Connecting for a Better World2 Striving for a Better World At Labatt Breweries of Canada, in all that we do we recognize our responsibility to improve the world where we do business.

2011 Global Citizenship Report | Canada

Connectingfor a BetterWorld

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Striving for a Better WorldAt Labatt Breweries of Canada, in all that we do we recognize our responsibility to improve the world where we do business. We are committed to building a company for the long-term with a legacy to be proud of — for the people who work for us and with us; for future generations and the environment in which we live; and above all for our consumers who we hope will always enjoy our products responsibly and be as proud to choose them as we are to create them.

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Responsible Enjoyment We brew our beers to be enjoyed responsibly by those of legal drinking age.For a quarter century, Labatt has been a Canadian leader in encouraging consumers to enjoy our beer responsibly and moderately and in the fight against drinking and driving — the societal issue that concerns more Canadians than any other.

Environment We are committed to a sustainable approach to the use of key natural resources; we focus our environmental initiatives on four key issues — water, energy, recycling and packaging.

Community and Heritage We are committed to making a difference through our people, the integrity of our business conduct and our community support. We have a long-standing tradition of giving back through sponsorships, charitable donations and our employees’ personal involvement.

Our dream is to be the Best Beer Company in a Better World by focusing on three key pillars:3

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Report Highlights

At Labatt Breweries of Canada, our dream may be ambitious, but our efforts are constant, our resolve is unshakeable and our commitment is strong.

The goal of our three-year-old Better World initiative is to make a positive contribution to the world around us by investing in organizations, projects and activities that improve the communities where we do business, by extending our pioneering efforts in promoting the responsible enjoyment of our products, and by improving our environmental performance and encouraging sustainability as a day-to-day business practice.

In 2011, Labatt advanced its Better World dream through a range of successful initiatives targeting key areas including responsible enjoyment, the environment, health and safety and the community.

For instance, Labatt put the spotlight on the prevention of underage drinking with its Family Talk About Drinking program, and its new Take the Pledge moderation campaign that targets the prevention of drinking and driving.

Labatt’s Better World actions in its breweries, warehouses and offices, as well as at the community level improved its environmental performance and inspired employees and consumers to do more in pursuit of conservation at work and at home. Highlights included the many World Environment Day and World Water Day projects that saved water and other natural resources, as well as multiple events and contests that helped boost environmental awareness and inspired both learning and action. We are proud that our London and Montreal breweries each earned environmental awards recognizing their individual efforts.

Last year, as part of its Community and Heritage commitment, Labatt’s deep roots, history and impact in Canada were celebrated with the donation of two significant corporate archival collections to institutions in London, Ontario, the home of company founder John Kinder Labatt.

Volume Produced (million hectoliters)

9,893Domestic: Budweiser, Bud Light, Alexander Keith’s, Kokanee, Labatt Blue International Premium Brands: Stella Artois

6 Key BrandsEmployees3,000

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Promoting Responsible EnjoymentBeer is enjoyed responsibly by the vast majority of consumers, but we recognize that alcohol misuse may cause harm. That’s why at Labatt Breweries of Canada, we have been an industry leader for more than two decades in encouraging consumers, especially young adults, to enjoy our beer responsibly and moderately.

In 2011, we developed and promoted responsible drinking programs in all of our key markets, with a primary focus around preventing drinking and driving, high-risk drinking and underage drinking.

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In September 2011, we announced global company-wide targets on key responsible drinking initiatives that we will strive to achieve by the end of 2014. Our goals are to:

2014 Global Responsible Enjoyment Goals

Reach at least

100Madults with programs developed by subject matter experts, that help parents talk with their children about underage drinking

Provide ID-checking materials and other educational information to at least

500Kbars, clubs, restaurants and grocery stores to help them prevent sales to minors

Reach at least

500Mlegal-age consumers to increase awareness of the importance of using a designated driver or safe-ride home.

Provide training on responsible alcohol beverage sales to at least

1Mbartenders, waiters, grocery store clerks and others who serve and sell alcohol 

Invest at least

300M(USD) in advertising and programs to help remind and educate consumers about the importance of responsible drinking

Celebrate our annual Global Be(er) Responsible Day

promoting the importance of responsible drinking among our employees, retail customers and consumers

1DAY

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In addition, we will continue to train all of our sales and marketing employees annually using the Anheuser-Busch InBev Commercial Communications Code and support enforcement of industry advertising and marketing self-regulatory codes.

