2010-03-31

143 Lakeport Workers Casualties Of Beer Wars

It has taken three years to write the final and seemingly last chapter of the Lakeport Brewery story.

The ending is filled with tugs of war between brewing giants and competition authorities on both sides of the border. In the United States, Labatt parent InBev was ordered last fall to sell off Labatt USA in order to secure a deal to buy American giant Anheuser-Busch. In Canada, Labatt was involved in a tussle with the Competition Bureau for almost two years following its purchase of Lakeport in February 2007 in a $201.4-million deal.

The federal bureau, which investigates mergers and acquisitions to ensure the marketplace remains competitive, immediately began a review.

The following month, the bureau filed an application to block the Lakeport deal with the Competition Tribunal, a judicial body with the power to lay charges and make competition rulings.

The Labatt-Lakeport deal closed on March 29 and the tribunal dismissed the bureau's application to block it.

Late in 2008, Labatt complained in a court case that the review was taking too long and the bureau was asking for too much information.

The court ruled in Labatt's favour.

The bureau announced in January 2009 that it had concluded its review.

The bureau cannot reveal what it was investigating in the Labatt case, said spokesperson Alexa Keating. But the bureau consulted with industry experts, economists and industry players and determined "there is insufficient evidence to establish that the transaction is likely to substantially lessen or prevent competition."

Some in Hamilton believe that Labatt bought the plant with the intention of closing it and eliminating a pesky competitor eating into its bottom line.

But McMaster University business professor Marvin Ryder said the Competition Bureau would have likely uncovered that in its review.

Labatt officials said the decision to close the Burlington Street plant is based only on inefficiencies in the plant and a need to rationalize production.

George Croft, chief executive of Brick Brewing in Waterloo and former president and chief operating officer at Lakeport, said it looks now that the bureau had every right to be concerned about the sale.

"This has played out faster than I ever thought it would," said Croft, who worked at Lakeport between 2005 and '07.

He said his company now stands out in a sea of foreign-owned breweries, many of which use Canadian imagery to sell their suds.

"The thing about consumer goods is that consumers have the opportunity to vote every time they buy a box of beer," Croft added.

"They can make a significant impact on these companies."

(Mar 31, 2010) Meredith MacLeod - The Hamilton Spectator - mmacleod@thespec.com

905-526-3408