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Swan back into pubs

THE Swan Brewery has embarked on an $8 million spending spree to renew its flagging status as the major WA beverage producer with a new strategy of investment in high profile licensed premises.

Backed by its Sydney corporate headquarters of parent Lion Nathan, Swan has successfully tendered for the icon sites of Rottnest Island and the old Swan Brewery site on Mounts Bay Road.

Swan also confirmed the brewery had won its bid for licensed premises at the old Swan Brewery site, where the company planned to spend about $3 million developing a restaurant and bar facility.

The move is a big shift for Swan which used to be a big hotel operator in the State, running 42 hotels until it sold most of those in 1986 and eventually quit its last outlet, the Kelmscott Inn, in 1995.

Rival Melbourne-based Carlton and United Breweries runs several high profile WA pubs such as the Sail and Anchor in Fremantle, The Queens in Highgate, The Brass Monkey in Northbridge, The Captain Stirling in Nedlands and The Como.



Swan managing director Mike Molloy was told of the Rottnest win last week, but did not know how soon the plans for the brewer’s $5 million venture with publican Geoff Ogden would be released.

Mr Molloy dismissed fears of a big hotel complex, claiming Swan was focused on using the venue to showcase its beer, not become a major provider of accommodation. He denied speculation that the Swan proposal contained 60 rooms.

“It is nowhere near 60 (rooms),” Mr Molloy said.

“It is complementing the function areas. We don’t want to run a motel area but if we want to have weddings and 21sts to provide some accommodation.”

Swan will instead refurbish the existing 18 units at the Rottnest Hotel and add a similar number, reserving some room for expansion in the future.

“This a great win. So many people in WA visit Rottnest from now to Easter, it is a tremendous opportunity for us to be involved in the whole community.

“Beer volume and profits that the hotel generates are secondary. What is important is we have access to a great cross section of the community in WA.”

“The real market is the local people.”

Mr Molloy said the Mounts Bay site provided an opportunity to create a historical centre.

n Mark Pownall

ROTTNEST could have had its own listed company if an innovative pitch by Boat Torque’s Trevor Kitcher to redevelop the island’s hotel had succeeded.

The submission design included a 108-room four-star hotel complex with a wide range of bars and restaurants, powered by natural gas delivered daily by Boat Torque’s regular fast ferry runs to Rottnest.

The two-stage development involved seeking $25 million from the public to create a listed entity over which the WA Government would have a put option, allowing the State to resume ownership of the buildings before the lease period was completed.

“This way you only have to service the interest component, which is shareholders return,” Mr Kitcher said.

He said that the rather than paying interest on debt and then looking for a profit margin on top of that, shareholders would expect a yield above interest rates which would dictate the price of the shares.

“You could have virtually doubled the amount you put into the project.”

Mr Kitcher’s proposal did not make the final shortlist of five but was understood to be the only one involving a public float.

Among those which moved in among the final five was a proposal from Blue Duck Café operator Kim Gamble and a consortium led by Carlton & United’s Australian Leisure & Hospitality group which also included developers Tony Unmack and Denis Marshall.

Mr Gamble’s proposal was believed to have included Bali-style chalets and the ALH syndicate lodged a non-conforming bid to build a $5 million waterfront hotel near the Army Jetty south of the existing hotel.

The State Government has yet to release the designs chosen by the Rottnest Island Board but Tourism Minister Norman Moore has said the plans would be displayed on the island for public comment when negotiations with Swan were complete.

The decision to choose a winner during the sensitive pre-election period has been criticised by opponents of the development and at least one losing tenderer.

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