Canada’s long running brewing drama came to an end this past weekend when it was revealed that Japan’s Sapporo was the winner in the bidding war for Canada’s number three brewer, Sleeman Breweries. (That’s assuming there was a bidding war, which we may never know for certain given the secrecy that surrounded the process. But insofar as Sapporo’s $17.50 a share bid represents a significant premium over Sleeman’s stock price, I guess that’s a fairly safe assumption.) Presuming that Sleeman’s stockholders accept Sapporo’s offer, the question becomes “Now what?”
Well, here’s what. To start with, this nation’s largest domestically held brewery becomes Moosehead, which has to help the New Brunswick- and Ontario-based brewer as it seeks to expand its cross-country presence. (If you raised your eyebrows at the notion of Moosehead being Ontario-based, remember that they bought Niagara Falls Brewing a while back. They also own a chunk of Montreal’s McAuslan Brewing.) Next, without the Guelph-based elephant in the room, the Ontario Craft Brewers Association, and other provincial brewers groups, can rev up their “buy local” campaign to the max, confident in the fact that they are promoting only the wares of their members and one or two other small, non-member breweries.
Plus, Molson and Labatt have some fairly stiff new competition in town.
As for Sleeman itself, it’s utter speculation as to what the Japanese might do with it, but since I’ve never shied away from that, here it goes. In whatever they do, I expect Sapporo to move slowly and methodically, as that’s been the company’s way in the past. They don’t know this market, so for the short term, at least, I anticipate them leaving things pretty much as they stand and letting the existing company structure continue running the show.
In the longer term, look for an increase in the Canadian presence of Sapporo brand, already brewed here for the domestic and U.S. markets by Sleeman. Watch also for a potential trimming of the Sleeman line, as Japanese breweries tend to proffer slimmer brand portfolios than do Canadian breweries. Regional lines like Okanagan and Shaftesbury in B.C. and Maritime in Nova Scotia could also be reduced or even sold off, if buyers can be found.
What I view as the jewel in the Sleeman crown, Quebec’s Unibroue, may also be divested, as it represents a facet of the market – luxury brands crafted in the Belgian style – with which the Japanese have no experience. Conversely, I could also envision Sapporo embracing the profitable Unibroue line and expanding it both domestically and internationally, even making it an ultra-high end flagship in Japan. Either scenario I think signals a positive future for what is arguably Canada’s best-known craft brewery.
