Here Comes Woolworths....

[Duff]

Have bought a 25% stake in Gage Roads to develop its own beer label.

Linky

Woolworths buys stake in brewer Gage Roads


SUPERMARKET giant Woolworths will buy its first ever stake in a brewer in a bid to develop its private label beer business and cut logistics costs.

The retailer will spend up to $1.9 million to buy a 25 per cent slice of boutique West Australian brewer Gage Roads through a private placement of 76.41 million shares, the Herald Sun reported.

Gage Roads will become Woolworths' second supplier of private label beer brands, providing 350,000 cases of beer each year.

In July last year, Woolworths launched its first private label brand, the low-carbohydrate Platinum Blonde, brewed by the Independent Distillers Group in Victoria.

A Woolworths spokesman said the decision to engage a brewery partner on the west coast "that can support the growth of our liquor business in WA" was prompted by "current brewing capacity limitations, together with the high cost of transporting beer from east to west".

He said that "at this stage" Gage Roads products would only be stocked in Western Australia.

The investment in the brewer would allow Gage Roads to expand its capacity and buy new equipment "so that Woolworths' growing private label beer requirements can be met".

Following the placement Woolworths Liquor Group general manager Steven Greentree will join the brewer's board as a non-executive director.

The deal, which is subject to shareholder approval, drove Gage Roads shares up 1, or 20 per cent, to close at 6.

The stock was placed in a trading halt on Thursday pending the announcement.

Gage Roads chief executive Nick Hayler said planning had begun to maximise brewing capacity at its West Australian operations.

Shareholders will vote on the deal at a general meeting late next month.

Woolworths rival Coles sells private label beer brands Tasman Bitter and Hammer 'N' Tongs, produced by Tasmanian brewer Boag's.

Earlier this week, Woolworths announced it would also acquire up to nine store leases in Melbourne and Sydney from Macro Wholefoods to roll out upmarket grocer Thomas Dux stores.

The deal also includes the Macro organic private label brand.

Woolworths shares rose 37, or 1.45 per cent, to $25.84.

 

[Doc]

I'm searching real hard to try and find some positives in these moves by Coles and Woolworths.

Woolworths rival Coles sells private label beer brands Tasman Bitter and Hammer 'N' Tongs, produced by Tasmanian brewer Boag's.

Woolworths has a contract with Independent Distillers to brew up to 500,000 cases of Platinum Blonde a year in Victoria. The deal with Gage Roads will allow Woolworths access to additional brewing capacity of up to 350,000 cases a year and cut the cost of transporting beer across the Nullarbor Plain.

The chief executive of Gage Roads, Nick Hayler, said Woolworths wanted to brew a different style of beer to Platinum Blonde at his company, but the nature of it was "under wraps".

The obvious negative is the beer is targeted at the generic styles of mass produced lagers, for the masses, with economics in mind.

The only positive I can see at this stage is that Gage Roads benefit from a cash injection for some new plant which will in turn hopefully allow them to keep brewing some exciting beers for us the beer appreciation crowd.

However Woolworths now have a 25% share in them. How long before they need more capacity and swing their weight and business bullying around to have a controlling share and override decisions to dumb down the already dumbed down mass beer market.

Doc

 

[Bribie G]

Good idea. I'm surprised there aren't more 'private brand' beers in Australia. There's a chain in the UK for example called COOP, almost equivalent to our IGA stores, who have been round since the 1920s or earlier and they actually used to own their own brewery. I don't know if that's still the case but over there you can get Tesco Lager, Asda Bitter etc.
Of course it's different in Australia because of the 'beer miles' involved, and also the small number of brewers here who really have no interest in competing for the supermarket business, so it makes perfect sense buying into a local rather than spending squillions importing house brands from the Eastern States. I hope Woolies gives Lion and Carlton heaps, and can't wait for the new Coca Cola brewery at Tuggerah to come on stream as well.

About time the local market got a good rousing.

Edit: Coles also import Hollandia and Bavaria from the Netherlands, and Woolies import Amsterdam Mariner. Whilst these beers are not exactly Pilsner Urquell they do give the consumer a fairly good quality alternative to VB or XXXX Gold and without them, our choice of drinkable beers would be far less than if we only had the 'duopoly' beers available.

If the duopoly perceive that their mass market is being eroded by the supermarkets they might introduce more premium lines and offer us some better beers .. not holding my breath however..

 

[antains]

I'm searching real hard to try and find some positives in these moves by Coles and Woolworths.
....

The only positive I can see at this stage is that Gage Roads benefit from a cash injection for some new plant which will in turn hopefully allow them to keep brewing some exciting beers for us the beer appreciation crowd.

