Pain in the long neck

Molson refutes accusation it breached bottle agreement by importing

Terry Roberts editor@cbncompass.ca
Published on February 10, 2009
Jamie Stoyles of Hearn Distributing shows the difference between the long neck beer bottle (left) brought into the province by Molson recently and the bottle normally used by Newfoundland and Labrador bottlers. - Photo by Keith Gosse/The Telegram

A senior official with Molson Canada is denying a claim that the beer maker breached a long-standing bottle agreement with its main competitor, Labatt, by importing products brewed in Montreal and Moncton.

A boiler failure at the company's St. John's brewery on Jan. 26 resulted in a weeklong suds shutdown, and forced the company to import "emergency supply" from two breweries on the mainland, said Ferg Devins, vice-president of government and public affairs with Molson Canada.

A senior official with Molson Canada is denying a claim that the beer maker breached a long-standing bottle agreement with its main competitor, Labatt, by importing products brewed in Montreal and Moncton.

A boiler failure at the company's St. John's brewery on Jan. 26 resulted in a weeklong suds shutdown, and forced the company to import "emergency supply" from two breweries on the mainland, said Ferg Devins, vice-president of government and public affairs with Molson Canada.

"It was a short-term measure to ensure beer drinkers would have a supply of their favourite Molson product," Devins said Monday from Calgary.

The company imported its three top brands - Molson Canadian, Canadian Light and Coors Light.

But that supply came in the form of so-called "long neck" bottles, and not the short necks that Molson and Labatt are required to use in this province as part of a closed market bottle agreement.

Newfoundland and Labrador is the only province in Canada where the two beer makers use the short necks. Under the agreement, they will continue to do so until both companies agree to make the switch.

Devins said the imported products were "strictly for St. John's and surrounding area," and should soon be all sold.

And to ensure the shutdown does not have a negative impact on production at the St. John's brewery, an equivalent amount of beer will be exported from Newfoundland to the Atlantic Canadian market, Devins said.

"We're fully compliant with the intent and the spirit of the bottle agreement," said Devins, adding that the company received permission from the Newfoundland and Labrador Liquor Corp. (NLC), the Crown agency that manages the importation, sale and distribution of alcohol in the province.

He also advised his counterpart at Labatt.

The St. John's company that distributes Labatt products, Hearn Distributing Ltd., has complained to the NLC, saying the decision to allow the import of beer was done without consultation, causes problems for the collection of returnables, gives an unfair market advantage to Molson, and undermines the local beer manufacturing industry.

In a Feb. 6 letter to Steve Winter, president and CEO of the liquor corporation, Jaime Stoyles said the decision to allow the import of beer was "unethical, unprofessional and intolerable."

"We should boycott these tall neck bottles from Montreal and buy brands made right here," Stoyles, operations manager with Hearn Distributing, stated in the letter.

She accused Molson of importing amounts "well above their needed inventory" in order to capitalize on the novelty of long necks in this province.

"Molson is the only party that stands to gain from this agreement breach," she said.

Devins, however, said there was no conniving involved. He stressed it was a "short-term fix" and said Molson is taking full responsibility for the collection of the glass bottles. He also noted that roughly four per cent of the beer sold in this province is imported, and is sold in long neck bottles.

Asked how much beer was imported, Devins would only say it was enough to supply the market for two weeks.

When reached Monday, Winter said a lawyer for the corporation was reviewing the issue and he wouldn't be commenting.

An employee at Fitz's Cold Beer in St. John's said they have seen about 10 dozen long neck empties returned in recent days. He said they haven't caused any problems.

"It's no different than when the 15-pack came out. We put them aside separately. They still stack up the same way in the cooler," said the employee.

troberts@thetelegram.com