Northern Breweries guy has a tear in his beer

A lot of people say they support Northern Breweries, says the company's President and Chief Executive Officer Bill Sharpe.

But that doesn't mean they put his brew in their fridges, he told City Council last night.

Sharpe was at the Civic Centre to give councillors an update on how things are going at his Sault operation, which received a $430,000 handout from the City in November, 2004.

And the news wasn't good.

"We're bleeding badly," Sharpe said. "We've bled a lot of money in the last couple of months."

The beer mogul told councillors and Acting Mayor Steve Butland that Northern Breweries has lost over $2 million since it was taken over by the investment group Sharpe heads in 2004.

He blamed poor support from Northern Ontario beer drinkers and a lack of investors, making the company's future look bleak.

Sharpe said he's worked for the past 21 months for no money, has invested over $750,000 of his own money and is awaiting still transfer of ownership of company stock to him.

Over that time, he said, between 30 and 35 companies have been interested in investing in Northern Breweries, but they walked away when the learned of its debt load, he told Council.

"It's not a company that's dead and out of the water," he told reporters.

"All it takes is one or two of these contracts inside the building and all of a sudden it's kicking out profit," said Sharpe. "Big companies that I've had in doing the business plans with me all say this company has got legs and life underneath it, a good solid name and tradition behind it and it can work if someone can put the money in and bleed for a couple more years."

He said that so far no one is willing to help the cash-strapped history-rich business climb out of its $7 million hole.

So the company may not stay afloat much longer, he said.

"Unless we have these investors that we are talking with right now to come in with us and put financing in real quick as a temporary measure to keep us going, we aren't going to make it for very much longer at all."

He said that Northern Breweries has all but month-balled its brewery in Sudbury and is concentrating its production efforts in the Sault but those are suffering badly as well.

"There are no more contributions to the employee pension plan and there are no more benefits at this point in time," he said. "Those currently on a pension or soon to be retiring will not be affected though."

Sharpe said that they are shopping for another benefit company and the 37 people currently employed with Northern Breweries have agreed to work without benefits temporarily.

He said that the company has not been able to fill all its orders on time because suppliers are now demanding cash up front that the brewery doesn't have.

"When we first took over the company the most prudent thing for us to do have done at that time would have been for us to put the company into CCCA [bankruptcy protection] because there was millions of dollars owed," Sharpe said.

He said the investment group thought the company would be okay because it was promised substantial financial contributions from other investors that it planned to use to kick the company into high gear and sell some serious amounts of beer.

"When the wheels fell off of it in August we were in real trouble," said Sharpe, regarding the pull-out of those promised investments.

Sharpe is head of an investment group that purchased the struggling Northern Ontario brewery in 2004 and he came to Council through the Economic Development Corp. for a hand-out so the company could re-launch its product to great fanfare, which it did in June 2005.

Some conditions were attached to the City funds.

At the last City Council meeting on May 29, Ward 1 Councillor Steve Butland said he hasn't been able to get any updates from the brewery and has no idea if it's been meeting the conditions set out.

Council agreed to ask Sharpe to attend and fill them in on what happened to the $430,000 they forked over in 2004.

Northern Breweries has been brewing beer in the Sault under different names since 1906.