2007-02-02

Labatt Brewing Buys Discount Beer Maker

NewsTrack - Business
Published: Feb. 2, 2007 at 5:11 PM

LONDON, Ontario, Feb. 2 (UPI) -- Labatt Brewing Co., Canada's largest brewery, says it will buy a fast-growing discount beer maker for $170 million in a deal some fear will end cheap suds.

The London, Ontario, company offered $23.65 per unit of Lakeport Brewing Income Fund of Hamilton, Ontario.


Lakeport closed at $23.55 on the Toronto Stock Exchange Friday, down 4 cents or 0.14 percent.


The deal still faces stockholder and regulatory approvals.


"As a beer drinker, I think this is really bad news," Consumers' Association of Canada President Bruce Cran told The Toronto Star.


Lakeport popularized "buck-a-bottle" beer, charging $24 for a case of 24 beers, nearly a third less than mainstream rivals' prices for their top brands. "It's fair to say the principal objective of this deal was to end the price erosion of (Labatt's) mainstream brands," Veritas Research analyst Peter Holden said.

Labatt is owned by InBev of Leuven, Belgium, the world's largest producer of beer by volume. InBev, which trades on the New York Stock Exchange as Ambev, closed at $52.24 Friday, down 22 cents or 0.42 percent.
On the net at http://www.upi.com/NewsTrack/Business/20070202-051158-7142r/