CHEERS ALL ROUND AS MORRIS BUYS SIX PUBS
Written on the 21 June 2012
WINEMAKER and markets king Terry Morris is now a pub baron.
The Carrara-based Morris has snapped up six pubs in the past 10 months in a surprise and speedy move into the Queensland hotel industry by his company Morris International.
Two properties were bought within a week of each other in mid-April.
The Tarampa Hotel, near Lowood north of Ipswich was settled on April 18, just six days after Morris acquired Boonah’s Australian Hotel.
Morris began building his pub portfolio when he bought the Dugandan Hotel in Boonah in June last year. He followed that by securing the Oasis Hotel in Dalby and the Westbrook Junction Tavern near Toowoomba five months later.
On May 10, he bought the Warehouse Tavern at Yatala.
Morris, the company chairman, did the deals in partnership with the company’s CEO Dean Merrell.
He says amassing the new licensed property portfolio has cost less than $10 million.
“Dean put the business proposal to me as a way of vertically integrating our wine business [Sirromet] and I agreed with it,” says Morris.
Morris says the pubs were good buys in a depressed market.
“A lot of land valuations are coming in and creating distressed sales, which is unfortunate for the people who owned them, but it has created some good business opportunities for us.
“In some cases we are in effect buying the land and what is on top of it is a bonus.”
He also sees the acquisitions as avenues to increase sales of his wine label, Sirromet.
“We have bought each of these hotels because we believe they are good investments, but they are also producing strong sales for Sirromet’s wines and growing our customer base,” says Morris.
Morris says his target is to sell approximately 20,000 bottles of Sirromet at each of our hotels. He is getting mixed results in the early days since settling on the pubs.
“Wine sales are better in restaurants at some hotels and in bottle shops at others,” he says.
Morris International has experience in the food and beverage industry, operating a Sirromet cellar door restaurant at its Mount Cotton headquarters in Redlands.
Morris believes pub customers generally want simple things – clean facilities, good food and cold beer. He has set those objectives for a new company formed to manage the pub holdings, Good Times Pub Group.
The hotel market in Australia is dominated by Woolworths and Coles, who between them own more than 20 per cent of outlets across the State.
Morris’ foray into licensed venues mirrors the buying spree undertaken by construction king Tom Hedley, who bought a string of pubs in north Queensland nearly 20 years ago. But in a spectacular crash in 2009, Hedley was forced to liquidate all of his heavily leveraged properties after the 2007 market collapse.
Morris believes his purchases are solid investments. All his pubs are in regional areas within driving distance of Brisbane and not far from Sirromet’s grape crops on the Granite Belt.
Morris says he will continue building his management team at Good Times Pub Group and, as the team grows, it will need more pubs to run.
“If the deals are okay, we will look at them. We are learning more as we go and there are some great opportunities out there,” says Morris.
“I am looking to get a certain return on all my investments.”