WIS. BREWER FILES TRADE COMPLAINT AGAINST CANADA

WIS. BREWER FILES TRADE COMPLAINT AGAINST CANADA

A U.S. regional brewer announced Wednesday that it has lodged a trade complaint in Washington aimed at putting pressure on the Canadian provinces to lift restrictions on imports of American beer.

At a press conference in Canada's federal capital, top executives of G. Heileman Brewing Co., of La Crosse, Wis., said a petition was filed late Tuesday with the Office of the U.S. Trade Representative under Section 301 of the United States Trade Act.It urges Washington either to reach an acceptable settlement with the Canadian government or to take retaliatory action.

"The U.S. market is open to Canada, but we in comparison are frustrated at our every attempt to bring quality products to the Canadian beer consumer," said Bob Bennardo, managing director of the brewer of the Lone Star and Rainier brands.

He noted that in 1989 Canada exported 30 million cases of beer to the United States, while U.S. brewers exported 6 million cases of beer to Canada.

The petition was promptly attacked as groundless by the Brewers Association of Canada and provincial government officials.

Heileman alleges numerous violations of the General Agreement on Tariffs and Trade and the U.S.-Canada free trade agreement. The latter, which took effect on Jan. 1, 1989, phases out remaining tariffs across the 49th parallel over a 10-year period.

The beer issue is expected to be raised during a meeting in Toronto on Friday between Canadian Trade Minister John Crosbie and Carla Hills, the U.S. Trade Representative. The trade officials meet on a regular basis to review the progress of the trade liberalization accord.

Last week Mr. Crosbie issued a stiff warning to the provinces to put an end to trade barriers that discriminate against beer produced outside individual provinces.

Only beer produced within a given province can be sold in the same province. Provincial liquor boards have a monopoly on the distribution of liquor and beer in Canada.

While each province acts independently, Mr. Bennardo said there was ''considerable similarity in the manner in which they restrict the importation and distribution of U.S. beer."

He cited the province of Ontario, which last summer infuriated U.S. breweries by slapping an extra handling charge on imported brands to cover warehousing and shipping costs. Heileman's Ontario sales of Lone Star beer plunged from a peak of 350,000 cases a month to 2,000 cases, Mr. Bennardo said.

"The actions in Ontario were the straw which broke the camel's back," said Randy Smith, Heileman's vice president and general counsel.

But Ontario Trade Minister Monte Kwinter replied that "we are going to counter the U.S. allegations."

There has been "a very dramatic increase in the market share of the U.S. brewers," he said.

Also dismissing the trade complaint as "without foundation" was the Brewers Association of Canada, which issued a statement stressing ''significant changes" in the Canadian beer market to enhance competition since the U.S.-Canada free trade accord was signed.

These changes include a 21 percent increase in imported beer listings across Canada and a threefold rise in sales of imported six packs of beer in Ontario alone.

Association President R.A. Morrison suggested there was a connection between the trade complaint and recent U.S. press reports about Heileman's

financial situation. Mr. Bennardo, however, denied that the company's initiative was linked to intense competitive pressures in the United States.

The Office of the U.S. Trade Representative has 45 days to accept the petition. Assuming it is accepted, U.S. trade law allows about six months to negotiate a settlement. Failing that, the issue would go to a trade watchdog panel at GATT, which already condemned Canada's beer regulations in 1988 after a complaint from the European Community.