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The Globe and Mail

Beer deal expected to cost few Labatt jobs

Belgium's InBev SA insists its blockbuster $49-billion (U.S.) acquisition of Anheuser-Busch Cos. Inc. will have little negative impact on Labatt Breweries of Canada, which it took over 13 years ago, even though Toronto is destined to lose its role as the Belgian brewer's North American headquarters.

"Labatt will not be impacted by the transaction," Marianne Amssoms, InBev's chief spokeswoman, said Monday. "It will continue to grow the Anheuser-Busch brands in Canada."

"The establishment of St. Louis as InBev North American headquarters is not anticipated to have a significant effect on employment levels in Canada," Ms. Amssoms said in an e-mail response to questions from The Globe and Mail.

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Anheuser-Bush is based in St. Louis and InBev said Monday the Missouri city will become its North American headquarters, assuming the takeover is consummated.

Labatt, which has brewed Anheuser-Busch's signature Budweiser brands in Canada under licence since 1980, has seven breweries and about 3,000 employees across Canada.

This figure includes about 160 people at its national office, which has served as InBev's de facto North American headquarters since the acquisition in 1995.

"We expect Canada to continue to play a vital role in the InBev business," Ms. Amssoms said in the e-mail, hitting more of the same sorts of notes companies like to sound when attempting to reassure employees.

She added that InBev expects the "next chapter" of its history with Labatt in Canada to be "equally promising, if not more" than what has gone before.

David Kincaid, a former Labatt marketing executive who left the company in 2000, said the relationship between Labatt and Anheuser-Busch over the years has generally been "strong and positive" and that the takeover by InBev could indeed bring benefits.

"Now that it's all under one roof, the opportunity to build off that and to integrate the brands and the brewing operations and the marketing decisions under one owner, if anything, could spell some opportunity," said Mr. Kincaid, who now runs Level5 Strategic Brand Advisors, a Toronto-based consulting firm.

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Having greater access to Anheuser-Busch's distribution system could, apart from anything else, offer "upside potential" for the Canadian company's one-time star brand, Labatt Blue, which has been allowed to slip into near obscurity, eclipsed by Budweiser, he added.

In St. Louis, however, the proposed takeover was greeted with anger and sad resignation, Reuters reported. The 150-year-old Anheuser, brewer of Budweiser and 30 other brands, has served as a symbol for St. Louis almost as recognizable as the soaring Gateway Arch.

"Budweiser and St. Louis will remain linked by the thousand bonds that history, bricks, preferences and generations of brewery families can forge," Mayor Francis Slay said.

Mr. Slay, like several members of Congress representing the area, had objected to the deal when it was proposed a month ago, but said they planned to do whatever they could to preserve the company's 6,000 local jobs and millions of dollars in charitable donations.

"I'm disappointed," said U.S. Senator Claire McCaskill, a Democrat from Missouri.

"Beer is basically cheap and heavy. That's why Anheuser's breweries are spread around the country. To sell it in the Midwest, you basically have to make it here," said Glenn MacDonald, an economics professor at Washington University in St. Louis.

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"I don't think there will be a significant loss of production jobs. One thing they've said is they'll leave management of the U.S. business in St. Louis - we'll see whether they're going to do that."

Talk in some taverns turned to grim acceptance of the global economic forces driving the deal, while others opted to express their disgust by switching away from Anheuser brands.

With files from Reuters

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