PR, Profit, and Porter: Champlain and National Breweries

Yesterday, I posted discussion on annual reports of National Breweries Ltd. in Quebec Province of the late 1940s. I mentioned that National Breweries,  public-traded and representing the major breweries in Quebec outside Molson Brewery, purchased the Champlain Brewery in Quebec City, in 1948.

The 1948 annual report stated of the purchase as follows:

 

 

The 1940s annual reports are contained in McGill University’s business digital archive. Most are in English but the 1948 report is in French. (The reports were issued in both languages but examples in the archive appear just in one or the other).

The last paragraph states that due to the purchase Champlain will gain greater marketing opportunities – given, in other words, National’s sizeable advertising budget and staff. Further, “a much larger distribution network … will enable the four corners of Quebec province to purchase Champlain ale and porter”.

Champlain made India Pale Ale and porter. National Breweries already made similar beer via its Dawes, Dow, and Boswell units, and porter too, via Dawes and Dow again.

Was National sincere to maintain the product lines of Champlain? It apparently did so until 1952 when Toronto-based E.P. Taylor’s Canadian Breweries Ltd., took over National Breweries.

Did National fail to realize efficiencies that Taylor was more pitiless to exact from his new purchases? It is hard to say. Either way, the bland, reassuring 1948 annual report echoes today’s press releases that accompany big brewery buy-outs of craft breweries.

Business does not, in the essentials, change over time. In 1948 National Breweries wanted to convince its shareholders and Champlain’s customers that a local hero was better off in National’s fold – even though National Breweries had an existing brewery, Boswell, in the city.

 

 

My sense is National would have made the same decisions ultimately as E.P. Taylor: cut excess production capacity and trim staff, unless a turn-around in profitability and industry prospects came soon.

Clearly, National was in trouble by the early 1950s. Why is hard to say without an in-depth study of Quebec brewing at that time. Even a cursory glance at the annual reports shows, though, the large spike in taxes the industry had to cope with since 1940, imposed to help pay for WW II. It must have kept management up at night.

Ontario-based Edward P. Taylor appeared at the right time, offering a convenient and less risky alternative to an in-house reorganization.

It came at a price, as such deals always do. The still-surviving (1952), separate Dawes Black Horse, Boswell, and Champlain ales disappeared before long, the first two with roots in the early 19th century. Dow Ale was selected as the Quebec champion. The other brands withered although Champlain Porter continued to be produced.

Champlain’s building in Quebec City still exists in modified form, as offices. Canadian Breweries Ltd. after many peregrinations was absorbed into Molson Breweries in 1989.

Molson to this day is run by canny descendants of Lincolnshire-born John Molson. Molson stayed out of the 1909 merger that created National Breweries Ltd.  A bruited 1944 marriage of Molson and National Breweries, see Allen Sneath’s book I cited yesterday, came to nought. In retrospect, perhaps a good move by Molson, although perhaps it would have fended off E.P. Taylor Quebec.

Finally, therefore, Molson got it all. In time it made its own compromises, the deal with Colorado’s Coors Brewery about 10 years ago. Still, Molson survives as a substantial Canadian and Canadian-managed business.