Brick Brewing not for sale: CEO

Brick Brewing Co. Ltd. is not for sale, and will opt instead to work its way out of a tough financial corner, says company president and chief executive officer George Croft.

Even though last year the Waterloo, Ont., brewer went looking for a corporate white knight, Brick is not interested in that strategy, Croft said Thursday.

"I'm certainly not looking for a buyer."

Instead, Brick will spend the next months trying to turn around falling beer volumes and flagging revenue by squeezing out extra costs and building sales with new brands, he said.

This week, Brick settled a six-year-old lawsuit against Brewers Retail Inc., the partnership that runs Ontario's extensive beer distribution business, over Brick's reintroduction of the stubby beer bottle in the province in 2002.

The agreement prompted some speculation that Brick was improving its balance sheet in anticipation of finding a buyer.

Last year Brick hired CIBC World Markets to conduct a review of the business with an eye to enhancing shareholder value, often an euphemism for looking for a buyer.

In October, however, the company decided to reinvest in its production facilities and sales network as a better way to boost profits.

That strategy, cutting "non-strategic costs" and improving sales of Brick's beer and other drink brands, is what the company plans to pursue for the foreseeable future, Croft said.

"Industry volumes in Ontario are flat. But when you peel that onion back one layer, you get a different story," he said.

The market for cheaper beer is growing, as are sales for premium suds, especially Belgium brews, Croft said.

Brick wants into that market, this week unveiling a deal with Latis Specialty Beer Import Co. to sell some Belgium labels, starting with draft sales at selected bars and eventually working into the LBCO and Beer Store networks, he said.

The company also announced the renewal of an existing agreement to make and sell Mott's Clamato juice.

Three-month stock chart for Brick Brewing

The deals were necessary because Brick had been suffering through sagging volume sales and uninspired earnings in recent months.

Interestingly, the company was not eyeing better treatment from The Beer Store when it settled the lawsuit with Brewers Retail, mainly because the fight did not hurt Brick's sales at those outlets, Croft said.

"I don't believe that situation had any effect on our business at The Beer Store," he said.

Last year, previous CEO Doug Brechtold said the lawsuit had harmed Brick's sales through The Beer Store.

From Croft's perspective, the legal machinations were a business distraction, but not a corporate threat.

"We were spending money on lawyers. I'd rather have been spending that money on improving our brands," he said.

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