E-Malt.com News article: Canada, NS: Jobs at Oland Brewery saved for the time being courtesy of the US Department of Justice

Some jobs at Halifax’s Oland Brewery have been saved, at least for the time being, courtesy of an unlikely source — the U.S. Department of Justice, The Chronicle Herald communicated on April, 9.

Last November, Labatt Breweries of Canada, which owns the Agricola Street brewery, announced some production of Alexander Keith’s India Pale Ale — Nova Scotia’s most popular beer — was moving out of the province at a cost of up to 40 full-time and temporary jobs.

Layoffs at the Oland’s Brewery location were slated to take effect in February or March as more production of the popular Keith’s brand moved to plants operated by Labatt in British Columbia, Ontario, Quebec, and Newfoundland and Labrador.

"We have not laid off any full-time unionized staff at this point," Wade Keller, a spokesman for Labatt in Halifax, said in an interview.

"We’re brewing at a pretty high capacity right now and we expect to be doing that for the next several months. And then, of course, we’ll be into the summer season, which is typically when full-time employees will be taking vacation.

"So we’re very hopeful that we won’t have any layoffs for at least the next five or six months."

The brewery is now making Labatt Blue for the U.S. market, he said, noting the new work is part of the fallout from brewing giant InBev’s purchase of Anheuser-Busch in 2008.

As part of that acquisition, the U.S. Department of Justice forced InBev to sell Labatt USA. When North American Breweries bought Labatt’s U.S. operation in early 2009, it was given three years to shift production of its Labatt brands to a company other than Labatt.

"In 2007, when the Anheuser-Busch deal was being completed, the U.S. Department of Justice ruled that Labatt would not be able to brew Labatt Blue for sale in the U.S.," said Keller.

"So a company that imports Labatt Blue called North American Breweries had to find somebody else to do it. That was a pretty big hit for our company because there was a fair amount of Labatt Blue being sent into the U.S. from our breweries."

The ruling was to prevent unfair competition, Keller said.

"AB InBev would have controlled too much of the beer market in the U.S."

North American Breweries, which is based in Rochester, N.Y., had contracted out Blue production to Labatt archrival Molson-Coors.

But Molson hasn’t been able to start making Blue for drinkers south of the border yet, so a portion of the work has come to Halifax for the time being, Keller said.

"We know that’s going to have to stop at some point," he said. "At some point, Molson will do this. But at this point, we’re still doing it."

Two managers at the Agricola Street operation retired and three other non-unionized positions were eliminated after the layoffs were announced, and the brewery is down to 10 temporary employees from a high of 17, Keller said.

"We need to be very upfront. At some point, we will stop brewing the Labatt Blue for the United States . . . and our work force will be smaller."

But the company has been working with the union to push retirements instead of layoffs, Keller said.

"Many of the jobs that will eventually be lost will be lost through attrition rather than layoff," he said.

"There’s a scenario, a very real scenario, that we can get through this with very few if any unionized full-time employee layoffs."

The brewery employs about 200 people.

Near capacity right now, it can produce just over a million hectolitres of beer a year. Twelve cases of 24 bottles equal approximately one hectolitre.

The market is soft right now, Keller said.

"The No. 1 thing we need is people in the Maritimes drinking our beer," he said. "The more people enjoy our product, then the more volume we need to produce and the more jobs we have."

Labatt is investing C$9.5 million in the Agricola Street brewery this year that will allow it to make more Budweiser, he said. The money will also be spent on building improvements and water reduction, which saves the company money.

For example, the company is capturing water used to rinse tanks a second time to do the first rinse on other tanks.

"In Halifax alone, over the past four to five years, we’ve reduced our water usage by 22 per cent" Keller said. "That is enough to fill 23 Olympic-size swimming pools."


13 April, 2011