Saturday, April 02, 2005

Labatt - InBev: I can and will still smell the hops

Back in December, I wrote a post about the closing of Boddingtons Strangeways Brewery in Manchester, England “Boddingtons: the 100% Mancunian 90% Welsh beer…”
Boddingtons was purchased by the world’s largest brewing concern Belgium’s, Interbrew S.A. (Stella Artois being its flagship beer). Citing efficiency as the cause, Interbrew UK moved 90% of the brewery to its new canning facility in Wales. Boddingtons, known as the Cream of Manchester, is now a Welsh brewery.
My bitter disappointment with this is that I feel that “world globalization” is quickly removing anything unique and replacing it with a generic product devoid of any history or responsibility to the communities; it sells and makes it products in. “It is globalization gone mad: you know it is a sad day when your hometown beer becomes an import, even though you are still living in your hometown.”

The London Brewery, c. 1870 - Looking north across the Hunt mill race, the original Labatt house is on the right.

What I didn’t mention in that post, is that Interbrew, in its effort to have complete dominance of the world brewing, also bought our local, though national, brewery called Labatt. Labatt Brewery started in London, Canada in 1847 when John Labatt purchased London Simcoe St. Brewery in 1847. Labatt grew in scope from its beginnings in London to be both a major national brewery as well as selling its products worldwide.
As a teenager in London, Labatt was just an everyday part of the landscape here. You’d go downtown and you would smell the hops brewing in the air, as the smell lofted over the core of the city. When you became old enough to drink (18 at that time), it went without saying the first beer you probably bought was a Labatt Blue Larger or 50 Ale.Labatt was a cornerstone of this city in its founding and remains one of London’s most notable Corporations throughout the better part of the last 100 years. Then in 1990 Labatt did what no one expected, it moved its historic head offices from London to Toronto.

Labatt's product logo.

Then in 1995, Labatt was bought for 2.3 billion dollars by Interbrew.
In 2002, citing the same efficiency concerns, there was talk that Labatt would close its traditional and historic hometown brewing operations in London and consolidate itself in Toronto. This would close the books of history on Labatt in London.
When Boddingtons was closed in its hometown of Manchester, I secretly thought to myself, that the writing is on the wall for our local brewery Labatt and it would be a matter of time before it was closed also.

Well the news broke yesterday that Labatt would indeed close a brewery but to my pleasant surprise, the brewery operations to be closed would be Toronto. In 1999, Labatt made a $50 million investment in expanding the operations here. It seems that this earlier investment made the decision to close Toronto easier. The economics favoured London, where the plant was larger, had newer technology and lower operating costs. As in most business decisions, the bottom line is always the deciding factor and in this case, London was seen as more economical and less expensive to add capacity.

I hate globalization because it indeed breaches the notion of “the division of labour and product”. Workers now make products for anywhere in the world and don’t seem to have a sense of ownership of the products they make. Company’s use the bottom line to easily relocate their operations for cheaper labour markets at no ethical cost to themselves. Sadly, I also believe that products suffer in the case of unique products such as beer. I mean that when I drink a Guinness Stout, I think on the Liffy River and Dublin. When I drink a Labatt Blue, I think on the waters of Lake Huron. These paradigms have all shifted with the advent of globalization and the repercussions have been felt by the breweries themselves. More and more tiny microbreweries are popping up everywhere in North America and the large brewers are complaining of loss of market share. For a time I wouldn’t touch a Labatt beer only because I had felt betrayed by their move and their loyalty to the community I still habitat. Although petty, I was also a little angered by them, as they had jerked me around on the purchase of one of my major works for their collection some years before – that work is now in the collection of Museum London.

I took this image of London's Labatt Brewery from my psychologist's office window.

Then suddenly I am handed this reprieve by Interbrew, now known as InBev after it merged with AmBev of Brazil in 2004; Labatt is now under the control of the Brazilian company. InBev’s decision to keep Labatt in London has caused me to be happy, as it seems that this corporate giant has made a good assessment. I’m not naïve, I realize that costs and economics are involved but for once, a decision seems to also reflect some kind of cohesive connection to a products history. I regret that the Toronto workers are out of a job but I’m happy that Labatt will remain truly a London based brewery of which as a local citizen I’m proud. I hope that this is a reflection that global corporate giants can feel some compunction towards the communities they touch. Maybe it is the beginning of a change that will affect more of the world’s global marketplace, as peoples stop drinking or buying what essentially began in their home and buying off shore product imports or locally made microbreweries beer. As I’m a bit of a cynic, it probably isn’t, as economics more than likely determined even this decision but one can only hope. I can’t stand driving through Flint, Michigan with all its closed auto factories because I see all those poor unemployed people milling about and think of the cheap labourers in Mexico. The truth remains when everyone is finally passed over for yet a cheaper place to manufacturer a product, who will be left to purchase said product? Will it be an endless circle of keeping people poor and union busting until after a generation, places like Flint, suddenly offer cheaper labour and Auto giants return there only to start the circle again?
I believe that Inbev's global strategies may work in many beer markets, but not where beer drinkers care about heritage and authenticity. As a Dutchman the thought that Holland’s Heineken beer for example, could be brewed in a super plant in Wisconsin and no longer in Amsterdam is an anathema to my mind – as Stella Artois is Belgium beer so is Heineken Dutch. I’m certain that the peoples of Manchester believe that Inbev is on a “World Tour of Destruction” by moving Boddingtons to Wales. Oh well, topics for another day.

As for now, I’m going to buy a case of Labatt and raise a glass to InBev on this toast able outcome for my home town of London. I look forward to going downtown and smelling the hops brewing at our local brewery, for many years to come.
I digress, you know my favourite place to drink beer is Belgium because of their fine beers and the bonus is you get delicious French cuisine but with a larger Belgium portion. Kudos’ to Interbrew - InBev (I can’t believe I’m saying this). Maybe it’s like war: you celebrate the battles won or lost but never lose sight of the entire war to be fought - one small victory then. Prost, cheers, nastrovia, and sláinte…

'Sláinte chuig na fir, agus go mairfidh na mná go deo.'(Which is Gaelic for) Health to the men, and may the women live forever!

Why such a long-winded rant about beer? Need you ask? I care about my hometown of London and the impacts of globalization being felt even here. It may not be New York but it is my home and where we’ve chosen to raise our family. Many of my best friends live here, all of them beer guzzling drunks (just kidding).


Anonymous Anonymous said...

do you know who bought the toronto plant? try to figure out who the current owner is. let me know...

6:20 p.m.  

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