Coca-Cola Amatil (CCA), an Australian company that bottles and distributes The Coca-Cola Company’s soft drinks and beverages, has signed a new brewery deal with Australian Beer Company (ABC), a part of the Casella Group, as its first step to re-enter into the Australian premium beer market.

Under the deal, CCA will provide a loan of around $46m to ABC to acquire, expand and turn a facility in Griffith, New South Wales into a brewery with annual brewing capacity of 500,000 hectolitres.

The loan from CCA will be converted into a joint venture equity interest in the ABC, under which the joint venture will look after beer manufacturing and brand development activities, while CCA will handle the sales, distribution and customer relationship development and management activities.

For sales and distribution activities, CCA eyes acquisition of Fiji brewery and distillery and also plans to sign distribution deals with Grupo Modelo, Carlsberg and Molson Coors in the Pacific Islands.

As CCA does not have rights to sell, distribute or manufacture beer in Australia until 16 December 2013, the proposed activities will be performed by ABC only after that period.

CCA managing director Terry Davis said this new agreement with Casella will give CCA the opportunity to access a brewery that will enable us to re-enter the premium beer market in Australia after 16 December 2013 with sufficient initial manufacturing capacity to cater to approximately 15% of the premium beer market in Australia.

"CCA’s large scale sales and distribution expertise and experience, combined with the draught and packaged brewing capability of the Australian Beer Company, will provide international beer companies after 16 December 2013 with a uniquely independent route to market in Australia and the ability to partner with the leading non-alcoholic beverages and spirits partner for the licenced trade," Davis added.

Casella Wines managing director John Casella said the agreement also marks a new chapter for Casella and its expansion into the beer category.

"A partnership with CCA, when it occurs, will give us tremendous scope to grow our brewing operations and we look forward to the exciting opportunities that lie ahead," Casella added.