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Old Posted Mar 30, 2010, 12:52 PM
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Lakeport closing

Heard on the radio Lakeport is shutting down and moving production to London.
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Old Posted Mar 30, 2010, 12:54 PM
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Lakeport closing April 30
Production being shipped to London

March 30, 2010
John Burman
http://www.thespec.com/News/BreakingNews/article/744966

Lakeport Brewery will close its doors April 30.

Workers were summoned to a downtown Hamilton hotel this morning and given the news that their jobs are gone.

The closure affects 143 people - 99 hourly workers, another 22 hourly workers on layoff and 22 salaried staff.

In a release,  owner Labatt said the decision is “the result of the need to improve operating efficiency in a demanding market and the unexpected excess capacity in (our) brewing network”.

Charlie Angelakos, Labbatt vice-president of corporate affairs, said in a release that closing Lakeport is the “only rational business decision available to us”.

He said Hamilton is among the brewer’s highest-cost plants. London is its most efficient.

Night shift workers at the Burlington Street brewery got notices at 4 a.m. this morning telling them to go to the downtown Crowne Plaza Hotel for a meeting. Off-duty workers were receiving calls as late as 4:45 giving them the same message.

One worker who was at the  Crowne Plaza said managers “just turned red and walked away” when asked what was happening.

Staff said the closure is a “stab in the back”.

The 143 members of Teamsters Local 938 working at the Burlington Street brewery ratified a three-year contract with Labatt Breweries Canada on Feb. 24, 2008.

Teresa Cascioli - who pioneered the buck-a-beer movement and turned Lakeport into a major success - sold the brewery to Labatt in February, 2007 for $43.5 million.

Workers wondered if they aren’t a victim of their own success. Some believe Labatt plans to close the brewery to close out the buck-a-beer market.
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Old Posted Mar 30, 2010, 1:03 PM
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Unfortunately, I called this as soon as I heard Labatt's took over. They had to wait a couple years just so it didn't look so much like it is: elimination of the competition.

I hope someone reopens the facility, but Labatt doesn't want anyone running a brewery there.
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Old Posted Mar 30, 2010, 1:06 PM
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Another potential stadium site, maybe combined with Eastwood Park? One of the sites that was "to be revealed?" I'd be surprised if some of the higher-ups in the local business community didn't have an idea this was happening at Lakeport.
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Old Posted Mar 30, 2010, 1:07 PM
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Sad.
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Old Posted Mar 30, 2010, 1:20 PM
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Quote:
Originally Posted by mishap View Post
Another potential stadium site, maybe combined with Eastwood Park? One of the sites that was "to be revealed?" I'd be surprised if some of the higher-ups in the local business community didn't have an idea this was happening at Lakeport.
From my knowledge yes you will probably hear about an expanded Eastwood Park with a possible recreational centre. Perhaps Labatt might donate, who knows.
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Old Posted Mar 30, 2010, 1:34 PM
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Amazing that Lakeport managed to thrive on a buck a beer with such an "inefficient" plant while Labatt charged "premium" prices for beer made at their super-efficient London brewery. And you really have to wonder why Labatt bought the plant in the first place if they have so much "unexpected excess capacity." Unexpected...yeah....
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Old Posted Mar 30, 2010, 3:13 PM
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Quote:
Originally Posted by flar View Post
Unfortunately, I called this as soon as I heard Labatt's took over.
You're not alone.
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Old Posted Mar 30, 2010, 5:42 PM
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Part of the closure is that Labatt will strip away all of Lakeport's equipment. It'll be a large empty building soon.
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Old Posted Mar 30, 2010, 6:11 PM
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I hope the City and Provice do everything within their authority to make this as difficult a move as possible for Labatt. I'm not saying they should do anything illegal or make up phony excuses for why they can't do what they want with their property.

But they shouldn't be allowed to just shutter their competition like this without some compensation to the community. Even an addmission from Labatt confirming that this is a straight up dirtbag move on their part would be refreshing. Instead of this bullshit excuse of the buck a beer brewery being too innefficient.
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Old Posted Mar 30, 2010, 6:15 PM
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It took only a few hours for this to degenerate into another Bratina v. Merulla inbox slugfest.

Plus ça change, plus c'est la même chose.
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Old Posted Mar 30, 2010, 6:16 PM
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Sad for the workers, but Lakeport is not much better than bottled steer piss.
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Old Posted Mar 31, 2010, 8:18 AM
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Toronto Star, Feb 1, 2007
Labatt swallows Lakeport

Quote:
The future of Lakeport's plant in Hamilton, and the management team, including Cascioli, under the new owners was not immediately clear.

