Brewed in the North: A History of Labatt's by Matthew J. Bellamy (review)

Approximately ninety-five percent of the beer sold in Canada in 1962 was produced by a national oligopoly of three breweries–Labatt's, Canadian Breweries Limited, and Molson. Brewed in the North provides a lively account of Labatt's rise and fall, detailing the company's changing fortunes within a national and international brewing industry. It is compelling business history. Matthew Bellamy likens it to "a classic Greek tragedy in which the protagonist is brought down not by blind accident but by fatal flaws in judgement, by hubris, and by other self-inflicted wounds" (3). Although the general history of Canadian brewing is relatively well known, Bellamy's comprehensive and scholarly treatment of Labatt's is unique in its focus on a specific brewery. But it is certainly not corporate hagiography. At points, Bellamy is highly critical of this iconic Canadian company, reserving his harshest judgements for serious strategic missteps made by a succession of Labatt's owners and top managers.

The book's three-part chronological and thematic structure works well: 1847 to 1921, when Labatt's was family-owned and controlled; 1921 to 1962, when it transitioned into a managerial enterprise and was among the "Big Three" companies dominating the Canadian beer market; and 1962 to 1995, when Labatt's largely unsuccessful attempts at product diversification contributed to its eventual takeover by the world's sixth largest brewer by sales, Belgium's family-controlled Interbrew. Bellamy describes his approach as "both a case study and a microhistory" (20). The "analytical portals" (6) he opens to assess Labatt's erratic trajectories over almost 150 years of business decision-making are the firm's changing ownership and control structures, government regulation of the brewing industry, Labatt's public relations initiatives, corporate branding, and the impacts of company consolidations and globalization.

Bellamy casts Labatt's early history as a prime example of the Buddenbrooks effect, the idea that the third generation of a family-controlled business, lacking the founder's entrepreneurial drive and talent, can send the company into decline. After lauding the firm's founder, John Kinder Labatt, for his pragmatism, initiative, and vision, he presents a decidedly mixed appraisal of John Labatt II. Bellamy blames him for trapping the company "in the cage of tradition" (106) and confining it to an Ontario market rather than expanding nationally, the consequence of arrogantly refusing to update the brewery's products and thereby keep abreast of changing consumer tastes. Bellamy is even more categorical when identifying the weak leadership of John Kinder's grandsons, Hugh and John Labatt III, even if, here he is better at pointing to their limitations, than at suggesting alternative strategies they might have implemented during their turn at the helm. With rare exception, such as during the prohibition era of the 1920s when Labatt's general manager Edmund Burke was granted carte blanche to convert the erstwhile morally upright firm into a prolific bootlegger, Bellamy characterizes the company's management as handicapped by its "conservative, risk-averse culture" (162). Bellamy tracks Labatt's often myopic management practices to the 1980s when it unnecessarily compromised the distinctiveness of its brand within an increasingly globalized marketplace by entering into licensing agreements to produce other brewer's products, such as Anheuser-Busch's popular Budweiser. Also damaging was Labatt's ultimately flawed decision to acquire a host of businesses unrelated to its core competency–a conglomerate strategy aptly dubbed the "folly of management-by-MBA" (310)–although Bellamy might have been clearer in emphasizing that Labatt's was just one among many outsized corporations of that era to fall into that hubristic trap.

In writing this thoroughly researched and effectively illustrated corporate history, Bellamy extensively mined the Labatt Brewing Company Collection housed at Western University that includes an unpublished commissioned history written for Labatt's 150^th anniversary. He interprets Labatt's story as one marked by "rise and fall...