Pirate Life Brewing founders have accused parent company CUB, under Asahi, of misleading and deceptive conduct that allegedly led to almost $25 million loss.
Pirate Life Brewing founders have accused parent company CUB, under Asahi, of misleading and deceptive conduct that allegedly led to almost $25 million loss.
Michael Cameron, his son Jack Cameron, and Jared Proudfoot have lodged a claim in the Federal Court of Australia’s Western Australian registry, naming CUB Investments and CUB Pty Ltd as respondents.
The trio, who founded Adelaide-based Pirate Life, claimed CUB misrepresented how much the business would sell under the acquisition and failed to support the company’s sales.
Other applicants in the claim include M2 Assets, owned by Mace Turco, and Teesdale Investment and Management, owned by Perth-based investor Tony Dale.
In the statement of claim, the Pirate Life founders and investors alleged a loss of $24.4 million because of CUB’s misleading and deceptive conduct.
CUB, formerly under Anheuser-Busch InBev, acquired Pirate Life under an agreement that proposed a $16.25 million payment to the applicants in 2020 and $25 million in 2022, according to the claim.
The applicants alleged during their discussions in 2017, CUB projected volume growth in Pirate Life products sold from about 2.3 million litres in 2018 to 5.6 million litres in 2022.
However, in their claim, the applicants alleged CUB did not take proper modelling necessary to support the sales volume forecast and had no plan to engage its sales and marketing teams to support the sale of Pirate Life products after the acquisition.
Asahi bought Anheuser-Busch InBev in 2020, which included CUB or Carlton United Breweries.
Pirate Life collaborated with Sneakers and Jeans to open a three-storey venue on Murray Street, Perth, in 2021.
According to the claim, Michael Cameron voiced his concern on hitting a sale of seven million litres in three years’ time at a 2017 meeting.
CUB representative Peter Filipovic allegedly told Mr Cameron not to worry because CUB would place Pirate Life product on tap in each venue where another one of its products, Carlton Draught, would also be on tap, the claim shows.
The applicants claimed, in their statement, that CUB only allocated 3.3 per cent of its beer taps to Pirate Life products as of February 2023.
It is alleged CUB Investments failed to ensure there were any Pirate Life products included in its core range at its premises in 2020 and 2022, applicants said in their claim.
The applicants also alleged CUB failed to support Pirate Life to increase the volume of its products sold globally through Asahi’s or its subsidiaries international asset channels.
In their claim, the applicants alleged CUB Investments positioned Pirate Life as a regional brand and provided reasonable support to sell its products through sales channels in Western Australia and South Australia, but not in Victoria, New South Wales and Queensland.
The applicants said New South Wales and Queensland were the two largest domestic markets for beer sales.
A CUB spokesperson told Business News that the company has worked hard to promote and grow Pirate Life since the acquisition in 2017.
“This includes making a considerable investment to build a new Pirate Life brewery in Adelaide in 2018 to expand Pirate Life’s production capacity and help achieve their sales targets,” the spokesperson said.
“CUB has paid the founders of Pirate Life more than $16 million under the terms of its sale agreement.
“Pirate Life could have earned a greater payment if not for general underperformance in a very competitive market, and if not for the COVID lockdowns, which regrettably impacted beer sales across Australia.
“We respect the Pirate Life founders, but we disagree with their claim.”
Jack Cameron and Mr Proudfoot moved from Perth to Adelaide to set up Pirate Life in 2014, with the help of Michael Cameron.