Labatt Responsible Enjoyment Initiatives

For a quarter century, Labatt Breweries of Canada has been a Canadian leader in encouraging consumers to enjoy our beer responsibly and moderately and in the fight against drinking and driving – the societal issue that concerns more Canadians than any other. We constantly update our programming to ensure it remains relevant and effective. Labatt is a pioneer in developing partnerships to encourage moderation and discourage underage drinking.

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Promoting Responsible Enjoyment

To help achieve our national and global goals in 2011, Labatt initiatives included:

Family Talk About Drinking – a Prevention ProgramIn September, Labatt launched its latest innovative responsible drinking initiative, the Family Talk About Drinking prevention program, which includes the Family Talk website and the Labatt Family Talk Parent Guide. Parents can use the Family Talk program, which draws on the knowledge and experience of experts in this field, to talk to their children about making smart, safe decisions about alcohol. Via a public service email, Labatt directed approximately one million Canadian mothers, about 25 percent of the total moms in Canada, to a dedicated Family Talk television program on a major national cable network.

Take the Pledge – a New Moderation CampaignAcross Canada, the new Take the Pledge moderation campaign’s billboard and street level ads showed just how far people will go to avoid drinking and driving – for example sleeping on the back of a statue, on a park slide and atop a tree branch. The campaign directed consumers to Labatt’s responsible drinking Facebook page where they “signed” a pledge to not drink and drive, with more than 10,000 individuals participating. In appreciation, Labatt donated $1 per pledge to the True Patriot Love Foundation in support of Canadian Military Families, and if the signers shared the link with a friend, the company donated an additional $1.

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Take the Pledge Goes to University Campuses for Global Be(er) Responsible DayIn September, Labatt partnered with about 20 of Canada’s major universities and colleges to bring Global Be(er) Responsible Day to students. Labatt employees, all wearing Take the Pledge t-shirts, used iPads to replicate the successful Facebook application face-to-face and in real time. As a result, in just a single day, more than 6,200 university and college students took the Pledge Vs. Drinking N Driving on the spot.

Budweiser TV Ad Designates Holiday DriversA new Budweiser TV spot, “Great times wait for the designated driver,” aired Canada-wide during the holiday season. It underscored the importance and widespread acceptance of having a designated driver when going out to social, sporting and entertainment events. It reinforced Labatt’s clear, consistent message: “Don’t drink and drive.”

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Operation Red Nose/Nez RougeFor the third consecutive year, Labatt participated in Operation Red Nose/Nez Rouge in the Province of Quebec, with volunteers taking the wheel for people who didn’t feel comfortable driving their own vehicles home during the Christmas and New Year holidays. More than 83,000 people got a safe-ride home thanks to this program.

Montreal’s City Bus as Designated DriverLabatt and the Société de transport de Montréal joined forces to invite festival goers and night owls to select a night bus as their “designated driver.” The initiative promoted the use of public transit “after hours” in downtown Montreal.

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Taking Care of the EnvironmentAt Labatt Breweries of Canada, environmental stewardship is a key focus of our everyday operation. We continually seek to operate more efficiently and maintain our quality standards, while carefully considering our impact on the environment. We focus our environmental sustainability initiatives on four key areas – water, energy, recycling and packaging.

In addition to promoting efficiency and avoiding waste – important aspects of our culture – we also recognize we have a role to play in tackling shared challenges such as freshwater availability and quality.

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2012 Global Environmental Targets

In 2009, we announced global company-wide targets on key measures such as water and energy use, as well as carbon emission reductions that we will strive to achieve by the end of 2012. Our 2012 targets are:

Increase our waste and byproduct recycling to 99 percent.

Reduce water use for beer and soft drinks plants to an industry leading 3.5hl/hl product.

Reduce energy use per hectoliter by 10 percent.

Reduce CO2 emissions per hectoliter by 10 percent.

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In 2011, Labatt Breweries of Canada contributed significantly towards achieving our global targets.

Labatt’s commitment to the environment and to using natural resources in a sustainable manner is completely integrated into our everyday business practices.

Employee passion for our Better World dream and activities is fueled through their commitment to sustainability, as well as the fact that Labatt tangibly recognizes results by linking bonuses to Better World targets.

