The formal sale process for Rocks Brewery & Bar in Sydney gets underway tomorrow, amid reports some large international brands are already among the suitors.
As foreshadowed by The Crafty Pint, the leasehold for the Rocks venue in Sydney Corporate Park, Alexandria, is to be marketed by Blake Edwards of Ray White Hotels Australia. The expressions of interest campaign will be advertised in the Sydney Morning Herald on Saturday June 17.
The transaction does not include the Rocks brand, nor its leaseholds on two Sydney pubs: Harts in The Rocks and The Raglan in Alexandria.
“If someone does want to talk about Rocks the brand, that’s another whole proposition as well,” Rocks founder Mark Fethers told Brews News.
“[Otherwise] I’ll keep going and hopefully set up another smaller brewery. I’m not going to get out of the game, that’s for sure,” he said.
“Hopefully whoever comes on board, we can maybe put something in the contract so that we can actually keep brewing there for a little bit, until we find our feet.”
Fethers said he is committed to staying in hospitality and will definitely not be parting with Harts, nor the Raglan, with the former venue currently trading very strongly.
According to Ray White, the Rocks bar is a strong performer with average weekly food and beverage revenue in FY16 of $57,783.
Fethers confirmed that it is the brewery side of the business that is underperforming, with contract production now making up much of its volume.
“We haven’t been selling as much of the Rocks beer as we’d like to,” he said.
He says this is simply a result of competition heating up among breweries in the years since Rocks opened the Alexandria venue in 2013.
However, the main reason for the sale is his business partner Simon Osborne’s desire to exit the business, Fethers said.
“The only way to give him fair market value is to sell,” he said.
“Simon and I started this journey in 2013 and are proud of what we have achieved… We are now in different stages of life. We have decided its time to sell and move in different directions.”
Fethers said there has already been considerable interest in the assets, including from some international players, but declined to elaborate.
However, supposed Australian brewpub aspirants Goose Island, as well as a cashed-up Brewdog, have both been linked with the opportunity in recent days.
“Nothing like this has been sold before in Australia, where it’s a hotel licence with a 400-seat restaurant and a brewing facility next door,” Fethers said.
Appealing prospect: Ray White
Rocks Brewery & Bar has more than six years remaining on the current lease term with a further option to renew for 10 years.
Ray White’s Blake Edwards expects strong interest in the venue and its “state of the art, high efficiency brewing system” from the hospitality sector.
“Making beer is a lot cheaper than buying it off a supplier and I think there will be many hotel or hospitality groups who might like to develop their own product in house and secure a low cost beer supply which can in turn enhance their gross profit in other venues,” he said.
“A keg of beer cost about $90 to produce and about $250 to buy wholesale. It makes sense to brew your own.”
Expressions of interest close July 13.