On a conference call with analysts this morning, Cascioli said she couldn't answer any questions relating to Lakeport's future.

"As I always say, there's uncertainty in everything," she said. "Certainly, it's very early stages. I can't offer any comment with respect to myself, personally."

As for the plant that brews Lakeport beer, Cascioli said "the new acquirer will undertake whatever it needs to do to run its business."

Spec, May 8, 2007
Labatt keeping Lakeport open

Quote:
"Lakeport has done great job of controlling its costs," [Neil Sweeney, Labatt's vice-president of corporate affairs] said. "We are looking for ways to cut costs on a daily basis."

Labatt Canada president Miguel Patricio reinforced that in a news release announcing an end to the integration effort.

"We are proud to integrate the Lakeport team into Labatt," he said. "Lakeport's brands are a great strategic fit within the overall Labatt beer portfolio. We want to continue the tradition of great beer at fair prices, and capitalize on the loyalty that Lakeport has built with beer drinkers."

Teamsters Canada, Feb 24, 2008
Labatt Breweries and Teamsters Local Union 938 of Lakeport Brewery Reach Collective Agreement

Quote:
"We are delighted to have reached an agreement with the Teamsters that is fair, progressive and consistent with recent agreements made at other Labatt facilities," said Charlie Angelakos, Vice President, Corporate Affairs, Labatt Breweries of Canada. "The Lakeport brewery and its value brands play an important role within the Labatt family portfolio. Labatt remains committed to Lakeport's tradition of delivering great beer at fair prices and ensuring our loyal Lakeport and Labatt consumers and beer drinkers in Hamilton and across Ontario have a wide range of choice across all beer segments."

Spec, Mar 30, 2010
Labatt will strip Lakeport equipment

Quote:
Jeff Ryan, Labatt’s director of corporate affairs, said the brewery will close and “the decision is final.”

Ryan said the decision is “the result of the need to improve operating efficiency in a demanding market and the unexpected excess capacity in (our) brewing network.”

Charlie Angelakos, Labatt’s vice-president of corporate affairs, said in a statement that closing Lakeport is the “only rational business decision available to us.”

He said Hamilton is among the brewer’s highest-cost plants. London, Ont., is its most efficient.
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Old Posted Mar 31, 2010, 10:56 AM
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Labatt made 'right call': Cascioli

Meredith Macleod
The Hamilton Spectator
(Mar 31, 2010)


Labatt made the right decision to shut down Hamilton's Lakeport Brewery, says the woman who rescued it from bankruptcy a little more than 10 years ago.

Teresa Cascioli says it "was a sad moment" when she heard yesterday about the closure that will throw 143 people out of work.

But she says she understands the business reasons behind it.

"They made the right call. Teresa as a Hamiltonian feels sad but Teresa the businessperson can't ignore the need to look at profitability and increased efficiencies."

Cascioli led Lakeport from 1999 to 2007 before selling her 21 per cent stake for $43 million to Labatt.

Cascioli, who now leads a philanthropic foundation, says she takes solace in the fact Labatt has promised to look after displaced workers and that the company is leaving behind $500,000 for community charities.

Cascioli is also happy to see that the Lakeport brand will live on, even if it is produced in London, Ont.

"All the time and energy and hours we spent at Lakeport to create a great brand, I'm pleased they will continue to support the brand."

She said it was all she and her partners could do to turn around the long-struggling brewery.

They built the brand into a leader in the discount beer market that eventually captured 5 per cent of beer sales.

Those efforts left no room to upgrade the plant, Cascioli says. In the meantime, giant Labatt was pumping $40 million into their London flagship brewery.

She also doesn't think Lakeport could have survived if shareholders had turned down Labatt's purchase offer in 2007.

"There was tons of competition and lots of pressure. We had momentum but I'm not sure where it would have taken us. Our competition didn't show their real muscle; they chose to buy us instead."

Cascioli, who was touted as a mayoral candidate before saying she isn't pursuing the post, says the city has to focus on attracting new businesses and nurturing the ones it has.

When told about calls from Hamiltonians to boycott Labatt popping up on Facebook and elsewhere, Cascioli said there is nothing personal in this decision.

"This is going to continue to happen and not just because of conglomerates," she said. "If we're not bringing in businesses, when something like this happens, it's huge. It's really important that the next council focuses on increasing the business base."
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Old Posted Mar 31, 2010, 10:59 AM
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Second shoe drops at Lakeport
Three years after buying brewery, Labatt closes it

Meredith Macleod
The Hamilton Spectator
(Mar 31, 2010)


When Labatt bought the Burlington Street "little brewery that could," many inside and outside the plant wondered when this day would come.

