There has been a great shakeup in our domestic booze industry this month.
Alberta Distillers, which has been producing fine spirits such as Alberta Premium Rye Whisky and Banff Ice Vodka for over 60 years, has just been acquired by a Japanese liquor conglomerate.
Well, the story is a little more complicated than that. Alberta Distillers was started up by Max Bell and Frank McMahon in Calgary in 1946. Yes, that’s the same Max Bell whose name graces an arena, and the same Frank McMahon whose name graces a football stadium in Calgary. Apparently, these guys were kind of a big deal.
Anyhow, Alberta Distillers was a rousing success, largely due to the endless waves of grain that grow on the Canadian prairies, which meld perfectly with our pure glacial-fed waters to make excellent whiskies and vodkas.
As is so common in the drinks business, the successful players tend to get snapped up by bigger players, and the current state of the industry has just a handful of companies controlling the vast majority of the global drinks market.
Knowing this, you may find it unsurprising that Alberta Distillers was acquired in 1980 by Beam Inc, more commonly known as the producers behind Jim Beam Kentucky Bourbon, as well as a host of other spirits, including Maker’s Mark, Canadian Club, Sauza Tequila, Courvoisier, Laphroig, Bowmore, and many more.
So, it was actually the Illinois-based Beam Inc, the owner of Alberta Distillers, which was recently acquired by Suntory Holdings, an Osaka-based brewing and distilling giant that has controlled much of the Japanese liquor market since 1899.
This acquisition makes Suntory Holdings the third-largest producer of distilled spirits in the word, trailing only Diageo and Pernod Ricard. Although the so-called Big 3 don’t go out of their way to advertise which popular brands fall under their umbrella, odds are that most of the bottles in your liquor cabinet come from one of them.
While consolidation has been the norm in the drinks industry for decades, it is unlikely that production of Alberta Premium Whisky or Jim Beam Bourbon will be moved to Japan.
To begin with, consumers tend to be fiercely protective of what is considered their own local booze, be it beer, wine, whisky, or vodka. Additionally, many liquor brands have legally protected names that restrict their production to specific geographic areas.
For example, Bourbon is a type of whisky that must be produced in the USA, using at least 51% corn in the mash. Similarly, all whiskies labelled as Canadian Whisky must be produced in Canada from cereal grains, and aged in wooden barrels for at least 3 years.
So, what does this mean for you, the typical member of the boozing public? Probably not that much. You are unlikely to start seeing Japanese lettering on your next bottle of Alberta Premium Whisky or Alberta Pure Vodka, and the distillery is unlikely to move from its decades-old location beside the train tracks in Calgary’s historic Ramsay neighborhood.
Does this mean that Suntory Holdings just spent $16 billion for nothing? To the average consumer it might seem so, but the consolidation of all the brands in the drinks industry to just a few giant conglomerates allows the giants to achieve economies of scale in purchasing, distribution, marketing, and the like.
This has the effect of making it harder for the small players in the market to compete, essentially driving the mom-and-pop distilleries out of business, or making them more vulnerable to hostile takeovers by the big players in the industry.
For the patriotic boozer who likes to buy and drink local, this does remove one more symbol of our national identity, with the profits from our own local spirits now going overseas to a faceless conglomerate in Japan.
This is not exactly a new development, as our Canadian beers have been foreign-owned for longer than many readers have been old enough to drink.
Molson has merged with US-based Coors, Labatt is owned by Belgium-based InBev, and Sleemans is owned by Japan-based Sapporo.
Fortunately, Suntory Holdings has been a responsible steward for other brands it has acquired, and will likely continue to do so for our revered Alberta Distillers.
So, let’s all try to keep the new corporate overlords of our beloved local distillery happy, by picking up a bottle of Alberta whisky or vodka from your local booze merchant!
