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Canada: Canadian brewing giant Labatt is echoing the concerns of Moosehead Brewery about a deal to give millions to their competitor Molson, and wants to meet with the province to discuss the situation, nb.cbc.ca posted on November 23. New Brunswick has offered Molson millions to set up a brewery in Moncton by 2007. The deal has been heavily criticized by Moosehead Brewery and Labatt has now waded into the fray.

Labatt is the largest beer retailer in New Brunswick. It accounts for half the beer sold in the province. Labatt's Jean Lepine is worried the deal with Molson will create unfair competition. "We welcome Molson to the Maritimes, that is not an issue for us. What is an issue for us is that the marketplace be fair and equitable."

Two weeks ago, New Brunswick Premier Bernard Lord announced the province was putting up $6 million to help Molson build a brewery in Moncton, creating 40 jobs. Moosehead Brewery Chairman Derek Oland immediately condemned the premier's deal as being bad for his Saint John company, and now Labatt is raising its own questions.

Part of New Brunswick's deal with Molson is the immediate elimination of tariffs on Molson beer being sold by the New Brunswick Liquor Corporation, even though its New Brunswick Brewery won't be built for two years. Labatt will still have to pay some of those tariffs on beer it sells, and says that's not fair.

For example, all Labatt beer made in Quebec is subject to a $2.40 per case charge when it comes into New Brunswick, while Molson beer made in Quebec is now free of that charge. "Essentially they're providing Molson an advantage prior to them bottling their first beer or brewing their first beer," says Lepine. "In our estimation that is an issue, so we'll be looking at all the options available to us and hope for an early opportunity to discuss this with provincial officials in New Brunswick."

Labatt pays about $300,000 in the same New Brunswick beer tariffs that Molson is now free of. Lepine says it hopes a meeting with the province can fix that imbalance, with a deal that could make the cost of New Brunswick's Molson brewery even steeper for taxpayers.


24 November, 2004