Not if, but when.

Labatt had been trying for years to shake the pesky "buck-a-beer" upstart that was gulping a bigger share of sales.

Then they swooped in and bought the company in February 2007, paying $201.4 million to shareholders.

There was instant talk about the possible loss of a Hamilton icon. Everyone from analysts to workers speculated that Labatt would close the plant.

Neither Lakeport CEO Teresa Cascioli nor Labatt officials offered comforting promises to employees.

There was talk that Cascioli, long viewed as a Hamilton hero, would be cast as a sellout if her $43-million payoff meant the loss of the plant.

It took three years for that to happen.

Yesterday morning, the company's 143 workers were summoned to a downtown hotel and given the news that their jobs are gone.

"Really, this is no big surprise," said worker Kim Norgate, of Dundas, who has worked at the brewery 18 years.

Other workers said the closure is a "stab in the back," adding they long suspected Labatt bought the brewery in 2007 to acquire its market share and shut it down.

"Teresa sold us out" echoed on the sidewalk outside the hotel.

Labatt says the decision is final and the equipment in the building will be hauled away as Labatt seeks to "improve its operating efficiency in a demanding market."

Production of Lakeport products will shift to Labatt's London, Ont., plant.

Employees -- 99 hourly workers, another 22 on layoff and 22 salaried staff -- have been told not to come back to work until Monday.

Craig McInnes, president of Teamsters Local 938, which represents the workers, said the union will now begin to negotiate with Labatt to try to improve the severance packages and work out how the company's assistance to workers for retraining or job placement will be handled.

Ward 2 Councillor Bob Bratina said he was dismayed to learn Labatt plans to remove the equipment from the building it rents from the Hamilton Port Authority.

"That means no one else can buy it, rehire maybe a hundred workers and brew beer in Hamilton," Bratina said, adding he thinks the province should step in and stop Labatt moving the equipment.

If the beer-making equipment were left, Bratina suggested, a craft brewer could start in Hamilton, maybe saving 50 jobs.

"Instead, they're intent on destroying an industry that has been functioning here for years and they need to be challenged on that," he said. "For them to remove the production equipment is draconian. It's almost evil to remove the possibility of a competitor moving in."

Bratina also backed consumer calls for a boycott of Labatt products in Hamilton -- noting the company currently has about 45 per cent of the local beer market.

"That's something we can use," he said. "We need to meet with this company and ask how much of that market they expect to hang on to if they go through with this plan."

Norm Cooper, Lakeport chair of Local 938, said the announcement hit the workers and all of Hamilton hard.

He said the older workforce has many years of service -- he has 28 years since Amstel owned the brewery -- and it will be tough for them to find jobs.

"Where will they go next? Not in Hamilton. There is nothing in Hamilton."

Jeff Ryan, Labatt's director of corporate affairs, said the workers will be paid in full for the eight-week notice period but won't be required to work the last four weeks. The company has also set aside funds to help with job searches or retraining.

As well, Labatt will actively contact area employers, asking them to consider the highly trained brewery employees for any job opportunities.

Labatt will also leave behind $500,000 for charitable and community support programs.

Charlie Angelakos, Labatt vice-president of corporate affairs, said in a statement that closing Lakeport is the "only rational business decision available to us."

He said Hamilton is among the brewer's highest-cost plants.

London is its most efficient.

But union president McInnes said he couldn't understand why the company would not seek a buyer. When Labatt bought the plant, Lakeport had between 10 and 14 per cent of the market in Canada and the plant won efficiency awards.

"If they sold it, the same people who could do that are still there, only the owners change and the jobs stay.

"That market share speaks volumes. It all comes down to money."

George Croft, Lakeport's former president and chief operating officer and a beer industry veteran, called yesterday's news "sad (and) disappointing."

"Workers at the Hamilton facility were some of the finest folks I've ever worked with. They saw it at the brink of disaster and saw it come back. They worked very hard.

"I'm not sure where those folks go now to find jobs."

Croft, now CEO of Brick Brewing Company in Waterloo, says the timing of the announcement is "bit of a shock" as the beer industry gears up for summer sales. "This has played out faster than I ever thought it would."

Despite ongoing fears, many workers appeared to be wary but lighthearted heading into yesterday's meeting. It appeared few believed Labatt would shut down Lakeport at the beginning of the beer-drinking season.

"For heaven's sake, the temperature is going to be 24 C on Friday ... summer's coming and people are going to buy beer," said one man.
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Old Posted Mar 31, 2010, 11:00 AM
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Triple-whammy behind closure

Meredith Macleod
The Hamilton Spectator
(Mar 31, 2010)


Price wars, stagnating beer sales and a decision by U.S. authorities blended into the end of beer making in Hamilton.

When InBev, Labatt's global parent company, bought American brewer Anheuser-Busch in July 2008 to form the world's biggest brewer, it touched off a Department of Justice ruling requiring Labatt to sell its U.S. subsidiary and to stop importing beer made in Canada.

The loss of American market share left Labatt with an excess of 1.4 million hectalitres in its seven Canadian breweries, said Jeff Ryan, Labatt's director of corporate affairs.

That amounts to more than 17 million cases of 24 bottles. Labatt absorbs 5.5 million of those cases, or about one-third of that excess, by closing the Hamilton plant and shifting its production to London, Ont., said Ryan.

With flatlining beer sales in Canada over the past decade, there is little chance of making that up in growth. Suds sales dipped 2.8 per cent in 2009, attributed to the sagging economy.

"We had to step back and look at it all and Hamilton stood out as the most expensive to run. We had to make this unfortunate choice," Ryan said.

The Lakeport Brewery plant will close April 30, leaving 143 workers without a job.

"London is almost twice as efficient. The bottling and canning lines are quicker and most cost- and time-efficient," he said.

Labatt has pumped about $40 million into its London flagship, its home for 164 years.

Industry watchers say they aren't surprised by the Hamilton closure because consolidation is the name of the beer game these days.

Stephen Beaumont, who has written books and blogs about the beer industry and co-owns Toronto's Beerbistro, thinks Labatt will marginalize the discount Lakeport brand as much as it can to protect its mainstream and premium labels.

The discount segment poses a much bigger threat to the mainstream brewers than does imports or craft beers, said Beaumont. By marketing to a young male demographic, the big brewers have inadvertently played to a crowd that is more focused on price and more likely to jump to a discount beer.

"I think if there is a winner in all this, it's Molson because they're benefiting from this segment going down without having to spend on the brewery," Beaumont said.

Craft and premium brewers have done a better job of protecting their brands, agreed beer analyst Bob Scott of Toronto's Ascot Marketing.

But he said Lakeport lines have grown under Labatt's stewardship and are more important now than when Labatt bought the Burlington Street brewery for $201.4 million in 2007. Brava and Lakeport Pilsener currently rank in the top 10 sales in Ontario.

"They are far too important to Labatt now to walk away from," Scott said. In fact, he said, Lakeport's success in the buck-a-beer discount market has changed mainstream beer marketing for good.

Now, both Labatt and Molson routinely discount their flagship brands, with deals such as 28 bottles for the price of 24 on Blue, Canadian, Coors Light and Budweiser. Even the brewers' premium lines, such as Alexander Keith's and Rickard's, are discounted, he said.

"When Labatt took over Lakeport, Blue wasn't discounted like that but it would die a slow death if they didn't do it," Scott said.

He said Labatt and Molson have rationalized production and the Hamilton closure is probably "the final move" that can be made in Ontario: "It's got to the stage now where there is nothing left to close. If they close much more, they might as well turn the lights out."

Marvin Ryder, a professor at the DeGroote School of Business at McMaster University, said Labatt's move to strip the plant of the beer-making and bottling equipment leaves no room for doubt that Labatt is seeking to make it impossible for another brewery to set up in the Hamilton Port Authority-owned building:

"If a soft drink company or alcoholic cider or winery came forward, they might sell the equipment ... But there will be a short window of opportunity there."
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Old Posted Mar 31, 2010, 11:02 AM
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143 Lakeport workers casualties of beer wars

Meredith Macleod
The Hamilton Spectator
(Mar 31, 2010)


It has taken three years to write the final and seemingly last chapter of the Lakeport Brewery story.

The ending is filled with tugs of war between brewing giants and competition authorities on both sides of the border.

In the United States, Labatt parent InBev was ordered last fall to sell off Labatt USA in order to secure a deal to buy American giant Anheuser-Busch.

In Canada, Labatt was involved in a tussle with the Competition Bureau for almost two years following its purchase of Lakeport in February 2007 in a $201.4-million deal.

The federal bureau, which investigates mergers and acquisitions to ensure the marketplace remains competitive, immediately began a review.

The following month, the bureau filed an application to block the Lakeport deal with the Competition Tribunal, a judicial body with the power to lay charges and make competition rulings.

The Labatt-Lakeport deal closed on March 29 and the tribunal dismissed the bureau's application to block it.

Late in 2008, Labatt complained in a court case that the review was taking too long and the bureau was asking for too much information.

The court ruled in Labatt's favour.

The bureau announced in January 2009 that it had concluded its review.

