DB Breweries paid $30.5 million for Kapiti boutique beer maker Tuatara Brewing Co last year as the country's major liquor companies beef up their craft beer credibility to reach consumers with a taste for high-end brews.
The Auckland-based brewer paid cash for the boutique firm in January last year in a deal attributing $16.5m to the Tuatara brand and $12.8m to goodwill, DB's 2017 financial statements show.
That trumps the potential $25.1m price rival Lion - Beer, Spirits & Wine (NZ) put on Upper Hutt brewer Panhead Custom Ales, of which $15.1m was up front and a further $10m based on hitting earning targets.
Tuatara was set up in 2000 by the Vasta family, who stayed on through Rangatira Investments' stake in the brewer and have carried on under DB's ownership.
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The former shareholders rejected an offer of $16.6m from a large player in the industry, but are now in dispute with Rangatira on whether the sale to DB triggered earn-outs.
Craft beer consumption has been on the rise in recent years, even as total beer drunk has dropped, with 194 small breweries operating at the end of 2016, and selling beer faster than they can make it, according to an industry report by ANZ Bank New Zealand.
Government figures show those consumption trends remain intact, with consumption of beer with an alcohol content of 5 per cent-plus rising 9 per cent to 27.8 million litres in the year ended March 31, while total beer consumption shrank 1.3 per cent.
That dynamic showed up in DB's accounts, with the brewer's sales rising 2.7 per cent to $513.5m, lagging behind a 3.3 per cent increase in the cost of duty, raw materials and packaging to $294.1m. Gross margin shrank to 42.7 per cent from 43 per cent.
Still, DB's profit rose 12 per cent to $30.4m, with the brewer trimming its advertising spend 1.1 per cent to $31.6m and registering a gain on foreign exchange contracts of $613,000, having posted a loss on FX of $1.2m a year earlier. Writing off bad debts edged up to $40.6m and the brewer's wage bill rose 7.1 per cent to $48.4mi.
It's not plain sailing for all boutique brewers, with Moa Group repositioning itself several times since going public in 2012, and this week reported a 2 per cent increase in annual sales to $10.5m while widening its loss to $2.5m spending more on distribution.
Moa is raising $1.9m through a placement and will follow that up with a share purchase plan on the same terms, having $987,000 in cash at the March 31 balance date, about half its operating cash outflow in the year of $1.8m. Moa shares last traded at 52 cents.