Labatt buys discounter
Acquisition of Lakeport could raise industry pricing
Feb 1, 2007 - Labatt has bid $201 million to take over discount beer leader Lakeport Brewing.
Industry experts said the deal could put a cap on the cheap-beer segment as Labatt uses the Hamilton-based brewer as a way to lure back drinkers to its own brands.
David Hartley, a beverage analyst at Blackmont Capital, said the move has the potential to slowly change the way beer is sold in Canada. "The idea is to bring the pricing for the industry up as a whole, and this deal might do that over time," he said. "There's an opportunity here for Labatt to trade drinkers up to higher-priced brands."
Lakeport had posted record profits selling suds in Ontario at a fraction of the usual price. "I think there's an attempt to kill off the discount category, but it won't be easy," Hartley added.
With the acquisition Labatt will become the largest beer company in Canada, passing Molson Coors/
Lakeport essentially created the thriving discount segment with its dollar-a-beer concept and gained 12% market share in Ontario.
Published : Feb 1, 2007
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