Canadian Battle of The Beer

Canada's two largest brewers, Molson and Labatt, have recently seen slumping sales due to competition within the industry from discount beer sellers. Lakeport Brewing, Ontario's largest regional brewer, and Brick Brewing of Guelph have enjoyed increased sales in a stagnating Canadian beer market. Just as traditional retailers are losing customers to lower-priced Wal-Mart, Costco, and Target, Molson and Labatt aficionados are being lured to buy less expensive beer sold by Lakeport and Brick. With Molson/Labatt above $35 a case and the discounters below $24, the price difference is not insignificant. More beer for less money is a marketing theme that successfully appeals to any hoser. [Yes, they're Canadian dollars.]

To counter the threat from regional brewers, both Molson and Labatt lowered their prices but, so far, not enough. Meanwhile, shareholders will be asked to approve a merger between Molson and Adolph Coors Brewing on January 19. Points of contention on the proposed merger center on shareholder value and how the combination of family-control versus corporate-control will work. Either way the proposed merger vote comes out, it probably won't have a direct immediate impact on the market battle with regional discount brewers.