FOLLOW-UP

Carling’s troubled brew

JARED MITCHELL November 17 1986
FOLLOW-UP

Carling’s troubled brew

JARED MITCHELL November 17 1986

Carling’s troubled brew

FOLLOW-UP

The Equinox is typical of most university campus pubs across Canada. Relaxed conversation often turns into animated debate among the University of Ottawa students who visit the 250-seat student-run lounge. But recently the Equinox itself became the centre of heated controversy when the university’s student federation reaffirmed a spring decision to ban from the pub products made by Carling O’Keefe of Canada Breweries Ltd.—including the popular Carlsberg, Miller and Foster’s beer. The boycott, in effect as the thirsty fall academic season was about to begin, followed publication of a student-council-commissioned study into Canadian companies with connections to South Africa. According to student federation president Daniel St. Louis, the report, based in part on government statistics, said that Carling was substantially controlled by South African interests.

The nationality of Carling’s ownership has become a complex issue. Carling officials maintain that the firm has been wrongly branded as South Africa-controlled, and they have labelled the student council report “misinformation.” According to public corporate statements, Carling is 50.1per-cent owned by Rothmans Inc. (Canada), which is in turn 71.2-percent owned by Britain’s Rothmans International PLC. But the British firm’s stock is 43-per-cent held by the Rembrandt Group, a South African company. For its part, Carling says that any Rembrandt control of the Canadian company is indirect. But St. Louis says that Statistics Canada, for one, classifies Carling as a South Africa-controlled company.

The student body’s decision against Carling is not an isolated one. In recent years other student councils throughout Canada have taken similar measures—including a boycott this fall at the Filling Station pub at Toronto’s Ryerson Polytechnical Institute. The controversy has come at a critical time for the Toronto-based beer giant. According to industry analysts, since 1983 Carling’s market share has declined by five per cent to 23 per cent of all beer sold—a drop attributed in part to the company’s failure to adapt to new products from competitors. And only last month Roderick Mclnnes, chairman and chief executive officer of Carling for a decade, resigned amid speculation of an impending shakeup within the company.

Carling officials have succeeded in convincing some student governments not to take action against the company. After votes this fall, students at both Ottawa’s Carleton University and the University of Toronto law school

reversed earlier decisions not to buy from Carling. Company officials claim that the effect of the student boycotts have been negligible—student pub sales represent less than one per cent of beer sales in Canadian restaurants

and bars. But they are clearly concerned—and exasperated. Said John Hay, director of government relations and corporate development: “What

else can we do?”

Last month Carling officials met with University of Ottawa student leaders to argue for a reversal of the boycott. They also said that they would try to persuade the federal government to re-evaluate the brewery’s corporate ownership and reclassify it for Statistics Canada. Until that happens, St. Louis says that his council will maintain the boycott. But he added: “It is not a witch-hunt against Carling O’Keefe. If there is any information that would warrant I changing our position, I then we would do so.”

-JARED MITCHELL in Toronto