdings Pty in an off-market sale for $400,000, reducing his shareholding to below 50%.
In June, Broo was placed in a trading halt after the ASX queried a share price spike.
The letter from the ASX noted the unusual price movements, which saw Broo’s share price rise from a low of $0.015 per share to a high of $0.026 on both June 5 and 9.
It also said it had noted a “significant increase” in the volume of Broo’s securities from June 2-9.
Broo company secretary Justyn Stedwell said the company was not aware of any information that could explain the trading. He admitted that Broo was progressing in negotiations in relation to contract brewing arrangements, but stipulated that nothing had been finalised.
