Embattled Mighty Craft has shed all its interests in beer, aside from Better Beer, the brand it co-founded with The Inspired Unemployed and entrepreneur Nick Cogger.

While it has sold 7.5% of its shares in Better Beer to reduce debt, but is still hopeful of a merger deal with the booming brand.

The business previously owned or held stakes in Mismatch Brewing, Jetty Road, Slipstream, Sauce Brewing, Ballistic Beer Co, Sparkke Beverages and FogHorn Brewery.

Mighty Craft announced on 3 June that the sale of Mismatch was due to settle on or around 12 June 2024.

FogHorn founder Shawn Sherlock has taken back full control of his brewery. It follows five years after his founding partner’s share in the business was acquired by Founders First, prior to that business becoming Mighty Craft. 

“COVID-19 and the two years of intense lockdowns really impacted the whole Mighty Craft business model,” Sherlock told The Crafty Pint. 

When the impacts of the pandemic were replaced by the pressures rising interest rates and other economic challenges, Sherlock said the two parties “realised we would be better apart than together”.

78 Degrees sale to ex-CUB CEO led consortium settles

Mighty Craft also announced that the sale of 78 Degrees had settled this week, with the company receiving cash consideration totalling $5.2 million.

In April 2024, a consortium led by former CUB CEO Peter Filipovic acquired Mismatch Brewing and 78 Degrees distillery. It followed the consortium, called United Publicans group, buying Jetty Road from Mighty Craft late last year for $3 million, in addition to Hills Cider.

Filipovic told The Australian: “There are the immediate upside opportunities within the publican group that we’ve created. We have over 200 properties within the group that we ensure distribution of these brands in – not many other groups can do that.’’

United Publicans has more than 100 pubs in Victoria, about 16 in South Australia, more than 30 in Queensland and the rest in NSW. Fiipovic noted that it is usually quite difficult to get into taps in the on-premise, but the newly acquired brands would not face those obstacles.

The Australian reported: “It is still aiming to get its brands on the shelves at the major liquor outlets, but Mr Filipovic said being able to get on tap in their own venues is a huge positive.”

“When we’re building the brands – each of them have their local communities and we’ll invest in that – and ensure distribution through the pub network that we have and enable them to be brand champions for each of the brands we have,’’ he said.

Mighty Craft sells shares in Better Beer to PURE

Mighty Craft announced on 16 May 2024 that it had entered into an agreement with its senior debt provider, PURE Asset Management Pty Ltd (PURE), to buy out the royalty with PURE for a portion of Mighty Craft’s shareholding in Better Beer.

As previously announced on 2 August 2023, Mighty Craft and PURE are parties to a Royalty Deed in relation to the Company’s wholesale revenue in Australia (Royalty Deed).

Mighty Craft agreed to sell 7.5% of the shares in Better Beer to PURE as consideration for the buyout price of approximately $6.1 million under the Royalty Deed. The completion of the sale will occur on 12 June 2024, or earlier as agreed by the parties.

Mighty Craft Managing Director Katie McNamara said: “The royalty swap represents further meaningful debt reduction, which is a key focus of the MCL Board. This, combined with the $2.3 million debt reduction announced in Q3 FY24 and the proposed flow of funds from the settlement of the 78 Degrees and Mismatch sale, will represent over $10 million of debt reduction across H2 FY24.”

Mighty Craft said PURE and all stakeholders are working constructively to achieve the potential merger between Mighty Craft and Better Beer, which was announced on 30 April 2024 in the Quarterly Report, and “this transaction ensures all three parties’ interests are aligned towards achieving this outcome”.