Labatt Widens European Drive by Moving Into Italian Market

TORONTO —  Canada’s Labatt Brewing Co. Ltd., fresh from breaking into the British beer market, Thursday elbowed its way into traditionally wine-drinking Italy with the purchase of a 70% stake in Birra Moretti SpA.

“Italy is a growth market. Most of the other European markets are not growing,” said Sid Oland, president of Labatt Brewing. “We will be the third-largest brewer in Italy with 10% of the market.”

Oland would not say how much his company, Canada’s largest brewer, had paid for the controlling stake in Moretti, but industry analysts put the cost as high as $80 million U.S.

Oland said the remaining 30% of Moretti, based in Udine, will be held by the Moretti family and the company will continue to be managed by Luigi Menazzi Moretti, its president.

As part of the agreement, Moretti, which makes a premium beer, has itself taken over Bologna-based Prinz Brau, Italy’s sixth-largest brewer, which, in Oland’s words, makes a “bargain basement brand.”

Fraction of Labatt Sales

Oland estimated the combined sales of Moretti and Prinz Brau at around $80 million, a small fraction of Labatt’s 1988 sales of $1.3 billion.

Analyst Neil Wickham at Canarim Investment Corp. Ltd., guessing at the price Labatt paid for Moretti, said, “It’s probably not more than a dollar in costs for a dollar in sales.”