All I can say is “Holy Poor Public Image, Batman!” to this bit of news. Today the blog Canadian Beer News reports (apparently getting it from the Toronto Star) that Labatt brands destined for the U.S. market will from now on be brewed at Molson plants in Toronto and Montreal (here is a link to the CBN post).

I could go the cheap route and crack a line like – well, it only means switching the labels on the bottling line, anyway – or some other reference to how the two companies make beer that tastes the same. But there is something substantive in this decision that needs remarking.

The storyline is summarized well by CBN – it is fallout from the AB-Inbev merger a couple years ago and is an attempt to remain onside with U.S. Anti-Trust legislation. And the ludicrousness of making your product in your main competitor’s factory is bizarre enough to be a Seinfeld episode.

But this is why it interests me: I think it is a potent symbol for AB-Inbev’s long term corporate strategy with Labatt products. The Labatt brand is being slowly choked to death. The company is spending the bulk of its resources on its sales monster, Budweiser, and on its “premium” brands, like Stella Artois, Alexander Keith’s and Kokanee – at the expense of Blue and other Labatt mainstays. Think about it. When was the last time you saw a Labatt Blue TV ad?

I think the name Labatt is being phased out, ever so slowly. And by allowing it to be brewed at Molson breweries, they are sending a signal that they don’t really care about that line anymore. They would NEVER let Stella be brewed at a Molson plant! I fear that in a few years time, the name Labatt will fade away, which, despite what you may think of their beer today, will be the death of a hugely important chunk of Canadian beer history. Labatt’s came into existence in 1846 and has become a Canadian icon. The name matters.

I realize the decision to brew at Molson was not AB-Inbev’s – as they had sold Labatt USA. But even that decision is noteworthy for its lack of commitment to the brand. Plus who gives up ownership over the flagship brands, even in foreign markets? There were other ways to address the U.S. government’s concerns.

I may be wrong, but fear I am spot on the money. This decision only deepens my suspicions.