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Labatt ads shelved after LLBO penalty.

Labatt ads shelved after LLBO penalty

In the trend toward harsher penalties, the Liquor License Board of Ontario has suspended Labatt's Ontario Breweries from advertising its Labatt's Blue and Blue Light products for three months.

Steve Grannum, general counsel, LLBO, said the penalty under the Liquor License Act was handed down after the Ontario division of Labatt Breweries of Canada failed to obtain approval for some of its ads.

Penalty also came as a result of complaints that Labatt was offering discounts and rebates to taverns and restaurants that bought the products.

By an agreement reached with the province, Labatt will donate $400,000 to agencies involved in alcohol ans substance abuse rehabilitation programs, Grannum said.

Labatt spokesman Eric Dingman said the advertising ban will have a significant short-term effect on sales.

"In our view, we're no different from Molson or any of the other manufacturers," Dingman said. "What we have is a combination of rules which are not always clear or consistently enforced and a very competitive market."

Last month the LLBO also accused Molson Ontario Breweries with offering rebates to promote its large cans at regular prices. Molson will also donate $250,000 to charity, and is currently banned for two months from promoting its Canadian and Canadian Light brands.

Analyst Irene Nattel, Levesque, Beaubien, Geofrion, Inc. said the penalty will not hurt Labatt financially but it does indicate the LLBO has its sights set on a crack down against breweries breaking the law.

"It's not a good thing being told you can't advertise your flagship brand in the province which has the highest market share," Nattel noted. "I think the LLBO, by assessing Labatt the penalty, is demonstrating they are serious about enforcing the legislation."

Another analyst, Jacques Kavafian, Midland Doherty Ltd, said one bright side of the ad ban is that the first quarter is a traditionally slow selling period for the beer industry.
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Title Annotation:Liquor License Board of Ontario
Publication:Modern Brewery Age
Date:Jan 29, 1990
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