Labatt cuts retiree perk: free beer

Brewer calls ‘time’ on frothy handout-for-life

For decades, a job at Labatt, one of Canada’s two major breweries, came with a perk: free beer for life. But now, the company’s retirees have been cut off.

In a memo to employees, the brewer, owned by the giant Anheuser-Busch InBev, said it would gradually turn off the retirees’ beer tap over the next two years.

“It’s been around, I think, since the breweries have been around,” David Bridger, president of the Service Employees International Union local that represents workers at Labatt’s brewery in London, Ont., said this week.

He predicted the loss would further undermine morale.

“It’s certainly not the way it was in the past, when there was fanatical devotion to the brand and the company,” said Bridger, who is also chair of the Canadian Brewery Council, an alliance of brewery-related unions. “Today it’s just a job.”

The controlling shareholders of Anheuser-Busch InBev, a multinational company based in Belgium, are 3G Capital, a Brazilian private equity firm, and some of its executives.

Starting with a Brazilian brewery, 3G took over breweries big and small, including AnheuserBusch in the United States, to become the world’s biggest beermaker, owner of brands including Budweiser, Corona, Beck’s, Stella Artois and Michelob Ultra.

As with all of its holdings, 3G began extensive cost cutting at Labatt, which it acquired in 1995, including lower wages and reduced benefits. The end of beer for life, announced in October, appears to be its most recent measure.

Charlie Angelakos, a spokesperson for Labatt, said in an email that the company made the “reluctant decision” to cut off its retirees after looking at the retirement benefits offered by other Canadian breweries and consumer packaged-goods companies.

“None of the companies we surveyed offered free product to retirees,” he said.

Routine free beer for retirees was ended at Molson Coors, Canada’s other large brewery, several years ago. But Gavin Thompson, a spokesperson for the company, said it still provided beer to pensioners “who are hosting a special event, like a family reunion.”

How much free beer Labatt retirees can lug home each year depends on where they live. At the plant in London, which slakes all of Ontario’s thirst for Labatt’s Blue and Budweiser, Bridger said retirees were getting about eight 24bottle cases — what Canadians call a “two-four” — a year.

Current employees, get a free case every other week and bonus cases at Christmas, apparently in lieu of a turkey, and for Canada Day. Their free beer will continue as long as they are employees.

Retirees in Edmonton, Alta., get a free case every week. In most of the country, Bridger said, the retirees are given gift cards that allow them to pick up their free beer at retail stores.

Why free beer became an entrenched perk of brewery work is unclear. Labatt said its labour agreements did not require it to keep retirees’ refrigerators filled. Bridger said the Labatt brewery in London once included an inhouse pub where employees drank for free — after their shifts.

Tamar Nersesian, a Labatt spokesperson, said the program for retirees now being wound down was introduced in the 1970s.

In its letter announcing the cutoff, Labatt cited the “rising overall cost” of retiree benefits, including health care. “That’s a bit rich,” said Larry Innanen, a retiree from Oakville, who was involved in a class-action lawsuit after Labatt cut health benefits.

Innanen, who was an executive vice-president and general counsel at Labatt, said the settlement of that lawsuit reduced the company’s costs while lowering health benefits to former employees.

Innanen said the end of free beer for life was not a surprise. But he is still disappointed.

“It’s a loss to a class of former employees,” said Innanen. “It means something, it’s material to them.”