About a decade ago, my best friend invited me along to one of his family functions, at which event his rather bogan brother-in-law totally surprised me.
It turns out that this bloke is quite the connoisseur when it comes to craft beer, and was in the habit of visiting many micro breweries around suburban Melbourne and regional Victoria (wife in tow as designated driver of course) to sample their wares.
This did quite take me aback, as this is the sort of fellow who, earlier in life and in previous generations, would have stayed completely loyal to one particular brand of beer – most likely a Carlton United Breweries product like Carlton Draught, Victoria Bitter, or Fosters Lager (oh for the days when that was widely sold in Melbourne).
As it was just after I had received my first twenty shares in Broo as a direct consequence of buying two slabs as part of a special promotion, I was rather interested in his opinion of Broo.
He was not enthusiastic. I do not remember exactly what he said, but he had tried it once, and he was not going to ever try it again.
This was useful market research on my part, as a sort-of investor in Broo, and might have partly informed my decision not to participate in the Broo IPO in 2016, when the punters could buy shares in the soon to get listed beer company for 20 cents each.
I have been paying closer attention to Broo in recent weeks, as readers of this blog might aver, given that there have been changes at the helm of the company.
The most recent changes, after an amicable (?) deal was reached to see the company founder and his close allies leave the board quietly, have been to abandon the long delayed deal to sell the Ballarat brewery site, and a suspension of trading on the ASX pending an announcement on a company restructure.
Monday will be three weeks since the initial trading halt, which was followed by a more formal suspension pending the restructure announcement, which was meant to be forthcoming by Friday 13th May.
No announcements have been made, and the shares remain suspended from trading.
I have speculated previously as to what the real value of Broo is, and what the directors could do with the assets of the company. Sad to say, I have little faith in the company’s short term viability, let alone its prospects for long term success.
My predictions are that they will terminate the bulk production of beer via their contract with CUB, and take steps to wind down the company, perhaps keeping beer production going at the Mildura Brewpub, pending the sale of that asset.
The main assets – the Mildura Brewpub and the land in Ballarat – are only worth about $3-4 million, and I am not sure that the Broo brand and recipes have any inherent value.
I hope I am wrong, as I feel a little sentimental about Broo.
I will be travelling to Mildura on Thursday, so I am really curious to see what this much vaunted Mildura Brewpub is like (if in fact it is still up and running), and to drink some Broo beer for the first time in over 10 years.