Lager Heads: Labatta nd Molson Face Off for Canada's Beer Money

Robert W. Sexty is a professor of commerce and business administration
at Memorial University of Newfoundland and the author of Canadian
Business: Issues and Stakeholders.

Paul Brent is a business columnist with the National Post. Lager Heads
focuses on the attempts of Labatt and Molson to sell a mostly
undifferentiated product to Canadians. Over the years, both companies
have engaged in high-stakes advertising and marketing campaigns in a bid
to gain market share.

What the book reveals about the industry is enlightening, if not
reassuring to Canadians. The industry has consolidated but brands have
proliferated, with American beers dominating due to licensing
agreements. There has been a rationalization of plants despite
restrictive provincial government regulation that prevents efficient
production. Even the federal government protected the industry by
excluding it from the 1989 Free Trade Agreement. Corporate policies of
unrelated diversification in the 1970s and 1980s were disastrous for
investors. Provincial government price controls enabled companies to
overcharge consumers while all the while collecting high taxes. Lager
Heads haphazardly chronicles the foibles and follies in the history of
this multi-million dollar industry.

Most significantly and sadly, the book provides another example of
management incompetence combined with misguided public policy resulting
in another Canadian industry becoming prey to foreigners instead of
being predators themselves in the global market. With the recent
Molson/Coors merger, foreign ownership of the Canadian brewing industry
is complete except for a few independent breweries with a small market
share. The next book about the industry would appropriately be titled
Game Over: The Loss of the Canadian Brewing Industry.