Good Drinks, owner of Gage Roads Brew Co., has today announced a “game-changer” distribution agreement with Molson Coors.
As part of the deal, Good Drinks will exclusively represent the Miller Chill, Miller Genuine Draught, Coors and Molson Canadian brands in Australia. Collectively, they represent approximately 15 million litres per annum.
Some of the Molson Coors’ brands will be manufactured by Coopers Brewery while others will be imported, which will mean that Good Drinks’ production goals – including moving away from contract brewing – will be unaffected.
The partnership, announced to the ASX today after a trading halt, will allow Good Drinks (ASX:GDA) to invest and develop its sales and marketing teams across Australia. Initial on-boarding of inventory and terms of trade will be funded via an extension of GDA’s working capital facility.
The distribution agreement is expected to add up to $40 million to revenue and up to $4 million to EBITDA.
The deal also allows Good Drinks to seize opportunities to access broader categories of the liquor market – namely the premium international section – and develop a greater east coast market share, both of which were identified as part of its wider strategy.
Molson Coors brands were previously distributed under an agreement with a Coca Cola EuroPacific Partners company. CCEP announced it would be exiting the beer space in Australia at the end of last year, when it announced it would not renew its deal with Molson Coors after the first half of 2022.
While Coca Cola has largely exited the industry, including selling its stake in the Australian Beer Co. venture to Casella Family Brands, it has recently done a U-turn with regards to selling WA brand Feral Brewing Co.
Good Drinks however also managed to snap up another former Coca Cola brand back in March – Magners Cider – as it looked to further diversify its portfolio.
GDA is no stranger to distribution deals with multinational brands, having also previously added San Miguel to its portfolio back in 2020.
Molson Coors APAC regional director Shaun Morton said that the company is pleased to have secured a long-term distribution agreement with Good Drinks.
“We have managed to find a trusted business partner in GDA that will help us deliver on our growth ambitions on the Australian Market,” Morton said in the statement to the ASX.
“Australia is a priority market for Molson Coors and as such, GDA’s local market expertise and nationwide distribution coverage provide an excellent platform from which to develop our portfolio. We are looking forward to a long and successful partnership with Good Drinks.”
Good Drinks managing director John Hoedemaker said that the Molson Coors partnership is a “game-changer” for the business.
“Molson Coors has a strong and vibrant brand portfolio with a significant following in Australia, a deep history in the USA and is a truly global business. The decision by Molson Coors to partner with Good Drinks Australia is a further vote in confidence in our national sales and marketing team and our capabilities to grow brands in the Australian beer market.”