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The Hamilton Spectator
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Friday February 2, 2007
The discount beer market could be in for a major shakeup after Lakeport Brewing Income Fund (TSX:TFR.UN) attracted a $201.4-million takeover bid from market leader Labatt Brewing Co.

Industry watchers said Thursday's deal could boost Labatt's competitive stance as it uses the smaller Hamilton-based brewer to build a commanding presence in the discount beer market, where Lakeport is a leading player.

David Hartley, a beverage analyst at Blackmont Capital, said the move has the potential to slowly change the way beer is sold in Canada.

"The idea is to bring the pricing for the industry up as a whole, and this deal might do that over time," he said. "There's an opportunity here for Labatt to trade drinkers up to higher-priced brands."

"I think there's an attempt to kill off the discount category, but it won't be easy," Hartley added.

That may not go down well with beer buyers but it could be good news for the major brewers, who have struggled to turn a profit in recent years, while Lakeport posted record profits selling low-price suds in Ontario.

CEO Teresa Cascioli, who owns a 21 percent share in the company, stands to gain an excess of $40 million CAD from the sale of shares. Continued...

Labatt to buy Lakeport Brewing