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The Corporation, the Retiree and Beer for Life

abinbevlogoToday I want to wade into an issue that, in general, is not the territory of this website – even though it is a beer industry-related story. I am not entirely sure why I feel the need to write about it. Maybe it is because it is a rare confluence of my day job and my hobby-job. Or maybe it is just because it is a slow beer news week. Or maybe because it speaks to the difference between corporate beer and craft beer – in more ways than one.

I am referring to a story that came out a couple of days ago that ABInbev (Labatt’s for those of you who continue to believe it is a Canadian-owned corporation) has decided to discontinue its policy of providing an annual beer allotment to its Canadian retirees. You can read the CBC story about it here.

Before I offer some commentary, some background is in order. First, a policy of providing a certain volume of free beer to employees is a longstanding and widespread industry practice. The unionized corporate breweries have it written into their collective agreements. But craft breweries (if they have employees) almost universally do it as well. The corporate breweries also have a long history of extending that benefit to long-serving workers who retire, more than 50 years in ABInbev’s case (I don’t know if there are craft breweries who offer a similar retirement benefit – someone feel free to fill me in).

To some the benefit may seem like an outlandish perk, especially the notion of “beer for life”. But let’s pause a moment and look at the policy carefully.

First, free beer for employees might seem like a perk (and it kind of is), but it is also smart business. Working at a brewery means being around beer all day. Brewing, transferring, packaging. There is beer everywhere. Imagine what would happen if the employer didn’t offer an allotment of free beer? Pilfering would be rampant. There would be no shortage of opportunities to make a six pack “disappear” over the course of a work day. And who could blame the workers? They made the stuff, for goodness sake! Asking them to pay for it would seem like an insult.

So breweries, wisely, developed policies to ensure workers get a fair portion of beer as part of their overall compensation. Workers are happy, less beer goes missing and the cost of the beer is fairly small. In fact it is likely less than the amount workers would pilfer. It is kind of a win-win.

What about retirees? I don’t know the original reasons for initiating an allotment for retirees, but given when it was implemented I think it was likely a recognition by the employer for long service. Someone toils for you for 20-30 years and the employer (at least back then) feels some obligation to honour that loyalty. It is not unlike offering a pension plan or post-retirement health benefits. At one time it was widely acknowledged that employers’ responsibility for their workers did not stop on the day they got their retirement wristwatch. It was considered an extension of the obligations arising out of the employment relationship.

So, for 50+ years retired Labatt’s workers received an annual allotment of beer on the company. A fairly modest allotment, actually: a 12-pack per week. 1.7 beer per day. At retail prices (which is likely triple or more ABInbev’s real costs) that benefit, if fully used, is about $1500 per year per worker. Sure, not nothing but for a corporation the size of ABInbev, it is something of a drop in the bucket.

labatt 009It is a discretionary policy, and so ABInbev has the legal right to rescind it. But was it fair?

I argue no. Here is why.

The beer benefit is part of an implicit contract with its workers. When you retire, Labatt said, we will make sure you still get a fair supply of the beer that you spent years making. Now, unilaterally and without consultation, the company is now phasing it out. I can see why the retirees are upset. They legitimately expected this benefit to continue and the employer ended it – for no explicable reason as far as I can tell other than bean-counting.

The easy response is to say that beer for life is unreasonable in these times and that it is just another example of entitled union workers demanding more than they deserve. Maybe. But if we stop and think about it, ABInbev was a willing participant in the policy for more than a half century. So it seems they were okay with it.

Has all that much changed in the beer world that the planet’s largest beer corporation has the need to cut off its retirees now? How does this move make them more competitive? Shareholders will not even notice the difference. Sure, it is just beer, but it also, to me, seems petty and unnecessary.

It is easy these days to say that work has become a cutthroat, every-person-for-themselves world, that no one should expect a long term commitment from their employer. That is, indeed, how the economy is going. But is that something to be celebrated?

And why should a group of retired brewers who loyally toiled for Labatt’s for years be forced to face the brunt of the 21st century’s cruel realities?

 

 

2 comments to The Corporation, the Retiree and Beer for Life

  • You confused me when you referred to craft brewers retiring. Seems like an oxymoron. I thought we were in this for life (as in, by dying breath may happen during a transfer).

    Who knew retirement would be an option???

  • Thanks big guy for another article that has people thinking. Many moons ago My wife worked at the Bat,s in Edmonton and I don’t ever recall any free bee,s from them. When we moved to Calgary because she was hired by Molson,s we got 2 cases a week and 8 cases during Stampede just for promotions. Those day,s are gone now and I miss her. Thanks

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