Drink up... there's a beer war in Manitoba

Enlarge Image

Ruth Bonneville / Winnipeg Free Press Chris Hiebert, from the Pemby Bottle Shoppe, holds discounted brews.

FREE beer! Well, sort of.

Labatt Breweries of Canada and Molson Coors Brewing Co., the country's two dominant breweries, are locked in the biggest price war to hit Manitoba since Minhas Creek Brewing first burst upon the scene more than six years ago.

The first salvo was fired by Labatt several months ago, when it launched a new 20-pack of cans of Budweiser, Bud Light and Kokanee for $29.95. That was equivalent to $35.95 for a two-four of cans, $5 cheaper than the usual price for 24 cans. Molson finally responded early last week by offering 18-packs of Coors Light for $25.95, the same price as its 15-pack and $5 cheaper than 18-packs of Kokanee. Labatt retorted immediately with 8-packs of cans of Budweiser for $11.95.

(If three of the 8-packs are purchased, a two-four is just $35.85.)

"This is the first time that the major brewers have discounted the major brands to this level," said Trevor Druxman, owner of the Pembina Hotel, which operates the Pemby Bottle Shoppe. "This is one of the deepest discounts we've seen in a long time. This could be a whole new ball game." Until recently, the discounting of beer in the province had been largely led by Minhas Creek, which launched its cheap lager in Manitoba in the fall of 2004. Labatt and Molson responded by matching the price with less popular brands, some might have called them dormant, such as Labatt Lucky, Molson Dry and Black Label.

Bill Gould, president of WETT Sales & Distribution, which distributes Moosehead, Moosehead Light, Samuel Adams, Carlsberg and Crack Canoe in Manitoba, said he was surprised to see such a big discount on Budweiser, one of the most popular beers in the world.

"If this is the start (of price competition) in January, holy smokes, I hate to think what the summer might bring," he said.

Gould said the heavy rainfall for much of last summer cut into beer sales and he guessed Labatt and Molson are looking to get a jump on this year's volume. Moosehead and his other brands, however, will not be taking part in the price war.

Neither of the major brewers would discuss the specifics of their pricing strategies. Jeff Ryan, Toronto-based director of corporate affairs for Labatt, said the company believes wit has a lot of brands in Manitoba that are competitively priced.

"When the market changes, we respond accordingly. We react by changing our prices so they're competitively priced for beer drinkers," he said.

Ferg Devins, chief public affairs officer for Molson Coors in Toronto, said it discounts specific brands in particular markets across the country based on the local environment.

"We're constantly assessing what beer drinkers are looking for in both brands and price. It's an ongoing assessment of the market and we respond accordingly. Our aim is to be competitive (on price) so we're delighting beer drinkers," he said.

Half Pints Brewing, Winnipeg's only locally owned microbrewery, won't be participating in any Boxing Day-type promotions either. In fact, its brewmaster, David Rudge, said price-conscious beer drinkers aren't really on his radar at all.

"There's a huge market for people who buy the beer that's 10 cents off that day. We're at the totally opposite end of the market," he said. "There's no point in entering a price war."

geoff.kirbyson@freepress.mb.ca

'Nice to see'

Manjit Minhas, president of Minhas Creek Brewing, which shook up the local beer market by undercutting the majors by $3 on a six-pack of cans in 2004, said she doesn't have a dog in this game of premium-priced beers, but she knows her fingerprints are all over it.

"We don't have any products in that category but we're happy to see (the price war) going on. Labatt and Molson are feeling the effects of all the discount brands, including ours and their own, which are doing well in the marketplace due to the financial situation of most people these days. It's nice to see customers are getting the nice end of the stick," she said.

Republished from the Winnipeg Free Press print edition January 18, 2011 B3