In a surprise announcement, Good Drinks and Stomping Ground have said they won't be going ahead with the proposed acquisition announced last year.
In a statement to media, the WA-based operation said: "Good Drinks Australia and Stomping Ground Brewing Co have jointly decided to not proceed with the planned acquisition of the Victorian brewery as announced 22 August 2022.
"Since the intention to purchase Stomping Ground was announced in August, conditions have changed and as a result, both parties have agreed it is best to move forward separately."
Last year, Good Drinks was set to buy 100 percent of Stomping Ground, including its venues, as well as The Local Taphouse in St Kilda. The proposed deal would see them pay Stomping Ground's founders $7m in cash plus 4.5 million in GDA ordinary shares; a trailing five-year performance component could have netted Stomping Ground's founders an additional 3.5 million ordinary shares, up to $8m in cash based upon volume sales, and further payments based on venue performance.
However, in today's statement, Good Drinks managing director John Hoedemaker said: “Stomping Ground is a great business and their management team have done an excellent job of creating a relevant Victorian beer business and brand. Unfortunately, recent conditions have challenged GDA’s underlying business case for the acquisition and would require more resources than initially anticipated to create meaningful value for GDA shareholders.
“We know Stomping Ground will continue to be a great craft beer brand and wish the team all the best for the future.”
Stomping Ground founder Steve Jeffares said: “With softer trading conditions in the last few months, the benefits of joining forces unfortunately became less compelling. We felt it was a smarter option for us both to focus our efforts and resources on consolidating in the markets we know and understand best, our own.
“We’re incredibly proud of our award-winning team, beers, brand and venues, and, along with our committed shareholders, remain excited and energised about our strategic plans for Stomping Ground in Victoria. We wish the Good Drinks team all the best in the years ahead.”
Independent breweries are currently facing a raft of challenges including COVID's continued impact on hospitality, staffing shortages and the rising cost of producing beer. You can read our story about the "perfect storm" hitting the industry as interest rates continue to rise here.
Earlier this week, Good Drinks posted their results for the first half of this financial year to the ASX. In the update, the company announced it had recorded an 80 per cent uplift in profit and doubled its retail market share.
You can read Will Ziebell's follow-up interview with Stomping Ground co-founder Steve Jeffares here.
James Smith launched The Crafty Pint in 2010, two years after moving to Australia from the UK. He was taken to Mountain Goat within weeks of landing in Melbourne, joined their indoor cricket team, and is still navigating the rabbit hole that is craft beer to this day.
The beers that turned you on to good beer:
- Watching pints of McEwan's 80 Shilling settle when visiting family in Edinburgh.
- Pints of flat Bass from the jug at the Cap & Stocking in Kegworth.
- A first Paulaner Hefeweizen when working in Munich in 1998: “This smells of bananas!”
- Castle Rock Harvest Pale – how could a 3.8 percent ABV beer be so good? (It turns out it was an early example of the three Cs – Cascade, Centennial and Columbus – in an English bitter).
- Dogfish Head 90 Minute IPA poured through hops at the Sunset Grill in Cambridge, MA, in the company of a man who turned out to be the Beer Nut (while we were both covering a double murder case at the time).
- Ordering a Mountain Goat Hightail on my first day as an Aussie resident as it was local and I’d never heard of it; “A dark Australian beer; well I never…”
- Murray’s Icon 2IPA at Beer DeLuxe Fed Square, recommended by a guy I’d not long known who's now the main man at Fixation, served by Mik Halse, now head of sales at Hawkers. How could an Australian beer smell as good as that?!?
You've got three beers to turn someone else on to good beer; what are they and why?
- Any really good, fresh and balanced West Coast style IPA. Punchy hop aromatics are the most obvious way to capture someone's attention and these IPAs, done well, present the key components in beer (if you're sticking to just water, malt, hops and yeast) in harmony yet with the volume turned up.
- Saison Dupont. Arguably a selfish choice here as I bloody love the broad saison style and dearly hope it will finally take hold in Australia one day. Given a choice, I'd probably crack one enlivened with Brettanomyces like Molly Rose Matilde for myself but, when it comes to turning on someone new, you've got to go with the classic.
- Rodenbach Caractère Rouge. Because if you don't enjoy or can't appreciate this beer, I'll never win you over. And because Filip, the fruit and wood specialist at Rodenbach that designed it, is a beautiful human.
The last beer you enjoyed:
Fixation IPA at The Incubator.
Three things that represent you:
- The Soft Bulletin by The Flaming Lips
- Catch-22 by Joseph Heller
- Golden Plains
NB All articles written by James in the first eight years of the site appear as By Crafty Pint. Today, that's used for collaborative efforts by the wider team.
