From Mill Street to Simcoe Street: Labatt shifts Toronto brewery's production to London

The label may say Mill Street Brewery, but soon the beer inside will be London-made.

Labatt is moving the majority of the Mill Street Brewery's production out of Toronto, a two-hour drive to the company's main London brewery at Simcoe and Richmond streets, the Labatt Breweries of Canada confirmed Thursday.

It's a major change for the brand, which has brewed in Toronto since its founding in 2002. It comes as a 10-year lease on Mill Street's North York facility expires with no plans to renew. 

Substantial increases to industrial lease rates are to blame, said Labatt spokesperson Hannah Love in a statement. Labatt purchased Mill Street in 2015.

The move impacts 39 workers, who will be considered for open positions elsewhere in the company, Love said, adding no London jobs are impacted. Increased production in London is set to begin in April. 

"The majority will be produced in London, however, we will continue to brew in our brew pub in Toronto as well as other facilities in our brewing network in the GTA," she said.

Asked if any Mill Street offerings would be impacted, she said it would continue to produce at the same volume, including small batch beers.

Nearly 40 jobs impacted

"We're sad about the news for the families and the folks that have lost their jobs," said David Bridger, president of SEIU Local 2, which represents unionized workers at the Labatt plant and other Canadian breweries. He said rumours of the move have swirled for weeks.

"We know what our folks can do in the London brewery, they produce a quality product, so we expect the quality will remain the same. But it's bittersweet news," he said.

The London brewery is Labatt's largest and oldest. Founded in 1847 by John Kinder Labatt, it makes roughly 40 per cent of the beer the company sells in Canada. That includes more than 50 brands owned by its Belgium-based parent, AB InBev, including Budweiser, Busch, Lowenbrau, Michelob Ultra, and Rolling Rock. 

The drinks giant has invested millions into the facility in recent years, including more than $26 million in 2023 to grow its capacity. The plant is already acquainted with Mill Street Organic, brewing some since 2016 in support of the Toronto plant, said Bridger.

"They'll be able to take it on. It will mean increased work in the London plant, I don't know what that translates into as far as whether that means jobs ... but it's not an insubstantial amount of liquid."

Steve Abrams, one of Mill Street's co-founders, said it was a "sad day" hearing about the news. Abrams left Mill Street in 2021 and later launched Harmon's, a non-alcoholic craft brewery.

"I got kind of reflective thinking of 20-plus years ago," he said. "We built that place by hand."

Mill Street began as a brew pub in Toronto's Distillery Historic District. It soon outgrew the space and moved to a larger facility in Scarborough in 2006, before moving again to North York in 2015.

"I get it from a business perspective, but all those people that got laid off, it breaks my heart," Abrams said. "I'm sure they're doing everything they can to ... keep them."

He added that with talented brewers, great beer can be replicated and made anywhere. "I'm sure we're still in good hands. I say we, I mean the legacy, not me."

It's a tough time in Canada's craft beer industry, which has seen breweries close or acquired amid a tough economy and changing consumer preferences, said Jason Foster, an Alberta-based beer expert.

People are drinking less or favouring ready-to-drink options, as inflationary pressures are also pushing consumers toward cheaper beer, and hitting brewer balance books.

The number of Canadian breweries exploded during a 2010s craft beer boom, jumping from 210 in 2010 to nearly 1,200 in 2020, Beer Canada says.

As drinkers turned to craft beer, larger breweries spent millions acquiring smaller ones, a trend Foster says is now in reverse. Both AB InBev and Molson Coors have sold off a dozen craft beer brands in recent years.

Some major players have entered the ready-to-drink space, Labatt among them. It makes the American Vintage, Mike's, and Palm Bay brands in London.