Labatt buying Mill Street Brewery is actually not a bad thing for craft beer fans
Early this morning, Labatt, one of Canada’s largest and oldest brewers, announced that it had purchased Toronto craft brewery Mill Street. Aside from an announced $10 million investment in Mill Street’s Toronto facilities, the terms of the deal are confidential— but it’s safe to assume that the exact dollar amount is in the range of one or two shit-tons of cash. And while a lot of Ontario craft beer fans are quick to cry “sellout,” it’s probably best to consider this deal with a level head. Put down the pitchforks, guys. (Where did you even get those things?)
First, this is not the only time a large brewery has purchased a Canadian craft brewery to get some leverage in the craft-brew market (see: Molson buying Creemore). This same sort of thing is becoming a trend in the United States, where craft beer has, by some estimates, 11 per cent of the market, and large breweries are desperate to find a way to stem the tide. In the last few years, craft brewers Pyramid, Magic Hat, Anchor Steam, Kona and Goose Island have all been bought up by big companies, Goose Island for a reported $38.8 million. AB InBev, the Belgian-Brazilian company that owns Labatt, has spent the past five years buying up New York’s Blue Point Brewery Co., Oregon-based 10 Barrel Brewing, and Seattle’s Elysian. By the time I finish writing this article, they’ll probably have bought someone else.
Is it even possible for a company like Mill Street to “sell out,” anyway? Mill Street has always brewed fairly approachable beers with mainstream appeal as a means of growing its business and, presumably, getting big and successful, and its beer has never been favoured by the kinds of bearded connoisseurs who swirl barrel-aged brews. The company has already been quietly distributing its products in the United States for a while. In terms of marketing and distribution dollars, it operates in a totally different league than the little brewpub around the corner from you. It’s not (or shouldn’t be) surprising that a brewery that always had its eye on financial success has accepted a (presumably huge) buyout offer.
If you like Mill Street Brewery—that is, if you actually like the people working at the company and making the beer—this buyout is clearly good news. According to the press release this morning, the company’s principals will still be at the helm of Mill Street under Labatt. Mill Street’s very talented brewmaster, Joel Manning, will still be making the beer. It’s simply that Manning and his friends who run the company are suddenly in higher tax brackets. And so good for them. There are many different ways to measure success, and having a buttload of money backed up to your front door in exchange for the company you built is one of them.
And if you really like drinking Mill Street beer, then this whole deal is a good thing for you, too. The same people who make the beer you like will still be making it, only now they’ll have access to the vast, Scrooge-McDuck-swimming-in-a-sea-of-gold levels of wealth and resources behind AB InBev, the largest beer company in the entire world. Mill Street’s brewmasters will now be able to obtain any and all ingredients they could ever dream of brewing with, the Mill Street brand will be able to grow by means of one of the universe’s most aggressive marketing machines, and the beer that Mill Street brews will now enjoy distribution across the entire country (and likely some other countries, too).
There aren’t that many places in Canada where you can’t get a Mill Street beer, but pretty soon there will be even fewer. In other words, pitchfork-wielding craft beer fan: Mill Street beer isn’t leaving us. In fact, it’s about to be everywhere.
And if I still haven’t convinced you to call off the riot, consider this: next year at the Rogers Centre, hopefully while we’re watching the Blue Jays on their way to raising their fourth World Series banner, there’s even a slim chance we might be able to do so while sipping a beer that was actually made in Toronto.
![](http://www.facebook.com/sharer.php?u=https://torontolife.com/food/labatt-buying-mill-street-brewery-is-actually-not-a-bad-thing-for-craft-beer-fans/&title=Labatt buying Mill Street Brewery is actually not a bad thing for craft beer fans&picture=https://torontolife.com/wp-content/uploads/2015/10/mill-street-brewery-2000x1333.jpg&description=Early this morning, Labatt, one of Canada’s largest and oldest brewers, announced that it had purchased Toronto craft brewery Mill Street. Aside from an announced $10 million investment in Mill Street’s Toronto facilities, the terms of the deal are confidential— but it's safe to assume that the exact dollar amount is in the range of one or two shit-tons of cash. And while a lot of Ontario craft beer fans are quick to cry "sellout," it’s probably best to consider this deal with a level head. Put down the pitchforks, guys. (Where did you even get those things?)
First, this is not the only time a large brewery has purchased a Canadian craft brewery to get some leverage in the craft-brew market (see: Molson buying Creemore). This same sort of thing is becoming a trend in the United States, where craft beer has, by some estimates, 11 per cent of the market, and large breweries are desperate to find a way to stem the tide. In the last few years, craft brewers Pyramid, Magic Hat, Anchor Steam, Kona and Goose Island have all been bought up by big companies, Goose Island for a reported $38.8 million. AB InBev, the Belgian-Brazilian company that owns Labatt, has spent the past five years buying up New York’s Blue Point Brewery Co., Oregon-based 10 Barrel Brewing, and Seattle’s Elysian. By the time I finish writing this article, they'll probably have bought someone else.
Is it even possible for a company like Mill Street to "sell out," anyway? Mill Street has always brewed fairly approachable beers with mainstream appeal as a means of growing its business and, presumably, getting big and successful, and its beer has never been favoured by the kinds of bearded connoisseurs who swirl barrel-aged brews. The company has already been quietly distributing its products in the United States for a while. In terms of marketing and distribution dollars, it operates in a totally different league than the little brewpub around the corner from you. It's not (or shouldn't be) surprising that a brewery that always had its eye on financial success has accepted a (presumably huge) buyout offer.
