Reward: $2m for beer plant tenant
Labatt offers Hamilton cash if it can find 'qualified' replacement for Lakeport
April 21, 2010
Steve Arnold
The Hamilton Spectator
http://www.thespec.com/News/Business/article/755682
Labatt Breweries has offered the city more than $2 million to help find a new tenant for its Hamilton beer plant.
The only proviso is that tenant can't be another beer maker and must give first consideration for jobs to the 143 people displaced by the closure.
Labatt revealed the offer in a news release yesterday afternoon, ahead of a rally today by labour unions to call for a national boycott of Labatt products and plans by a Calgary-based brewer to table an offer for the plant.
Labatt's offer to the city was tabled in a meeting with Mayor Fred Eisenberger and Hamilton economic development officials the day after the beer giant announced it would close the Lakeport brewery and move production to London, Ont. It offers lease and municipal tax payments of $89,000 a month to any "qualified" tenant that takes over the Burlington Street factory for the balance of Labatt's lease to the end of May 2012.
"We're doing this to enable the city to attract a suitable tenant," said Labatt spokesperson Jeff Ryan. "We want the public to know the efforts we have been making for Hamilton and hope that it will help attract some interest."
The company has also pledged $500,000 over three years for charitable and community support programs.
Labatt, which has about 45 per cent of the local beer market, has faced a steady stream of criticism for its insistence on stripping the Hamilton plant of all equipment, making it unlikely another brewer would consider locating here.
The company has said it will use all salvageable equipment in its other brewing operations. Labatt started moving out equipment Monday after suddenly shutting down Friday rather than the end of April as it had first announced.
There have been expressions of interest in the Hamilton brewery. Neil Everson, director of economic development, said an offer from Rochester-based North American Breweries was tabled last week and rejected by Labatt. NAB had planned to use the Hamilton plant to brew Labatt products for export to the United States.
NAB, owned by New York City-based KPS Capital Partners, was formed last year to hold KPS's interests in Labatt USA and Genesee Brewing Company. KPS acquired Labatt USA after the American Justice Department ordered the sale as part of the takeover of Labatt by Anheuser-Busch InBev.
NAB imports Labatt products to the U.S. brewed under contract by Labatt. That three-year contract is soon to expire.
NAB officials would not comment on the situation.
Two other companies have also expressed interest -- Minhas Creek Brewing Company of Calgary is to table an offer today after touring the Hamilton plant last week.
"I was surprised by the sudden closing, but we're going ahead with our offer anyway," said company president Ravinder Minhas. "We'll go ahead and try to open their eyes to how this makes sense for them.
"It's getting to be kind of a long shot, but we'll go ahead anyway."
Everson said he is still talking to a third brewer looking at the facility.
"Our first priority is the 143 people affected by this closure," he said. "Our first preference is to keep a brewery in there."
Against this background, workers and others will gather in Eastwood Park, across the street from the brewery at 2 p.m. today to voice their anger at Labatt and support for the NAB offer or other deal that will save their jobs.
"The NAB offer wasn't a publicity stunt, it was a serious offer that would have kept the plant up and kept people working," said Kim Norgate, a veteran Lakeport worker and one of the organizers of the rally. "The whole way Labatt has treated people here has been terrible; it has been a real strain."
By calling for a boycott of Labatt products, she said they "hope we can bring people together and show Labatt that this will affect them on the bottom line."