22 Jun 2012

Trans-Tasman cider business formed

8:24 pm on 22 June 2012

DB Breweries says it will put its cider operations into a new joint venture, so it can concentrate on the competitive beer market.

Asian-owned brewer has bought a majority stake in the Nelson-based Redwood Cellars for an undisclosed amount. Both companies already work together to produce Monteith's cider.

Cider operations of the two firms, including Monteith's, Old Mout, and Johnny Arrow, will be put into a new firm called Redwood Cider, which will make and distribute the brands throughout Australasia.

DB's managing director Brian Blake says the new arrangement best suits the fast growing cider market, which he says has sales worth about $70 million and is equivalent to about 3 percent of the beer market .

"The cider market internationally has shown huge growth," he says. "Cider in New Zealand in the last three years has been growing by an average of 70% a year.

"While the alcohol market is pretty mature, and beer is mature, cider is the emerging alcoholic category - we believe there is an opportunity to be the market leaders in that category," Mr Blake says.

Mr Blake will chair Redwood Cider while Redwood Cellars managing director Justin Hall will continue his role and will be a shareholder in the new company.

The cider brands will be distributed in Australia by Drinkworks, a DB subsidiary.