Sleeman’s Spring Bank Brewery produced beer until 1939

The following is a re-print of a past column by former Advertiser columnist Stephen Thorning, who passed away on Feb. 23, 2015.

Some text has been updated to reflect changes since the original publication and any images used may not be the same as those that accompanied the original publication.

Last week’s column outlined some of the difficulties encountered by the Sleeman Brewing Company after the death of George Sleeman in December 1926. 

With the end of prohibition in early 1927, a Toronto law firm, in cooperation with George’s son, Henry Sleeman, established a new firm. 

Newspapers carried advertisements for shares in Sleeman’s Spring Bank Brewery suggesting a rosy future for the new firm, but the optimism did not last long.

The brewery ran into trouble even before the first bottles rattled out of the plant. Henry Sleeman had estimated that the brewery would operate near its full capacity of 120 barrels per day. That figure proved hopelessly optimistic. 

Dozens of breweries in Ontario, anticipating a booming market for beer, were scrambling for a share of a market that turned out to be smaller than they expected.

Ontario residents had drifted away from beer as a beverage since the Canada Temperance Act of 1916. Brewers anticipated that they would easily sell a ton of beer when the government made full-strength beer legal. A major problem was distribution. The Liquor Control Board was not interested in selling beer in its stores.

Several of the major breweries soon agreed to set up their own distribution company, called the Brewers Warehousing Company, operating under close government scrutiny. 

There were complicated regulations for stores, and its network expanded slowly; six years after prohibition  ended, there were only 102 stores in Ontario.

Until the network was established, breweries had to rely on direct sales at the brewery for much of their income. As it turned out, beer production in the late 1920s barely exceeded that of the “near beer” years of prohibition. There were modest gains for three years, and then the market nose-dived as the Great Depression set in, bottoming out in 1934 at an all-time low. 

Although prohibition had ended in Ontario in 1927, public drinking establishments did not return until 1934.

The new rules of 1927 were drawn up in part to placate the temperance movement as far as possible. Temperance people objected to the barroom as much as liquor itself: they viewed drinking establishments as anti-social, undermining family life, and draining money that should be spent to support the household.

With no place to go after work for “a beer with the boys,” working men did not drink a lot of beer. Before prohibition, most beer had been sold in hotel barrooms, and breweries in those years had vied to line up hotels as their distributors. The post-1927 system, with sales through government-supervised outlets, was a new universe for breweries.

The Sleeman firm, in the years before prohibition, had two strengths: production efficiency and distribution. Old George Sleeman had been fascinated with new technology and processes. 

Using the latest machinery and methods, he was able to produce beer at lower cost than other brewers, and consequently could undercut the competition and still make a good profit. The firm, in the late 19th century, had built up an extensive distribution network across Ontario, through 15 wholesale distributors. 

In 1927 though, that network was gone, and the technological edge over competitors had closed. George A. Sleeman tried to re-establish the Sleeman brand, but it was no easy chore in the new and somewhat chaotic marketplace. Desperate to increase sales, Henry Sleeman turned out beer above the legal limit of 3.2% alcohol for distribution through an illicit network of agents. He also produced beer without paying government taxes on it, though the risks were great.

Surprisingly, earlier unpleasant and costly brushes with government authorities, including the $5,000 fine in 1929, did not have a chastening effect on Henry Sleeman. 

The firm was in trouble again in October 1930. Police discovered 150 cases of beer in a shed owned by A.L. McDonald, one of the firm’s employees who lived near the brewery. The beer was bottled in the Sleeman clear glass bottles, but they were packed in cases bearing the labels of various other breweries. 

None of the bottles had the required Liquor Control Board seals on them. Magistrate Watt slapped a $500 fine on McDonald. More seriously, he suspended the brewery’s licence indefinitely. The Spring Bank Brewery did not get it back until 1931.

During the interval the brewery lost market share for its legal beer, and had to sever connections with the underground market. Government inspectors came sniffing around regularly. Henry had to shut down completely for several months.

The final straw came in 1933. Government inspectors caught George A. Sleeman attempting to run a shipment of beer into Detroit. The firm had not paid any taxes on it, as was then required for beer shipped out of the country. 

Fines and back taxes were more than the Spring Bank Brewery could afford. The Toronto shareholders who controlled the brewery deliberated on the fate of the company, which had never been profitable. With no likelihood of achieving profitability, the shareholders accepted an offer from the Jockey Club Brewery of Hamilton for the production facilities. Henry Sleeman, who was now past 70, retired.

Production of beer continued at Guelph under the new owners. The Ontario brewing industry went through a period of consolidation beginning in the late 1920s – the Kuntz brewery in Waterloo, for example, was gobbled up by E.P. Taylor’s Canadian Breweries in 1929. Jockey Club was another victim of the industry rationalization. 

In 1938, the Ace High Brewing Company acquired the firm, and at once discontinued the old brands. Within a year the new owners phased out production at Guelph. That was the end of a brewing tradition that dated back to 1847. No beer was produced locally until the micro-brewery movement of the 1980s, of which the present Sleeman Brewery was a part.

The original Sleeman Silvercreek Brewery on Waterloo Avenue in Guelph did not last as long. After losing it to the Bank of Montreal and reacquiring it in 1907, the Sleeman family used the property largely for the manufacture of malt and malt products, and made beer at the newer Spring Bank property. 

With the end of prohibition and the death of George Sleeman, the Sleeman family sold the Silvercreek property to its old rivals, the Holliday Bros Brewing Company, late in 1926, when the brewing industry was preparing to gear up to produce the newly-legal 3.2% beer. 

The Holliday family sold the property four years later, to a now-forgotten brewing firm called Canada Cream of Malt. The new owners continued the well-established Holliday name, but the business failed to turn a penny of profit. Production ceased in 1932. 

Standard Brands purchased the old Silvercreek Brewery and Malt House property in 1934, for use as a wholesale distribution warehouse for its grocery lines. Trucks came and went from the property for more than 30 years. 

The City of Guelph acquired the property in 1969, directly across the street from George Sleeman’s old house, “The Manor,” and demolished the buildings in preparation for road widening and the construction of the Hanlon Expressway.

The Holliday firm did not disappear quietly. Late in 1932 a malt supplier successfully sued the directors, claiming they had voted themselves considerable dividends after the brewery shut down and there was no hope of a profit. 

It was an interesting legal case, dragging on through appeals, and a good subject for a future column.

*This column was originally published in the Wellington Advertiser on March 16, 2007.