If you like Mill Street Brewery—that is, if you actually like the people working at the company and making the beer—this buyout is clearly good news. According to the press release this morning, the company’s principals will still be at the helm of Mill Street under Labatt. Mill Street's very talented brewmaster, Joel Manning, will still be making the beer. It’s simply that Manning and his friends who run the company are suddenly in higher tax brackets. And so good for them. There are many different ways to measure success, and having a buttload of money backed up to your front door in exchange for the company you built is one of them.
And if you really like drinking Mill Street beer, then this whole deal is a good thing for you, too. The same people who make the beer you like will still be making it, only now they'll have access to the vast, Scrooge-McDuck-swimming-in-a-sea-of-gold levels of wealth and resources behind AB InBev, the largest beer company in the entire world. Mill Street’s brewmasters will now be able to obtain any and all ingredients they could ever dream of brewing with, the Mill Street brand will be able to grow by means of one of the universe’s most aggressive marketing machines, and the beer that Mill Street brews will now enjoy distribution across the entire country (and likely some other countries, too).
There aren’t that many places in Canada where you can’t get a Mill Street beer, but pretty soon there will be even fewer. In other words, pitchfork-wielding craft beer fan: Mill Street beer isn’t leaving us. In fact, it’s about to be everywhere.
And if I still haven’t convinced you to call off the riot, consider this: next year at the Rogers Centre, hopefully while we’re watching the Blue Jays on their way to raising their fourth World Series banner, there's even a slim chance we might be able to do so while sipping a beer that was actually made in Toronto.){kind=link}
And Lagunitas too…who I thing railed against the big guys for so long, but wanted growth that banks could not offer I imagine!
Tell me it’s a good thing that my beer money is, in part, leaving the country, and then tell the out-of-work employees of Lakeport Brewery how great it worked out for them. The big fish are eating the little fish all over the world, and, unless you are a stockholder (and I’m not), it is not a good thing.
There are a number of salient points that, as usual, get ignored by the cheerleaders who laughably practice what is called business “journalism.”
First, why use the name Labatt? The real entity is AB Inbev and the decisions affecting Canada are made by Brazilians, an indication that international business regards Canada as a third world market, an issue you will never see addressed in the business pages. I digress.
Second, there is no way Mill street’s already stretched Scarborough plant can produce the millions of extra litres that will soon be arriving on the taps of AB Inbev’s tied houses. Organic Lager and possibly Tankhouse will likely be produced in London or Creston, BC and subjected to the “efficiencies” demanded by the Brazilian, American and Belgian masters. They are already brewing Goose IPA, and while it’s a decent drink, I suspect it pales in comparison with what was coming out of Chicago 20 years ago.
This is where the Creemore example is instructive. Molson was bound by a five year agreement to leave it alone, and indeed they invested heavily in the brewery and widened its distribution. Now that the 5 years have passed, is Creemore the same? Not if you ask me. Molson Coors seem determined to make Creemore just another brand, like Rickards or Keiths. Their pilsner was remade into Lot 9 and seriously dumbed down to a hoppier Canadian. Creemore was a fixture at my pub for ages, selling a steady 50L/week until a couple of years ago, when sales dropped off a cliff. The regulars, without ever saying anything, must have noticed a change. Attempts to win them over to the growing number of seasonal and Mad&Noisy concoctions were a dismal failure. It doesn’t really matter, you can now get Creemore at all of Molson Coors’ tied houses.
“Tied houses”, pubs which are owned by breweries are, of course, illegal. What we do have is a system in which many bar owners and manages are (ahem) induced to favour one of the big brewers at the expense of others, especially real craft brewers. AB Inbev reps can now help out their friends behind the bar who have been facing a growing demand from consumers for craft beer with “Hey! We got the Mill St. brands – I mean – beers!”
I’m happy for the folks at Mill St,. who have worked hard to build a successful company and are now seeing a well-earned financial reward for their efforts. I’m not convinced consumers will benefit, apart from finding Organic among the Bud, Keiths and Stella at a sports bar. Licensees can now say “we do have local craft beer” while AB Inbev and Molson Coors (and Moosehead to a limited degree) continue to use their bribes to shut mom-and-pop craft brewers out of a big chunk of the draft market.
It may not be bad for Mill Street drinkers. But it is most definitely a bad thing for craft beer drinkers. Mill Street’s beers will now be significantly cheaper to produce given their new AB InBev access to ingredients, packaging materials, etc. Dealing with the scale at which AB InBev acquires these materials, Mill Street will now have a very wide pricing advantage over the other small brewers they are currently competing with (the playing field just got very sloped). We’ll see a lot more Mill Street around because of undercutting prices on kegs, or the usual AB InBev kickbacks associated with their distribution. Why carry a Black Oak Pale Ale when there’s a lot more profit in the Mill Street keg (is how the bar owner will see it). Might as well replace that Left Field Resin Bag with a Goose IPA too! Given the convenience of being on the same truck, oh and they’ll throw in some umbrella’s too.
Spot on Dudley. This is just the way it works, but happily there are always new smaller guys that deserve, and get a chance when guys get bought out.
The problem to me is simple. Instead of supporting a local business in Toronto, with dollars supporting the Ontario and Canada in economy– every pint, every 6 pack and every sale Mill Street now makes– the dollars are taken out of our economy and instead go to an offshore foreign conglomerate.
Every time you buy a beer that isn’t from a Canadian owned and operated local brewery — you send you hard earned money offshore to another country. Why do that when local Canadian breweries are brewing some of the best beer in the world? Choose to support here at home, Canada, Ontario and Toronto needs it. Be smart when you buy your beer, think about where your money is going.