Beer Bottle Battle - Brick forced to seek injunction against The Beer Store - Toronto, October 28, 2002 - Brick Brewery Co. Limited (TSE:BRB) today announced that it will seek an injunction against The Beer Store, Ontario's private virtual monopoly beer retailer. Brick has launched the injunction proceedings as the result of threatened action by The Beer Store.

The Beer Store has threatened that as of November 1, 2002 it will no longer release to Brick its share of empty industry standard bottles (the familiar long necks) for re-use.

The Beer Store's action comes mere months after Brick's highly successful April launch of Red Cap beer in the historic stubby bottle. The Red Cap stubby reached close to one percent of the industry's bottled volume in Ontario in four short months. Moving a brand one share point is considered a major victory in the beer business, where growth has been flat for the past several years.

Despite the fact that The Beer Store, which is owned by the three largest Ontario brewers, Labatt, Molson and Sleeman, distributes a number of prominent brands in non-standard bottles (including Corona, Heineken and the various Sleeman beers), The Beer Store alleges that Brick's use of the "stubby" bottle for its popular Red Cap beer is a breach of The Beer Store's standard brewer's user agreement.

"We are puzzled and surprised by the action threatened by The Beer Store and can only assume it is tied to the success of the stubby," says Jim Brickman, founder and CEO of Brick Brewing Co. Limited of Waterloo. "Our standard brewer's user agreement with The Beer Store in fact expressly permits innovative, non-standard bottles and only requires that a brewer using non-standard bottles pay extra handling fees. The Beer Store has charged us those extra fees since the launch of the stubby and we have paid them in full. We can only conclude that it's an unjustified attempt to disrupt our operations.

"We have been using the industry standard bottle for the past 10 years and have been using The Beer Store system without incident since our founding in 1984," says Brickman. "When we were launching Red Cap in the stubby, The Beer Store was very supportive and worked closely with us. There was never a hint of any objection from them until after it was clear that Red Cap was a phenomenal success and had attracted considerable attention."

The three major breweries collectively sell over 90% of The Beer Store volume and use both standard and non-standard bottles. There are in fact over 50 different non-standard bottles in The Beer Store system. The major breweries and many small breweries entered into an industry standard bottle agreement in 2001 that provided cash payments to small brewers if they agreed not to introduce any new products in non-standard bottles. Brick found this agreement too restrictive and refused to sign it.

Even with the popularity of Red Cap in the stubby, close to two-thirds of Brick's business still comes from beer sold in the long-necked standard bottle. Until the issue is resolved, Brick will seek to obtain new and used industry standard bottles from as many alternative sources as possible.

"We will take all necessary steps to protect the Company, our employees and our shareholders from any attempted anti-competitive conduct by this virtual monopoly retailer or any other player in the industry," says Brickman.

For more information: Jane Widerman, Jane Widerman Communications Inc., 416/534-9888; email, janew@widecomms.com.

Brick Brewing Co. Limited and The Beer Store

BOTTLE BACKGROUNDER

Brick Brewing Co. Limited seeking injunction against The Beer Store

· Brick Brewing Co. Limited (TSE:BRB) is seeking an injunction against The Beer Store, also known as Brewers Retail Inc.

· The Beer Store has threatened that as of November 1, 2002 it will no longer release to Brick its share of empty industry standard bottles (the familiar long necks) for re-use.

· The Beer Store alleges that Brick's use of the "stubby" bottle for its popular Red Cap beer is a breach of The Beer Store's standard brewer's user agreement.

· Brick's standard brewer's user agreement with The Beer Store expressly permits non-standard bottles and only requires that a brewer using non-standard bottles pay extra handling fees. The Beer Store has charged Brick those extra fees since the launch of the stubby, and Brick has paid them in full.

· Threat to restrict Brick's access to industry standard bottle empties appears to be in reaction to the successful launch of Red Cap in the stubby beer bottle in April 2002. Red Cap and the stubby have been very well received in Ontario and are being requested for other Canadian markets.

History of The Beer Store

· According to The Beer Store website: "Today's Beer Store was created in 1927 (following the repeal of Prohibition) by a group of brewers working with the Government of Ontario to create a responsible system for beer distribution in the province."

· The Beer Store website also states: "The Beer Store is owned by three Ontario brewers: Labatt, Molson and Sleeman."The Beer Store is committed to fulfilling our founding principles of providing efficient beer warehousing, distribution, and retail\wholesale sales for any brewer large or small, foreign or domestic who wishes to use our system. No brewer is refused access, nor is any legally approved brand refused entry. The system operates with common rules and a service fee mechanism based on volume. We provide retail and distribution services for over 25 Ontario brewers and 35 other Canadian and foreign brewers from the cottage, micro and large brewing industries."

· The Beer Store is the primary distribution and sales channel for beer in Ontario, operating 436 stores in Ontario and servicing 17,000 licensed bars, hotels and restaurants, as well as servicing approximately 600 government-owned LCBO retail outlets.

Different bottles in The Beer Store system

· Beer in Ontario is sold in industry standard bottles (ISB) and non-industry standard bottles, such as the stubby.

· Many of the beers sold in non-industry standard bottles are in the fast-growing premium market and are dominated by imports such as Heineken, Stella Artois, Sol, Corona, Bass, Miller Genuine Draft, Lowenbrau, Becks, Grolsch and Pilsner Urquel, which are owned or distributed by Labatt, Molson and Sleeman, as well as domestic beers like Moosehead and the Sleeman brands.

· The three major brewers, collectively selling more than 90% of The Beer Store volume, use both standard and non-standard bottles. There are over 50 non-standard bottles in The Beer Store system.

· The major breweries and many small breweries entered into an industry standard bottle agreement in 2001 that provided cash payments to small brewers if they agreed not to introduce any new products in non-standard bottles. Brick found this agreement too restrictive and refused to sign it.

· Brewers such as Brick have always paid additional handling fees as part of their user agreement with The Beer Store to handle non-industry standard bottles.

· Close to two-thirds of Brick brand package sales are in the industry standard bottle.