Melbourne-based brewer Broo has placed Mildura Brewery and Mildura Brewery Pub into voluntary administration.
Con Kokkinos and Matthew Jess from Worrells have been appointed voluntary administrators.
“The Worrells’ teams are now investigating the Companies’ financial position and considering the options for the businesses going forward,” Worrells said in a statement.
“The management team of Broo Ltd had been exploring options of a sale of the Mildura Brewery and Mildura Brewery Pub in the lead up to the voluntary administration and these discussions will be continued by the administrators.”
It follows a trading halt notice being lodged by Broo with the ASX on Monday, which said the halt was for “a market update in relation to a restructure of the company”.
In February 2017, Broo announced the $2.1 million acquisition of industrial land in Ballarat where it planned to build a world-class facility for $95 million.
However, Broo recently announced that a planned $7.5 million deal to sell the Ballarat site to Bentley Property Group had fallen through as the buyer had not yet received approval from Development Victoria.
Broo acquired the Mildura Brewery from celebrity chef Stefano di Pieri in February 2017. CEO Kent Grogan told the AFR at the time that he paid $1 million for the brewery. In its announcement to the ASX, Broo advised the acquisition would “provide the Company with a commercial brewery facility to immediately commence its own beer production, providing the Company with the opportunity and capacity to expand distribution of its beer products nationally.”
Grogan (above) stepped down from his role as CEO of Broo in April 2022. Fellow director Mathew Boyes also stepped down. They were replaced on the board by Kobe Li and George Karafotias.
“I am fully confident in the new revitalised board’s ability to lead the Company through its next phase of growth and build on the foundations that have been laid,” Grogan said. “I look forward to providing my continued support to Broo in my capacity as General manager and a major shareholder.”
At the time, Brews News noted: “The change in leadership was prompted earlier this year when two notices were received by the ASX, under Section 249D and Section 203D of the Corporations Act.
“Those notices, filed by two shareholders of Broo, Knight61 Investments Pty Ltd and Filli Capital Pty Ltd, would force the removal of two directors of the company, Kent Grogan and Mathew Boyes, at a general meeting.”
Deals with CUB and ALM lose their fizz
Broo has accumulated losses of $22 million since listing on the ASX six years ago.
In its latest half-year report, the company said that its a working capital deficit of $2.7 million and cash outflows from operating activities of $1.36 million “indicate a significant or material uncertainty about the consolidated entity’s ability to continue as a going concern”.
Broo struck a deal with the Carlton & United Breweries in August 2020 for two of its brands to be made at the Yatala brewery in Queensland.
A CUB spokesman described it as ”a commercial arrangement that gives Broo access to a small amount of capacity at one of our breweries”.
ALM announced in February 2021 that it was growing its portfolio of owned and exclusive brands with a supply agreement with Broo Beer.
Under the agreement, Broo Beer, known for its ‘100% Australian-owned’ philosophy and kangaroo logo, would be exclusively distributed by ALM’s Queensland operation, with plans to extend the offer to additional Australian states across its network of hotels, bottle shops and on-premise venues.
However, Broo appears to have struggled to move the product and their beer was selling at below production cost according to a report in Brews News.