Two Rocky hotels in deal for Coles to keep its bottle shops

The hotels in north and south Rockhampton employ 75 staff

DEAL SEALED: Coles has stitched up a deal which will see them form a joint venture to get rid of their hotels and pokies while hanging onto their bottle shops. Picture: Rick Rycroft

TWO Rockhampton hotels employing 75 staff are part of a large joint venture allowing Supermarket giant Coles to relinquish control of its pubs and pokies business.

Following an extensive strategic review, Coles has attempted over the past year to sell its Spirits Hotel business - featuring 87 hotels, including Rockhampton's Berserker and Leichardt Hotels, and approximately 3000 poker machines - while also retaining its lucrative bottle shop empire.

Queensland's liquor laws had been a stumbling block to the sale because they stipulate to obtain a liquor licence for a bottle shop, the owner must already hold a commercial hotel licence for a pub within a 10km radius.

CHANGING HANDS: Ownership The Leichhardt Hotel will shift to Queensland Venue Co. Picture: Contributed

In a complicated deal, the Coles Group Limited entered into an incorporated joint venture with Australian Venue Co (AVC) to form 'Queensland Venue Co', allowing it to skirt Queensland's licensing laws and hold on to its 243 profitable Liquorland, First Choice, and Vintage Cellars bottle shops.

$200 million would also be paid to Coles as part of the deal for the pubs portfolio.

A Coles spokesperson made reassurances that the 75 Rockhampton staff members - 45 in the hotels and 30 in liquor retail - would keep their jobs, not be affected in any way by the change and the hotels would continue to trade as normal.

It was expected that this joint venture would help both the companies in expanding their own businesses in Queensland while focusing on their core competencies.

Subject to the satisfaction of the imposed conditions including consent from a small number of landlords, the transaction was expected to be completed by the end of the 2019 financial year.

Coles Chief Executive Officer Steven Cain said the agreement with AVC would enable each party to bring relevant expertise to the joint venture.

"Over the past 12 months Coles has undertaken an extensive review of its Spirit Hotels business to identify a suitable partner. AVC is a highly experienced and responsible operator of quality hospitality venues with their current portfolio of more than 60 hotels,” Mr Cain said.

"AVC has plans to grow the hotel portfolio in Queensland which will in turn provide Coles with the opportunity to further grow its Retail Liquor business in that state.

"I would like to thank all Spirit Hotels team members for their outstanding efforts in growing and improving the business over the past few years and, in advance, for their continued focus and commitment during the transition to the new structure.”

Originally published as Two Rocky hotels in deal for Coles to keep its bottle shops