That next bottle of Canadian just might have a bitter aftertaste.
Molson Coors Beverage Company has locked out 300 employees at its Toronto brewery just a day after they heavily rejected what the company called its “best and final” contract offer, following 17 weeks of heated negotiations over a two-tier wage structure, pension changes and a new scheduling system.
Members of the Canadian Union of Brewery and General Workers Local 325 rejected the offer 208-69 in a vote held Thursday and Friday on the three-year offer. Workers have been without a contract since the expiration of their previous collective agreement Dec. 31.
“Given that our contract with Local 325 has expired and given the union’s unwillingness to agree to terms which will permit us to sustain and grow our Toronto operations, we have implemented a contingency plan to ensure the Toronto brewery will remain open and we will continue to brew, package and ship beer to meet consumer demand,” Molson spokesperson Frederic Bourgeois-Leblanc said in an emailed statement.
Bourgeois-Leblanc wouldn’t clarify whether the “contingency plan” included non-union replacement workers, or managers.
Local 325 president Gaurav Sharma, in an interview from a picket line outside the west-end brewery, said he was disappointed and surprised by the company’s decision to lock out its packaging, warehouse and brewery workers.
“We were surprised. We were making progress on the issues,” said Sharma, adding that he’s optimistic Molson won’t bring in replacement workers, as the company had been planning to do during a 2017 strike.
“I’m hopeful it won’t get to that stage,” said Sharma, who added that the brewery typically has six to eight weeks worth of inventory on hand. The company could also shift production to breweries elsewhere in the country to make up any slack, he said.
A provincially appointed conciliator couldn’t bridge the gap between the two sides. After an impasse was reached, a “no-board” report was filed Feb. 4, starting a 17-day countdown until either side was in a legal position for a lockout or strike. The countdown ended at 12:01 a.m. Saturday.
The company presented its final offer on Feb. 10. Employees voted on it Thursday and Friday.
The three-year offer included raises in each of the three years for two different tiers of employees, and a $1,000 ratification bonus.
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The company’s offer also included transferring all but the most senior employees from a defined-benefit pension plan to a newer defined-contribution plan.
Sharma said the union had asked the company to gradually eliminate the two-tier wage system, which had been in place at the plant since 2010. It caps new hires at 84 per cent of the previous wage scale. Employees hired before that point can hit the top of the scale.
“We were trying to bring everyone into the same wage scale. It’s not fair to have that kind of difference,” Sharma said.
Sharma also said the company rejected union counter-proposals about the pension plan changes. A company proposal to bring in a “continental” schedule could have meant 12-hour weekend shifts with no overtime pay, Sharma said.
In an email to union members before the vote, the company said the offer, if accepted, would ensure “our brewery is competitive in the network.”
The Toronto brewery, on Carlingview Dr. near Pearson airport, is one of Molson’s biggest in the country, and produces dozens of brands. Several industry sources said the plant produces three million hectolitres of beer per year. That’s 300 million litres, or roughly equivalent to 880 million bottles of beer.
Roughly 20 per cent of the brewery’s production is dedicated to archrival Labatt Blue and Blue Light destined for the U.S. market. AB-InBev was forced to divest Labatt brands from its U.S. portfolio in 2008 because of anti-trust concerns following the takeover of Anheuser-Busch by Belgium’s InBev.
Ten years ago, Molson boosted the size of the brewery with a $24-million renovation, adding six massive tanks that rolled down the highway to Toronto from the port of Hamilton.
The company announced last year that it would be eliminating almost 200 jobs in Quebec by the end of 2021 after a new brewery south of Montreal is completed.
Earlier this month, Molson Coors reported it had lost a whopping $1.37 billion (U.S.) in the fourth quarter. The brewing giant blamed continued COVID-related restrictions on arenas and other entertainment venues for the loss. In the same quarter a year earlier, the company turn a $163.7-million (U.S.) profit.
Josh Rubin is a Toronto-based business reporter. Follow him on Twitter: @starbeer
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