ALM and Broo sign exclusive distribution agreement

26 February, 2021 by Andy Young

Australian beer, Broo, has become the latest addition to ALM’s owned and exclusive brand portfolio with the announcement of an exclusive distribution agreement.

The agreement will see ALM distribute Broo premium lager products for on- and off-premise markets throughout Australia, and as part of this Broo has launched a joint sales campaign with ALM across its extended network in Queensland.

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Commenting on the new agreement, Broo’s CEO Kent Grogan said: “We are delighted to join forces with ALM. Together, we are well positioned to offer customers a point of difference with ALM’s exclusive-to-indies approach, along with our unapologetic packaging to drive further brand awareness and category growth.”

ALM’s General Manager of Owned & Exclusive Brands, Murray Riemann, added: “We are delighted to work with Broo. We have spent time in trade with Kent, and have been impressed with the way both shoppers and retailers have responded to the product.

“I think the market is appreciating a traditional, Aussie mainstream lager and we are really looking forward to seeing Broo’s success across the country as we continue to deliver exceptional quality, value and margin to retailers and consumers alike.”

The agreement comes as Broo published its half-year results, which raised concerns over its viability as a going concern after a loss for the six months to 31 December 2020 of $1,036,723.

The details published on the ASX included an independent review of Broo’s half-year results by Connect Audit, which stated: “The consolidated entity has incurred a net loss of $1,036,723 for the half-year ended 31 December 2020 and has a working capital deficit of $3,022,619 and had cash outflows from operating activities of $1,833,845. These conditions indicate a significant or material uncertainty about the consolidated entity’s ability to continue as a going concern.”

“The financial report has been prepared on a going concern basis which assumes the realisation of assets and the extinguishment of liabilities in the normal course of business at the amounts stated in the financial report, for the following reasons:

  • On 12 August 2020, the company announced that it had signed a contract brewing agreement with CUB Pty Ltd for the production of Broo Premium Lager and Australian Draught. The agreement will provide increased production and supply capacity for its brands and enable the company to meet and capitalise on market demand. The agreement will continue for a period of 24 months expiring on 31 August 2022. The consolidated entity has product stock on hand available for sale, and has launched sales and marketing initiatives in quarter one of 2021 to facilitate increased product sales;
  • On 19 February 2021, the consolidated entity refinanced current borrowings totalling $1,950,000 which are now due for repayment on 19 February 2023;
  • The board is currently investigating options to dispose of all non-essential assets; and
  • The directors are of the opinion that the company will be able to access equity capital markets for any additional working capital requirements.

“For the above reasons the board considers that the consolidated entity remains a going concern and the financial report has been prepared on this basis.”

Grogan has previously described the beer as “a proud Australian in an increasingly crowded global market”, crediting the brand for being “innovative, daring, loud and always passionate about the beer.”