Gage Roads shares are on a tear on a new craft beer deal with Woolworths

Michael Dodge/Getty Images

Gage Roads Brewing, the maker of Atomic Pale Ale and Narrow Neck Session, has extended its distribution deal with Woolworths for another three years.

A short time ago, Gage Roads shares were up more than 6% to $0.050.

The Perth-based company says it has a three-year extension, with a further two-year option, on its supply and distribution agreement with Pinnacle Liquor, a subsidiary of the recently re-named Endeavour Drinks Group, formerly Woolworths Liquor Group.

Gage Roads says its proprietary craft beer portfolio is growing strongly.

In its latest quarterly report, sales of proprietary craft beer products were up 86%.

“The overall beer market is slowing, primarily due to the decrease in volumes in mainstream beer sales,” says managing director John Hoedemaker.

“In contrast, the higher-value craft beer sector has been improving year on year, as Australians’ tastes evolve and become more accepting of beers produced by smaller craft brewers.”

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.