Molson to shutdown iconic Vancouver brewery and sell land

The growing field of competition in the brewing industry has likely contributed to Molson Coors’ decision to shutdown its iconic Vancouver plant on the south end of the Burrard Street Bridge.

A company spokesperson has confirmed that it has sold the property and is in the process of exploring a new possible site in B.C. for the brewery’s brewing and distribution capacity.

“Molson Coors decided to evaluate the current market for the potential sale of the site and relocation the brewery,” Jennifer Kerr, a spokesperson for Molson Coors, told Vancity Buzz. “Molson Coors confirms that we have identified a preferred purchaser for the Vancouver Brewery on Burrard Street and we have entered into an agreement to sell the property.”

“As a result, we are actively exploring alternative sites to build a new state-of-the-art modern brewery in British Columbia and continue to consider our options.”

The transaction will be finalized in the first quarter of 2016 and Molson Coors will continue to operate at the facility through a lease back arrangement until the new facility is constructed.

The Vancouver brewery was built in 1953 and sits on 7.6 acres of land framed by Burrard Street and the bridge to the west, Squamish First Nation reserve land on the north, the Arbutus rail corridor to the east, and the Seaforth Armoury to the south.

The site is currently zoned for industrial purposes. The new owner of the site is not known, and at this time there are no development plans for the site. But a transaction upwards of $100 million is likely and it is highly unlikely the land owner would be able to recoup such costs through continued industrial zoning.

As well, an 8.7 acre parcel of land located immediately adjacent to the brewery, held by the Squamish First Nation, is slated to become a high-density commercial and residential development.

Molson Coors has not indicated whether its new brewery will be located in the Lower Mainland. Following the 2004 closure of New Westminster’s Labatt Breweries for redevelopment into the Brewery District, Molson became the Metro region’s largest brewery.

For much of Molson Vancouver’s brewery history, malt and barley ingredients were shipped into the plant by freight train along the Arbutus Corridor, which terminates next to the brewery.

Molson was Canadian Pacific’s only client along the route for years up until 2001 when the trains stopped running on the Arubutus Corridor. Since then, the company has been relying on trucking for its plant imports and exports ever since the railway ceased all train operations.

In 2009, the Vancouver brewery completed a major $32-million equipment upgrade that included the installation of seven new fermentation tanks, a new bottling production line and a new bottle washer. Altogether, the upgrades in 2008/2009 boosted the Vancouver brewery’s annual production capacity to 2.2-million hectolitres or nearly 1.3-billion cans and turned 22 part-time jobs into full-time positions.

The company laid off 15 employees last year and shutdown its beer bottling production line this past spring. Since the changes, the facility employs just over 150 people and only produces beer in kegs and cans.

The Burrard Street location is Molson Coors’ only brewery west of Toronto and fulfills the supply demand for the Western Canadian market, up to Manitoba, and much of the United States.

Over the last several years, demand for larger brewers has fallen with more consumers desiring the products of small craft breweries. According to the Liquor Distribution Branch, small brewery sales rose by 43.4 per cent during the first six months of 2014 and about 30 small breweries opened between 2013 and 2014.