As part of the 7 year distribution arrangement, Jihua will purchase the Broo Premium Lager beer products that are manufactured in China directly from Broo’s approved manufacturers in China. Jihua will fund the marketing and promotional costs associated with the brand in China. This agreement is structured to provide Broo with enormous reach and platform to compete with the major International beer brands currently available in China with minimal implementation overheads. The Agreement is binding on a ‘Take or Pay’ basis for 1.5 Billion litres of Broo Premium Lager beer products over the 7 year period with Jihua paying a fixed rate per litre. Based on the full seven (7) year term of the distribution arrangement, the aggregate distribution revenue generated for Broo is RMB602 million (approximately AUD $120 million). Jihua have committed significant upfront marketing and advertising funds to expedite the growth volume of Broo in the first three 3 years of the distribution, and Broo has agreed revenue payments for that term can be accrued and paid upon completion of the 3rd year, with payments continuing on a 6 – monthly basis thereafter
BEE Price at posting:
21.5¢ Sentiment: Buy Disclosure: Held
