COCA-COLA Amatil has everything ready to re-enter the beer market late next year, save for an actual deal with a global beer brand.
Yesterday it announced a brewing joint venture with the maker of Australia's wildly successful Yellow Tail wine label.
CCA will lend $46 million to a joint-venture vehicle, Australian Beer Company, that will acquire what it describes as the world-class brewery operation recently set up by Yellow Tail's owner, the Casella Group.
This loan will convert to a 50 per cent share in the business on December 16 next year, when CCA's non-compete clause with SABMiller expires.
"This new agreement … will enable us to re-enter the premium beer market in Australia after December 16, 2013,'' said CCA chief executive Terry Davis.
The company also announced a better than expected interim result.
Mr Davis said the joint venture's business model would not be dissimilar to the Pacific Beverage joint venture it shared with SABMiller.
Mr Davis said the beer venture would make its profit margin on the manufactured product, which the two parties would share, then CCA would make an additional profit on selling and distributing the product. ''To me its a perfect match,'' said Casella Wines managing director John Casella. ''We have a low-cost base, they have a fantastic sales and distribution system.''
CCA reported a 5.6 per cent increase in net profit before significant items to $247.1 million for the six months to June 30, despite a first-quarter performance cruelled by wet summer weather.
The company surprised the market with strong local sales for the second quarter as it took advantage of the government's carbon tax handouts.
''Grocery is really where they spent the money,'' Mr Davis said of the cash handout, but warned that the sales boost had not continued into the current half-year.
''I still remain cautious about the overall trading environment in Australia and New Zealand,'' he said.
''While the Australian business delivered great growth in the second quarter, certainly whether it's the aftermath of the government handout, retail sales over July and August seemed quite weak.''