Molson has signed a letter of intent to buy the established Ontario brands in a $2 million cash deal, which would add Algonquin beers to its super-premium portfolio that includes Holland's Heineken and Mexico's Corona, along with the marketer's own Rickard's Red and the new Rickard's Gold brands.
Molson's vice president of corporate affairs, John Paul Macdonald, cites the Algonquin beers -- an ale, a pilsner and a black and tan -- as giving the marketer more super-premium brands that are owned outright, making for more flexibility in the market.
"It's virtually the only segment that's growing," said Mr. Macdonald, who points to a consistent 1% annual growth in super-premium sales, while other parts of Canada's beer market remain largely flat.
Plans call for Ontario-based Brick to continue to brew and distribute the beers while Molson would handle marketing, something Mr. Macdonald suggests would rely on the established Algonquin equity.
"It's such a strong name in itself," he said. "We don't think it will need extensive marketing spending."
It's expected the deal will close in the next few weeks. -- Stephen Barrington
Copyright June 2001, Crain Communications Inc.