Canadian brewers battle over bottling rights

Trouble is brewing between Ontario's dominant beer retailer and a small-city brewer over the use of 1970s-style "stubby" bottles, following the launch of a nostalgia marketing campaign for its Red Cap beer.

Brick Brewing launched its Red Cap beer earlier this year in the short-neck, retro-style stubbies, the most common bottle style in Canada a generation or more ago.

But the retro-marketing plan ran up against Brewers Retail, the near-monopoly beer retailer in Ontario, which said that as of as of 1 November, it will stop returning Brick's reusable long-neck bottles until the brewer agrees to stop using the non-standard stubbies.

Brick is now seeking an injunction against Brewers Retail, demanding it continue to return the reusable long-necks, which it still needs for its other products.

Brewers Retail officials say Brick, along with several other breweries, entered into an agreement in the early 1990s that prevents them from being supplied with standard bottles if they also market beers in non-standard containers.

Short-neck stubbies hold a special place in the Canadian consciousness, bringing back memories of a time when the domestic dollar matched the worth of the US greenback and the country's world dominance in hockey, its beloved game, went unchallenged.

Brewers Retail - jointly owned by Molson, Sleeman Breweries and Labatt Brewing, a division of Belgium-based Interbrew - lords over the Ontario market and also returns customer empties to brewers for reuse.

But Brick, based in Waterloo, Ontario, said it has never signed an agreement that would prohibit it from using both long-neck bottles and stubbies.

"I just don't understand why they'd want to open this up,"​ said Jim Brickman, chief executive of Brick. "The only thing that we can think of that triggered this had to be the success of the stubby and the Red Cap launch that we did."​

Brick said Red Cap has captured nearly 1 per cent of the Ontario bottled beer market since its April introduction, a major success in a largely flat market dominated by big players Molson and Labatt.

Brickman calls the decision an attempt to disrupt Brick's business. The short, squat bottles filled beer shelves until the early-1980s, when they were replaced by US-style long-neck bottles, which are now the industry standard.

"What we're learning now is (the stubby) crosses a whole range of generations, to our surprise,"​ added Brickman.

With two-thirds of Brick's beer still marketed in standard bottles, Brick says it will have to look for bottles from alternative sources.