However Woolworths now have a 25% share in them. How long before they need more capacity and swing their weight and business bullying around to have a controlling share and override decisions to dumb down the already dumbed down mass beer market.

Doc

I hope Woolies gives Lion and Carlton heaps, and can't wait for the new Coca Cola brewery at Tuggerah to come on stream as well.

About time the local market got a good rousing.

Edit: Coles also import Hollandia and Bavaria from the Netherlands, and Woolies import Amsterdam Mariner. Whilst these beers are not exactly Pilsner Urquell they do give the consumer a fairly good quality alternative to VB or XXXX Gold and without them, our choice of drinkable beers would be far less than if we only had the 'duopoly' beers available.

If the duopoly perceive that their mass market is being eroded by the supermarkets they might introduce more premium lines and offer us some better beers .. not holding my breath however..

I wonder if it's less about taking on CUB and Lion Nathan, than it is about squashing their direct competition. I'm thinking of Aldi, here. Over the last three years, Woolies and Coles have both shuffled brands down to lower shelves while elevating their generic brands and introducing premium generic brands.

Meanwhile, consumers are going into Aldi and walking out with cheap groceries and quite often a slab of beer that they picked up because of the price point. The taste would be on par with Hollandia and Bavaria and gives the drinker an idea that there are other beer tastes out there.

Seriously, though, those beers aren't the best. They're drinkable, but they share the same level of mass-production refinement that CUB and Lion Nathan achieve.

The mass-beer market isn't that stupid, but they do like a bargain. If they can get beer cheaper and feel like their drinking something premium, then they'll do it.

As for Gage Roads... I tried the Wahoo the other day. They're already producing beer that is devoid of distinctive character, which means it's going to be ideal for slipping into the market and not challenging the consumer too much, as well as making them proud of purchasing a "premium" beer that is Australian.

With regards to Coca-Cola and Blue Tongue, I think that one might be more about challenging the big two brewers than the big two distributors.


Just some thoughts.

 

[Bribie G]

The point about ALDI is that they only sell liquor in Victoria and AFAIK they aren't in WA as yet. It would be great if I could buy booze in my local ALDI in Queensland, but with no Supermarket Liquor sales of any description Coles and Woolies have just taken over most of the larger pubs and, using the pub licences, have flooded shopping centres with Liquorlands, Dans, Ist Choice and BWS. Jeez even nude bathing is still illegal here and this is the 21st century.

 

[Hargie]

...aldi most definitely sell alcohol in the ACT...i remember some of the packaging on them looking like the Malt Shovel beers...and obviously a few German brands...

 

[Bribie G]

...aldi most definitely sell alcohol in the ACT...i remember some of the packaging on them looking like the Malt Shovel beers...and obviously a few German brands...

Hopefully the trend will continue Northwards B) . You'd have to think that ALDI are doing serious lobbying behind the scenes. Problem is that for NSW they would probably have to build a 'bump out' onto each store to form a separate liquor walk-in licenced section and that might not be feasible. Just for info, in Victoria is the liquor out on the shelves with the baked beans or does it have to be sold in a separate section you enter through an arch with the under 18 warnings etc as in NSW?

 

[Thirsty Boy]

Interesting - When Fosters sold ALH - it included several pub breweries. Gunn Island, Three Degrees and another one or two scattered around the place I think. Woolies bought ALH and very shortly thereafter chopped out the brewing parts of the business. Didn't want to brew beer, just own pokies pubs (well mostly pokies pubs)

Funny that now only a few years later they decide they want to specifically buy a brewery and make Woolies beer. Good for diversity, bad for my job security.

Oh well

 

[Hargie]

Hopefully the trend will continue Northwards B) . You'd have to think that ALDI are doing serious lobbying behind the scenes. Problem is that for NSW they would probably have to build a 'bump out' onto each store to form a separate liquor walk-in licenced section and that might not be feasible. Just for info, in Victoria is the liquor out on the shelves with the baked beans or does it have to be sold in a separate section you enter through an arch with the under 18 warnings etc as in NSW?

....Can't speak for NSW, but in the ACT at my former local Woolies ( Kippax) , there was a whole aisle of beer and wines ,flagoons etc...no magic archways or anything...the only restriction is that you have to go thru' the designated 'liquor' checkouts, which had to be staffed by someone over 18...and the Mac's Liquor shop is on the other side of the checkout about 4 metres away...so...if you forgot to get your grog when you got your bread you just walk thru to the (woolies owned) bottle shop anyway...

...never really noticed this is not the case in QLD 'till you mentioned it...have noticed that there are more BWS shops than canetoads up here tho'.....

 

[svyturys]

My local ALDI sells its beer in the same aisle as the frozen food and dairy cabinets. There is no restriction on which checkout to use.
Sometimes they'll have liquor at the "end of aisle" bump if they are promoting something.
(Preston, Melbourne, Victoria)
Cheers

 

[Linz]

Woolies beer.