The bureau cannot reveal what it was investigating in the Labatt case, said spokesperson Alexa Keating. But the bureau consulted with industry experts, economists and industry players and determined "there is insufficient evidence to establish that the transaction is likely to substantially lessen or prevent competition."

Some in Hamilton believe that Labatt bought the plant with the intention of closing it and eliminating a pesky competitor eating into its bottom line.

But McMaster University business professor Marvin Ryder said the Competition Bureau would have likely uncovered that in its review.

Labatt officials said the decision to close the Burlington Street plant is based only on inefficiencies in the plant and a need to rationalize production.

George Croft, chief executive of Brick Brewing in Waterloo and former president and chief operating officer at Lakeport, said it looks now that the bureau had every right to be concerned about the sale.

"This has played out faster than I ever thought it would," said Croft, who worked at Lakeport between 2005 and '07.

He said his company now stands out in a sea of foreign-owned breweries, many of which use Canadian imagery to sell their suds.

"The thing about consumer goods is that consumers have the opportunity to vote every time they buy a box of beer," Croft added.

"They can make a significant impact on these companies."
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Old Posted Mar 31, 2010, 11:04 AM
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And as proof that the Spec put more than one reporter on this story...

'A difficult day' for Hamilton
Lakeport closure expected to cost city about $850,000 a year in taxes and fees

Paul Morse
The Hamilton Spectator
(Mar 31, 2010)


Hamilton's top economic development civil servant says the city had seen warning signs that Lakeport might have been in trouble.

"I'm surprised but not shocked" by the closure, Neil Everson, Hamilton's executive director of economic development, said yesterday. "We have a very aggressive corporate calling program and were there last year.

"We knew at that time that they were under capacity, down a shift, and we also know what's happening in terms of industry trends."

Big operations such as Canada Bread have consolidated production to maximize capacity. The megabakery is closing down three plants in Toronto and relocating the work to Hamilton, Everson said.

"We're just on the other end of the stick this time."

With Lakeport's closure, the city loses out on $850,000 a year. The brewery pays $200,000 in municipal property taxes a year and its annual water bill is about $650,000, Everson said.

With Labatt removing the beer production equipment from the plant, "that limits our ability to replace brewery jobs."

Hamilton Mayor Fred Eisenberger agreed. "That makes it a lot tougher for a beer-making operation, for sure," he said yesterday.

Eisenberger said his office first got word of the closure around 10:30 p.m. Monday.

He said yesterday was "a difficult day" for Hamilton and for the dozens of employees losing their jobs.

When Labatt bought Lakeport in 2007, "there was some speculation that they were buying market share and something like this could happen," he said.

"Many folks expected it to happen sooner than it did.

"Was there an expectation that this would happen? No. But certainly there was speculation that this was their main reason for buying that operation in the first place."

Hamilton Mountain MPP and Minister of Consumer Services Sophia Aggelonitis said Labatt's decision to close the plant is "truly disappointing."

"I'm very surprised, but I understand that this is a business decision that the company felt they had to make."

She said the closure is a blow to Hamilton, and the province "will help in any way we can."

Ontario NDP Leader and Hamilton MPP Andrea Horwath said: "This is another 143 families who were making decent wages with decent benefits who have now been kicked to the curb.

"Labatt's made a good profit out of the work that was done at that facility and they have a responsibility to pay back the workers and the community."

Horwath said she asked the McGuinty government to help try to persuade Labatt to leave the brewery equipment in Hamilton so another brewery can move in.
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Old Posted Mar 31, 2010, 1:12 PM
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Loyal Lakeport fan

I am very sorry to see this happen and only buy lakeport products both at home and in establishments that carry them.
I will not buy any Labatt products now and will lean towards the Brick another semi-local independent brewery.
I am only one recreational beer drinker and will even try making my own at a wine shop.
labatt owns the equipment and if it is old (I suspect it is) would it be good for a new brewer. Is there anyone sniffing around to move into our area and if so I would buy local as long as it don't taste like crap. Up north Superior and northern ale was too bad to drink or swollow your pride yech and it died.
I did see a new movement out in B.C. and it was televised on American T.V. during the olympics, local craft breweries. It was hard to get a Coors light on tap.
Check out Spinnakers and guest house or black swan who has an old hotel with a brewery inside downtown. Made Good Morning America.
Both these are right in the city one along the waterfront and is part of the scenery. neighbour hood tap houses fresh off the taps.

I know the winking judge is mostly micro on tap.
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Old Posted Mar 31, 2010, 1:15 PM
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There are rumours that the real reason Labatt is closing Lakeport so quickly and emptying out the building is because they found a food company to take over the building.
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