MILDURA Brewery could soon produce more craft beer after owner Broo announced a production deal with Carlton & United Breweries (CUB) for its main brands.

The Langtree Avenue-based Broo said CUB would produce and package its Broo Premium Lager and Australia Draught products as part of a two-year deal.

Broo said it anticipated placing an order with CUB for a minimum of 48,000 cases each quarter, with the first order expected in October.

A company spokesman told Sunraysia Daily brewing operations would continue in Mildura and said jobs would not be lost in Mildura.

The spokesman said Broo was committed to producing beer at the Mildura Brewery site.

"Yes, the company is looking to focus production at Mildura on emerging craft-styled beer and showcasing our head brewer Ryan Zeppel's outstanding abilities in this field," the spokesman said.

"Outsourcing the mainstay beers enables the company to reinvigorate local offerings and localised distribution."

Shares in Broo, which is listed on the Australian Securities Exchange, increased 47 per cent on Wednesday after the CUB news was released, closing the day at 2.5 cents.

Broo issued its latest quarterly update last month, when it told the market it had experienced a drop in trading activity due to the effects of the coronavirus.

It said Mildura Brewery was still producing beer under existing sale arrangements but its hospitality businesses were temporarily closed due to government restrictions.

Broo said it took $420,000 in customer receipts in the three months to June.

At the end of the quarter the business reported having $76,000 in the bank, after receiving government grants and tax incentives said to total $109,000 in the quarter.

It also raised $200,000 from issues of equity.