There goes another beer name from Macarthur :lol: B)

 

[antains]

...Just for info, in Victoria is the liquor out on the shelves with the baked beans or does it have to be sold in a separate section you enter through an arch with the under 18 warnings etc as in NSW?

My local ALDI sells its beer in the same aisle as the frozen food and dairy cabinets. There is no restriction on which checkout to use.
Sometimes they'll have liquor at the "end of aisle" bump if they are promoting something.
(Preston, Melbourne, Victoria)
Cheers

I actually haven't been into an Aldi, yet :huh: , so I'll defer to svyturys's experience, there. However, there is a Coles in East Kew area that has liquor in one aisle. No specific register, either. Plus, a couple of my local supermarkets (IGA and smaller) have in-aisle liquor.

 

[svyturys]

A slight tangent here. ALDI are a German company and in Europe beer is sold anywhere and everywhere.
Kiosks at bus stops, service stations, milk bars and even "lane" service at bowling alleys.
The best bit is the bar in the middle of some supermarkets.
Right next to the fruit and vegetables and other grocery items you will find an "island" bar selling coffee, fruit juice and beer. The have cafe chairs and tables arranged around it and happy patrons who don't seem to mind going shopping with SWMBO.

Ditto in shopping centres where all the cafes are happy to provide a beer.

Even Macca's will ask "would you like a beer with that?" in Copenhagen.

Cheers

 

[mikelinz]

Hopefully the trend will continue Northwards B) . You'd have to think that ALDI are doing serious lobbying behind the scenes. Problem is that for NSW they would probably have to build a 'bump out' onto each store to form a separate liquor walk-in licenced section and that might not be feasible. Just for info, in Victoria is the liquor out on the shelves with the baked beans or does it have to be sold in a separate section you enter through an arch with the under 18 warnings etc as in NSW?

On a shelf next to the milk fridge in my local aldi

 

[HoppingMad]

As for Gage Roads... I tried the Wahoo the other day. They're already producing beer that is devoid of distinctive character, which means it's going to be ideal for slipping into the market and not challenging the consumer too much.

Have to agree. Has been quite a while since I've tried a gage as was totally unimpressed with it. Was considering refreshing my memory but with a supermarket buying in I'm even more nervous.

Hammer & Tongs is a horrible beer too. Thirsty Boy, I think your job is safe when the competition is that crap - doesn't matter how low you discount the stuff, if it doesn't taste great, punters aren't going to be buying it for long. That said, am amazed that Hammer & Tongs is still for sale in liquorland.

Hopper.

 

[spog]

at 1.9million for a 25% share surely we could ,between us scrape up some capital to buy a slice as well.
do i hear another bulk buy comming on :unsure: .....cheers........spog.......

 

[brendanos]

I think as a public company this isn't a particularly bad thing for Gage. They've been struggling to brew anywhere near capacity for some time, and could do with some funds to upgrade some of their second hand (and not particularly ideal) equipment. Not sure what influence it will have on the direction of the Gage Roads brands, and whether it will exacerbate or resolve their identity crisis, but it should certainly be interesting to follow.

 

[Bribie G]

Have to agree. Has been quite a while since I've tried a gage as was totally unimpressed with it. Was considering refreshing my memory but with a supermarket buying in I'm even more nervous.

Hammer & Tongs is a horrible beer too. Thirsty Boy, I think your job is safe when the competition is that crap - doesn't matter how low you discount the stuff, if it doesn't taste great, punters aren't going to be buying it for long. That said, am amazed that Hammer & Tongs is still for sale in liquorland.

Hopper.

Not to mention Haagen. Is that the independent brewery that does their pure Platinum or whatever it's called? Personally I also detest Boag's beers, they taste like chewing on an old wooden pencil to me. Since Lion Nathan took them over they now have distribution wherever xxxx and Tooheys are sold and to me the Boags Draught green death tastes identical to the Tasman Bitter.
Actually I am swinging back more to Fosters brews, have always been a fan of Melb Bitter and in a local club they recently swapped out Tooheys Old and put in Carlton Black and it's not bad, you can actually taste some ingredients. I also reckon Sheaf Stout is probably one of the best beers currently produced in Australia.

 

[kevo]

Just checked out the Gage Roads site for the first time in a while. Looks more impressive and actually has some details on their beers other than the standards...

Anyone tried the Kutt or the blue Cider(can't remember it's name).

Seems everyone is bringing out a low carb beer and a cider.

 

[antains]

...have always been a fan of Melb Bitter...

+1 It's a grumpy old man beer. I love it (even though I'm 32). :icon_cheers: