Artist’s impression of the proposed Matso’s Sunshine Coast

ASX-listed brewer Good Drinks Australia has announced that as part of its transformation of Joe’s Waterhole into Matso’s Sunshine Coast, the company has sold its gaming licences realising $4.9 million for the redevelopment.

Good Drinks announced the $5.3 million acquisition of the Sunshine Coast venue in 2021, only receiving approval for its redevelopment plans in April this year.

The redevelopment costing $5.5 million is expected to open in October this year.

Good Drinks Chief Strategy Officer Aaron Heary told Brews News that the machines weren’t necessary for the experience the company wanted to create.

“What we’re creating there is a brand experience for Matso’s,” he explained.

“And it’s like inviting you into the home of Matso’s, which is in Broome and the Broome venue doesn’t have gaming, so we don’t feel that it’s essential to the Matso’s brand to have it.

“So we made the decision to sell them and release the capital into the business. And, you know, you can get a lot of money for them, effectively funding our development for us, which is really fantastic.”

The value of the 15 gaming licenses compared to the overall venue sale price highlights how much gaming underpins the value of Queensland hotels as opposed to traditional hospitality.

One hotel broker has described Queensland as being in a ‘gaming boom’ due to the revenue generation and the value of gaming machines.

Heary said that the Sunshine Coast venue was aiming to be family-friendly with a focus on hospitality.

“What we’re trying to achieve there is an experience where people can come in and focus on trying our beer and the Matso’s products and then hopefully falling in love with them and then supporting us when they go to other venues or liquor stores,” he said.

“And we just don’t feel that gambling is essential to that experience that we’re trying to create.”

The company’s move to remove pokies follows similar decisions by other Sunshine Coast venues to create more family-friendly spaces without pokies.

Trading update

In its announcement to the ASX, Good Drinks also released a trading update saying it had outperformed the beer market.

The company advised the market that its own-brand packaged sales were up 5.2 per cent in the quarter, with draught sales up 37 per cent, with overall own-brand sales up 13 per cent.

The company cited IRI MarketEdge data that over the same period the total beer market had fallen 7.9 per cent, while craft held steady.

Heary said that the company’s growth had been had earned.

“It was very, very hard,” he said

“There were the interest rate rises, we had the container deposit scheme come into Western Australia, we’ve had inflationary pressures has been international shipping,” he said.

“And all businesses, in particular, the big guys are experiencing the effects of that, and it’s just made it much more competitive out there in pricing and for growth.

“So yeah, we’re definitely, experiencing that as well now.”

Heary said that the maturing craft market will make it harder for the industry to grow.

“I think the craft beer market is maturing, or it has matured, and so it’s unrealistic to expect that that market would just continue to just grow at double-digit levels forever,” he said.

“And I think now it’s at the size and maturity that it’s feeling the effects of the winds of the economy as well.

“And that’s certainly much more difficult for us and I’m sure other brands out there as well.

“But we’re very, very pleased to continue to grow and continue to outperform the market light of those those headwinds.”

Despite the growth, Heary said that inflation and competition had hit their margins hard.

“Yes, there’s been a hit to margin and in particular the international shipping issue was a real problem,” he said.

“We saw freight rates increase by 1,000 per cent and that has a real impact on raw material supply.

“It had a big impact on the costs, but we took a long-term view, and we continued to sell beer into the market at pricing that we felt was acceptable to the consumer and that reflected our brand and our brand promise.

“And that meant that we had to absorb some of those costs but thankfully now that shipping rates have returned back to normal those COGS have come back and normalised now.

“Moving forward and we feel that things are largely on track now.”