Labatt turns down bid for Lakeport brewery
Labatt Brewing Co. has said no to a bid to buy its shuttered Hamilton brewery, said the company making the offer on Wednesday.
Winnipeg-based Minhas Creek Brewing Co. said Labatt refused to sell the smaller brewery any of the equipment from its Lakeport facility.
"The Minhas Creek Brewing Company is horribly disappointed that Labatt didn't feel it was worth their time to explore any possibility of a deal," said Minhas in a press release announcing the rejection.
Minhas said it wanted the plant's equipment and to lease the facility to produce beer in Hamilton.
In March, Labatt closed the Lakeport operation, which the company had purchased for $200 million in 2007.
At the time of the closure announcement, Labatt said it wanted to centre production of Lakeport's discount brands at the bigger company's plant in London, Ont., and would take the equipment to that facility.
Minhas, which makes Tundra Ice among other brews, wanted Labatt to sell it the beer-making gear to allow Minhas a faster entry into the Hamilton market.
Labatt will not move the assets and is simply interested in keeping a competitor from opening up in the same territory, Minhas said.
"[We] suspect the vast majority of this brewing equipment will sit in the Hamilton facility and will simply collect dust until it is cut out for scrap metal," the company said.
Strategy the same
For its part, Labatt said its strategy regarding Lakeport's assets has remained the same.
"Since we announced the closure of our Hamilton brewery, we've consistently said that our equipment is not for sale and we're using it in our national brewery network," said Jeff Ryan, Labatt's director of corporate affairs.
Labatt is owned by beer giant Anheuser-Busch InBev.
Industry experts noted that Minhas's strategy of reopening the Hamilton plant and selling discount — also called value — beer would be difficult.
"It is becoming increasing more difficult for brewers of value beer to protect and increase their share of the value beer segment," said Kevin Meens, chief operating officer of Cool Beer Brewing Co., a small Toronto brewery.