Labatt Brewing Company - History

History

In 1915, Prohibition began in Canada when public bars were banned in Saskatchewan. A year later prohibition was instituted in Ontario as well, affecting all 64 breweries in the province. Although some provinces totally banned alcohol manufacture, some permitted production for export to the United States. Labatt survived by producing full strength beer for export south of the border and by introducing two "temperance ales" with less than two per cent alcohol for sale in Ontario. However, the Canadian beer industry suffered a second blow when Prohibition began in the U.S. in 1919. When Prohibition was repealed in Ontario in 1926, just 15 breweries remained and only Labatt retained its original management. This resulted in a strengthened industry position. In 1945 Labatt became a publicly traded company with the issuance of 900,000 shares.

John and Hugh Labatt, grandsons of founder John K. Labatt, launched Labatt 50 in 1950 to commemorate 50 years of partnership. The first light ale introduced in Canada, Labatt 50 was Canada’s best-selling beer until 1979.

In 1951, Labatt launched its Pilsener Lager; when it was introduced in Manitoba, the beer was nicknamed "Blue" for the colour of its label and the company's support of Winnipeg's Canadian Football League (CFL) franchise, the Blue Bombers. The nickname stuck and in 1979 Labatt Blue claimed top spot in the Canadian beer market. It lost this status in the late eighties to Molson Canadian, but over the next decade, periodically regained top spot as consumer preferences fluctuated. In 2004, Budweiser took the top spot, pushing Blue to third for the first time in twenty-five years. However, since Labatt has brewed Budweiser (and other Anheuser-Busch products) in Canada under licence since the 1980s, Labatt likely did not suffer from this shift. Moreover, Labatt Blue remains the best selling Canadian beer in the world based upon worldwide sales.

Labatt was also the majority owner of the Toronto Blue Jays from their inception in 1976 until 1995, when Interbrew purchased Labatt.

Labatt's innovations include the introduction of the first twist-off cap on a refillable bottle in 1984. In 1989, Labatt's had the opportunity to hire Canadian model Pamela Anderson as a Labatt's Blue Zone Girl after she was picked out of the crowd by a TV camera man at a BC Lions football game wearing a Blue Zone crop-top. Photographer and boyfriend, Dann Ilicic, produced the Blue Zone Girl poster on his own after Labatt's refused to have anything to do with it. Later, Labatt's did buy 1000 posters to deal with consumer demand.

In 1995, Labatt was acquired by the large Belgian multinational brewer InBev (then Interbrew), the world market leader.

Labatt is part-owner of Brewers Retail Inc., operator of The Beer Store retail chain, which—protected by legislation—has over 90% market share of Ontario off-premise beer sales.

In early 2007, Labatt also acquired Lakeport Brewing Company of Hamilton, Ontario.

In 2009, the company sold Labatt USA, including the American rights to its core Labatt products (such as Blue, Blue Light, and Labatt 50) to North American Breweries, and agreed to brew those brands on Labatt USA's behalf until 2012. This sale was mandated by the U.S. Department of Justice for competitive reasons following InBev's merger with Anheuser-Busch, since Budweiser and Labatt Blue were both among the top brands in upstate New York, despite the latter having less than 1% market share in the U.S. overall.

The sale did not include U.S. rights to Labatt products not carrying the "Labatt" label, such as Kokanee or Alexander Keith's, which are now distributed in the U.S. by Anheuser-Busch. Moreover, the underlying intellectual property (such as the Labatt trademarks) remains the property of the Canadian firm. Finally, the sale did not affect Labatt's Canadian operations in any way; Anheuser-Busch InBev retains full control of the Labatt brand portfolio within Canada.