Buffalo’s beer drinking habits force InBev to sell off Labatt USA.
In Buffalo and throughout Western New York, Canadian beer is king; not the King of Beers. Canadian brews Labatt Blue and Blue Light are the largest selling beers in the market. Check out these amazing stats:
About half of the sales of Labatt brand beer in the United States are to customers in the Buffalo, Rochester and Syracuse metro areas, the Justice Department said. [source]
The London, Ont.-based [Labatt Brewing Company Ltd] company said it brews all the Labatt beer sold in the U.S., which accounts for “just under” 15 percent of Labatt’s total production in Canada. [source]
Labatt Blue and Blue Light have less than 1 percent of the broader U.S. market, but upstate New York accounts for 60 percent of those sales, said Eric Shepard, executive editor of trade publication Beer Marketer’s Insights, based in Nanuet, N.Y. [source]
So why is this a problem that would concern the US Justice Department?
Answer: Labatt, like Anheuser-Busch, are both owned by InBev. This ownership of both companies would give InBev a monopoly over the Western New York beer market and could lead to price increases. We already have the highest priced gasoline in the country, and we don’t need the highest beer prices as well.
The solution the Department of Justice came up with is that Labatt USA (the American arm of Labatt LTD) must be sold to a third party. While the as yet unknown third party buyer figures out what to do with the brand, Labatt Canada can still supply the US market with beer for 3 years. Basically, this means that someone is going to get to buy the rights to the Labatt name in the US, but will have to get production of the brand going domestically within three years or no more Labatt South of the Canadian border.
I am going to look at this in the most positive light possible because Buffalo with out Labatt is just too alien for me to get my head around. Growing up, I don’t think I ever remember seeing a case of Budweiser, Miller or Coors in my parents’ house, and if a guest brought some domestic beer over, the leftovers collected dust in the garage next to the Molson and Labatt empties. Belly up to any bar from Buffalo to Syracuse and say Blue and you will get a bottle of Labatt Blue. I hope someone buys the brand and opens a brewery to make Labatt here in Buffalo, so I could still ask for Blue at the bar, but get a Blue made on this side of the Great Lakes.
[techtegs:LABATT, LABATT USA, INBEV, LABATT BLUE, BLUE LIGHT, INBEV SELLS LABATT]