A worker inspects bottles on the production line at Labatt London Brewery, on April 19, 2011.GEOFF ROBINS/The Globe and Mail
- Title: Brewed in the North
- Author: Matthew J. Bellamy
- Genre: Non-fiction
- Publisher: McGill-Queen’s University Press
- Pages: 464
Just a few decades ago, Labatt was a quintessentially Canadian name. The brewer made the country’s most popular beer, Blue, and controlled a bevy of other companies ranging from the Blue Jays baseball team to the Sports Network (TSN).
Today, however, Labatt is a shadow of itself. Its star brand is the (American) Budweiser rather than the (Canadian) Blue. It’s no longer Canadian owned but part of the world’s largest brewer, the Belgian-based Anheuser-Busch InBev, and no longer making big decisions about its fate and image here in Canada.
It’s a dilemma that Matthew J. Bellamy, an associate history professor at Carleton University, explores compellingly in his new book, Brewed in the North: A History of Labatt’s. He draws in the reader by describing how men of the eponymous family – followed by non-family managers – built the company into a powerhouse in Canada starting in 1847.
But they failed to expand Labatt’s brands globally, paving the way for the brewer to be swept up in an international takeover frenzy of the 1990s.
Labatt was far from alone among domestic powerhouses to be gobbled up by foreign rivals. The list includes Molson, Inco, Falconbridge, Alcan, Dofasco, Stelco, Four Seasons and Fairmont. These companies were able to climb to the top of their sector on their home turf by fighting off domestic rivals – but needed to be propped up by foreign players to make an indelible mark internationally.
In Canada, they ended up losing domestic decision-making power and high-paying jobs, ranging from marketing, legal and financial positions.
“Whether brewing beer or smelting steel, Canadian business has been inclined to live in a parochial cocoon,” Bellamy writes. “But to succeed in business, particularly in today’s global environment, firms need to draw on their core competencies and expand their horizons … Firms should do what they do best and do it the world over.”
Empties wait to be cleaned in one of three bottle washers at Labatt London Brewery where they have implemented several technologies to conserve water.GEOFF ROBINS/The Globe and Mail
Bellamy paints a picture of Labatt’s executives being too timid to successfully expand globally, lacking the confidence and the economies of scale to take on foreign giants and ultimately being swallowed up by those titans.
Brewed in the North is probably the most comprehensive look at Labatt’s past. Anyone who enjoys learning about corporate decision-making, the people behind the decisions and their successes and missteps will enjoy this book.
And you don’t need to be a big beer lover to appreciate the narrative: I’m not a beer drinker but I came away from Bellamy’s tome with insights into not only Labatt’s shifting strategies and key players, but also how the brewing industry wielded considerable clout over governments.
Among other moves, the brewer profited from flouting temperance and prohibition laws in the early 1900s. It avoided bankruptcy in 1922 by bootlegging beer to the United States. It was an operation that was orchestrated by a non-family general manager, Edmund Burke, while the Labatt family turned a blind eye to it all, tacitly approving it. That was despite a lawyer/son-in-law of a family member having urged Burke not to do anything illegal.
Subsequently, Labatt used persuasion and public relations to win over government officials and the public to the view that beer was important to the national identity – and even to people’s health.
The author struck gold by landing on a treasure trove of previously unpublished corporate documents and a detail-rich history of Labatt that it had commissioned from historian Albert Tucker.
But readers may have also benefited from the author pushing further, speaking to some of the executives, suppliers and others who had dealings with Labatt in more recent times. The book’s history ends in 1995, leaving the possibility of a final chapter to come, or even another book.
While Brewed in the North doesn’t span to present day, it does feel longer than it needs to be, with repetitious introductions and summaries that are perhaps helpful to academics but not necessarily to other readers.
Nevertheless, the book serves up enticing findings. Founder John Labatt, an Irishman who settled in Canada along with a wave of Europeans in the 1830s, did not have the traits one usually associates with a pioneering entrepreneur. He was relatively cautious, didn’t have much self-confidence and didn’t take big risks. He even went into the brewery business with a partner initially because he didn’t trust himself as a solo entrepreneur.
Freshly filled bottles await labelling at Labatt London Brewery.GEOFF ROBINS/The Globe and Mail
Still, Labatt worked hard and gained confidence over the years. And his successor, son John Labatt II, who took the helm in 1866, did not shy away from taking bold steps. But he lost his self-assurance after he led Labatt in a failed foray into the Chicago market.
The book reveals other weaknesses of family members and executives. John Labatt II showed a benevolent paternalism toward his employees, which began to weigh on the company’s performance. For instance, one of his key employees in Chicago overdrank and overspent but Labatt kept him on anyway.
Following the custom of the day, the family, which controlled Labatt until 1945 when it went public, consistently handed down the business to men rather than women, even when a third-generation daughter, Catherine, was the oldest and most capable of the siblings, the book says.
John Labatt II’s sons, John Sackville and Hugh Labatt, took over the helm in 1915 despite Catherine’s superior abilities. But they failed to show signs of entrepreneurship or risk-taking and “lacked the initial generation’s hunger to succeed,” the book states.
Bellamy includes nuggets about divisions among executives and tensions within the boardroom over takeovers and other strategies. Rifts arose, for example, between Jack Labatt (a member of the family’s fourth generation and an executive at the company) and some other board members in 1964 over U.S. brewer Schlitz’s bid to buy Labatt, which the Labatt family member supported but most board members did not. The acquisition ultimately was unsuccessful. But it became a sign of the family’s waning influence at the company.
By 1995, Labatt had faltered yet again in its attempt to go international with its investment in a Mexican brewer, which was hurt by the devaluation of the peso. It also failed in its diversification efforts, getting too distracted by non-beer businesses despite a highly successful beer business. As a result, Labatt “missed out on being part of the early phase of the globalization of the brewing industry,” Bellamy writes.
When the Labatt head office left Canada after the Belgian corporate takeover, it resulted in a loss of taxes, top talent and work for suppliers. Key business decisions were made elsewhere. For consumer-products companies such as Labatt, the repercussions can be far-reaching. These companies count heavily on marketing to trumpet their brands. When their headquarters leave Canada, companies often reach out to foreign firms to promote their products to a wider audience.
At Labatt, even the corporate moniker is disappearing. In London, Ont., the John Labatt Centre has been renamed Budweiser Gardens. Lost is a bit of Canadian culture.
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