Buyers lining up for Lakeport brewery
Calgary siblings among several interested in operation
But Labatt says no sale, it's gone
April 13, 2010
Meredith Macleod
The Hamilton Spectator
http://www.thespec.com/News/Local/article/752582
A Calgary brother and sister who want to make beer in Hamilton don't expect an easy fight with Labatt over the Lakeport plant.
Ravinder and Manjit Minhas, owners of Minhas Creek Brewing Company, want to take over the Burlington Street plant and make beer for the Ontario market.
They've taken their interest public, but city officials say there are other players making quiet inquiries about the facility, too.
Ravinder Minhas is in Hamilton today to meet with city and Hamilton Port Authority officials and the plant's union to talk about a potential deal. He says he expects to be able to employ all 143 Lakeport workers.
Any deal will require Labatt's co-operation. That doesn't seem to be forthcoming.
Labatt, which announced March 30 it will shutter the plant at the end of this month and move production to its London, Ont., brewery, will not leave behind any equipment, it reaffirmed yesterday.
"We've been crystal clear from Day 1: We're removing all the equipment from Hamilton and moving it elsewhere in our national network. It is not for sale," said Jeff Ryan, director of corporate affairs at Labatt.
Labatt also won't budge on its remaining two-year lease on the plant, says Ryan.
Minhas says it would make sense for Labatt to move some machinery. But if Labatt removes the tanks and piping, it would make it extremely difficult for another brewer to come in.
"If they're going to take equipment to reuse, that's not our concern but if they're going to destroy equipment, that's something else."
Neil Everson, Hamilton's director of economic development, said there are three serious parties interested in Lakeport.
A deal will hinge on the equipment and the lease, he said. His department is trying to arrange a meeting with Labatt officials.
"Our interest is in those 143 displaced workers," said Everson.
The city will also lose water and tax revenue when Lakeport ceases production.
Minhas Creek's Boxer Lager brand is a significant player in the buck-a-beer segment in Alberta, Saskatchewan and Manitoba. It was launched in Ontario last fall, where it sells at the lowest possible price, $15.80 for 12 cans.
The company is based in Calgary and owns a brewery in Monroe, Wis.
Paul Kuruliak, an 18-year veteran at Lakeport, said the interest shown by Minhas Creek offers workers some hope.
"People are going to be ecstatic. But will Labatt do the right thing? I don't think they will."
Kuruliak said he doesn't believe Labatt will use the Lakeport equipment elsewhere. He said some of it dates back to the days of Amstel ownership, and Labatt has already pumped millions into its flagship London brewery. The brewhouse operator also says Lakeport workers continually met production targets, only to have them set higher.
"Labatt is in an embarrassing position," said Councillor Bob Bratina. "They're going to be seen to be destroying livelihoods for their own bottom line."
He thinks the federal government should force Labatt to either lease or sell the equipment at fair market value.
But he admits that's likely a "faint hope."
"This isn't something we've done. We don't challenge companies like they do in the United States."
Hamilton Centre NDP MP David Christopherson says he doesn't think Ottawa could order Labatt to sell its equipment. But he has asked Industry Minister Tony Clement to intervene.
"It's one thing for a company spokesperson to spew the company line, but it's a whole other thing for a company president to get a call from a federal cabinet minister ... The world can change based on one phone call."
Minhas says he understands that Labatt wouldn't want to see a new competitor take up in the plant, but he says he's an existing player and won't disappear if Labatt plays hardball in Hamilton.
"I'm not sure how friendly Labatt will ever be to me," said Minhas. "We're not dreamers, we're realists."
He said his company has always had its eye on Lakeport and admired its sales and marketing approach.
When Labatt announced its plans for the plant, Minhas said he and his sister, both in their late 20s, didn't hesitate to make a move.
He doesn't believe the Hamilton brewery has any efficiency issues. Labatt has said the plant is inefficient compared to its other operations.
"Labatt wasn't saying it was inefficient when they bought it. When you start to blame the plant, it's a cheap shot to employees."
Minhas Creek also produces Mountain Crest, Lazy Mutt Farmhouse Ale, Rani Indian Lager, Jack's American Lager, Axehead Extreme Extra Strong Lager, and coolers Peelers Mojito and Peelers Orange Squeeze.