Canada's Top Breweries Continue to Struggle

Aug 13, 2003 - Molson Inc. has fired the top marketer on its flagship Canadian brand, the

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latest sign both of the countries megabrewers continue to struggle to turn

around their most profitable brands.

Montreal-based Molson, which along with Labatt Breweries of Canada account

for 90% of beer sales, has let go Sean Moffitt, vice-president of marketing

for Molson Canadian, after six months on the job. Mr. Moffitt, a beer

marketing veteran, joins a string of short-lived managers of the brand.

"At six months in that job you get a gold watch," said an executive with a

rival brewer. "They go through them so quickly I haven't even met him."

Canadian, Molson's largest and most profitable brand with about 11% market

share nationally, has lost a full share point over the past year. Each share

point is worth about $23-million in profit.

A Molson spokesman said yesterday the vice-president "was let go as part of

a reorganization of the marketing department." No other changes were made

and the brewer has not decided whether to replace him.

Molson president and chief executive Dan O'Neill, who has won praise for his

efforts to turn around the brewer's profits, if not its market share, over

the past four years, spoke angrily about the company's share weakness on a

conference call last week. In the key markets of Ontario and the West it

fell an unprecedented 1.5 share points during the April to June period.

While Molson's marketing department has seen a flurry of faces come and go

during Mr. O'Neill's leadership, Labatt has made the most changes in its

executive suite. Last month, Belgian parent Interbrew SA announced European

executive Stewart Gilliland would be taking over as president of its

Canadian business and its current president Bruce Elliot would be leaving

the company.

"It is certainly disruptive to the organization -- he will be the fifth

president in six or seven years," noted beer analyst Michael Palmer.

Labatt has the luxury of operating more or less as a private company in

Canada. Although it is part of publicly owned Interbrew, it does not have to

divulge market share or profit figures for its operations here, which can

allow management to take a longer-term approach to the market, observers

say. The Canadian company also has the luxury of being able to tap

Interbrew's international portfolio to sell imported brands such as Beck's,

Stella Artois and Hoegaarden here.

The rising share of imported brands in Canada, which have doubled in recent

years to about 10% of the market, are responsible for much of the decline of

brands such as Blue and Canadian. Molson acts as the distributor and

marketer for the fast-growing Heineken and Corona brands and this spring

launched Marca Bavaria from Brazil, sold, like Mexican-brewed Corona, in a

clear bottle. (Source: National Post)