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20 February 2020

Labatt buys tiny craft brewer from Calgary

Canada | The Calgary craft brewery Banded Peak Brewing has been acquired by Labatt Breweries, the Canadian unit of AB-InBev, media reported on 30 January 2020.

Branded Peak is relatively young and small in terms of output. It was founded by Alex Horner with some childhood friends in only 2016. But it quickly became a staple in Calgary’s barley belt, in the city’s southeast, producing 3,000 hl beer annually.

When big breweries buy tiny ones, it always seems a little crazy. However, in actual fact, Labatt gets a brewery with a known performance and an established marketing, no doubt thinking it can expand Banded Peak’s success through wider distribution.

Thanks to Canada’s prohibition-era alcohol laws and provincial trade barriers, which limit the opportunities for microbreweries to sell outside their locations, the country’s two major brewers, Labatt and Molson, still have a big influence on domestic distribution. Therefore, under Labatt, Banded Peak looks set to continue growing.

Will consumers care?

What is more, Banded Peak is probably not going to suffer any backlash from craft beer consumers. Market insiders say that Alberta is a more conservative and business-friendly province, so consumers there may be more supportive of the brewery and its new owner. 

Alberta’s craft brewing industry has seen significant growth over the past decade, with more than 120 craft breweries currently in operation, up from 27 in 2015. In 2019, Calgary’s craft brewer Wildrose Brewing was acquired by brewer Sleeman, which itself had been bought by Japan’s Sapporo in 2006.

Labatt is Canada’s major brewer, with a market share of 42 percent compared with 32 percent for Molson (2018), according to a SEC filing by Molson Coors.

Banded Peak isn’t the first craft brewery to be purchased by Labatt. In 2015, Labatt acquired the Toronto-based Mill Street Brewery, and Vancouver-based Stanley Park Brewing, followed by Quebec’s Microbrasserie Archibald in 2016.

In 2019, Canada’s beer sales dropped 4 percent after years of small declines.