Labatt Breweries buys craft brewer Mill Street; hopes to the brand’s reach

TORONTO — Mill Street Brewery, one of Canada’s leading makers of craft beers, is being swallowed by Labatt Breweries — the formerly independent industry giant that now belongs to the world’s largest brewing group.

The acquisition of the privately held Toronto-based company will help Labatt market the craft label in new areas, including Quebec — the only province that currently doesn’t have any distribution of the Mill Street brand.

“We think that this partnership will really help expand awareness of craft across the country,” said Charlie Angelakos, Labatt’s vice-president of corporate affairs, in an interview Friday.

“The folks of Mill Street have built a great business and we want to continue to help them foster that growth.”

Labatt didn’t announce how much it’s paying for Mill Street but said it will invest $10 million into the company’s existing brewery operations, as Mill Street tries to keep pace with its growing popularity.

Over the past few years, Mill Street has seen average sales growth of more than 15 per cent annually, according to data provided by the company.

“Many craft brewers in Ontario are experiencing this huge surge just to keep up with demand,” said Mill Street co-founder Steve Abrams.

“This immediate infusion of capital will assist us in getting tanks and more equipment.”

Mill Street was started in 2002 with modest aspirations by its three founders, but its success pushed them to move its facilities to a larger space four years later that could handle the rising supply demands.

Since then, the company has amassed an array of accolades, including Canadian brewery of the year at Canadian Brewing Awards for three consecutive years starting in 2007.

Mill Street has attacted a loyal following of beer drinkers, and some of them took to social media on Friday morning to express their concerns over the craft brewer being gobbled up by a large conglomerate.

Labatt — once an independent giant in Canada’s beer industry — was bought in 1995 by a Belgian group that has continued to grow by buying and merging with other companies around the world. The group, now called Anheuser-Busch InBev, is currently attempting to buy the world’s second-biggest beermaker SABMiller.

“Goodbye to craft. Hello average,” posted @Simmsation on Twitter shortly after the announcement was made.

“Oh no! What a shame, I liked Tankhouse. I need to find a new beer,” added user @nfitz1.

Others decided to take a more creative approach, considering ways that Labatt could mesh its Labatt Blue line with the Mill Street brand.

“Might I suggest ‘Mill Street Blues’ as their first hybrid ale?” suggested @jeremysale.

The popularity of craft breweries has been on the rise across Canada in recent years.

According to recent findings from data research company NPD Group, the consumption of beer declined by six per cent in 2014, but craft beer servings were up seven per cent.

Overall, the study found craft and microbrew beers accounted for 17 per cent of all beer consumed at casual dining restaurants.

Labatt has already been playing in the craft brew market with a relatively low profile. The company owns Shock Top, which is sold in the microbrew department at liquor stores.

“Craft beer in Ontario has gotten to the point where everyone is noticing,” said Abrams. “This will hopefully bring it up to a whole other level.”

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David Friend, The Canadian Press