Our employees have the most significant impact on water and energy consumption because they know our processes better than anyone and impact them daily. We rely on their ability to observe and analyze our consumption patterns, then tap into their personal creativity to develop and implement innovative solutions.

We enable our employees to take the initiative on solutions through our industry-leading Innovation Program. It is unique because it recognizes that even the smallest, simplest ideas make a difference and that, when pooled together, seemingly minor results can have a highly significant, cumulative effect. To get the most out of the Program, ideas are recorded in our searchable Ideas Database so that employees across Canada and around the world can find solutions that will work in their own breweries.

Improving Environmental Performance in Canada

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From 2006 –2011, Labatt employees have implemented 815 water conservation ideas and, as a result:

Improving Environmental Performance in Canada

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98%Recycling Rate

22%Reduced Electricity

Consumption

66%Total Operating Waste

Reduction

28%41%Reduced Water Consumption

Reduced Fuel Consumption

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Improving Environmental Performance in Canada

In 2011, Labatt brewery employees across Canada identified resource-saving opportunities and determined low- and no-cost solutions that reconfigured existing processes and reused existing equipment whenever possible.

For example, the Montreal brewery is saving 300,000 hl of water and $60,000 annually by using hot water from another process to rinse the beechwood chips used to brew Budweiser. In Edmonton, the Budweiser brewing team takes the centrifuge offline when they foresee more than one hour of idle time, which saves enough water to supply 18 households and enough electricity to power 150 households annually. Simply recapturing overflow water at the Halifax pasteurizer is saving 180,000 hl water and $25,000 annually. Likewise, Creston captures cooling tower water and uses it to cool compressed air and CO

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which saves 628,000 hl of water and $15,650 annually, as well as $20,000 in electricity.

During the year Labatt and its employees stepped up to support specific environmental initiatives and charities. Here are a few examples:

Alexander Keith’s Green Initiative Supports Four Eco-Charities

Alexander Keith’s Green Initiative had both a national reach through partnerships with the Canada-wide Waterkeepers Canada and Nature Canada, as well as a local focus with Trees Ontario and Nova Scotia-based Adopt-A-Stream. Consumers who bought specially- marked, 24-bottle packs of Alexander Keith’s India Pale Ale or 15-bottle Alexander Keith’s mixer packs could click on an Alexander Keith’s Facebook page to suggest a brand donation to their eco-charity of choice. They could also share the environmental message with friends, and have the company donate $1. During the year, Alexander Keith’s Green Initiative contributed close to $16,000 to its four eco-charity partners to protect wildlife habitats, promote tree planting and preserve Canada’s lakes and rivers.

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World Environment Day (WED)

Anheuser-Busch InBev was an official WED sponsor and for the second consecutive year Labatt Breweries of Canada and its sister companies launched a global celebration to support WED with an active program that involves employees and their families. Labatt was instrumental in launching WED celebrations in Toronto, North America’s official host city for 2011.

Employees at each of Labatt’s breweries, warehouses and offices focused on water conservation and reducing their consumption of electricity and natural gas. Breweries participated in the third annual WED facility competition, inspiring 3,000 employees to engage in water-focused projects. Open houses at the various breweries also showcased Labatt’s commitment to sustainability to government officials and the general public, as well as employees’ families and friends.

To increase employee and public awareness, Labatt employees organized events that included the Dash 4 Trash in Creston, B.C., the Thames River Clean-up in London, Ontario, a clean-up near the Montreal brewery site and a Dragon Boat race for Toronto employees to benefit a water charity and increase water conservation awareness.

Several breweries also ran short- and long-term initiatives designed to inspire carpooling, walking, cycling and taking transit to work. On-site fairs gave employees information on everything from composting to reducing lunch-time waste. To further engage employees and show that making a difference can be fun, the Best of the Beards competition asked employees to put down their razors to save water and waste.

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World Water Day

For World Water Day in March 2011, employees focused on finding, tagging and repairing leaks. At various work locations, trades partnered with operators to identify the equipment that required attention, and Grow Some and Shave Every Drop campaigns asked employees to stop shaving to reduce water use. Water consumption awareness was increased through posters of real-life onsite leaks, residential water consumption reduction kits and even art contests for employees’ children.

Awards & Recognition

Montreal In 2011, the newspaper Les Affaires ranked the Montreal brewery as one of the 50 most admired businesses in Quebec.

Labatt’s Montreal brewery’s packaging-specific environmental efforts also earned Recyc-Québec’s Special Mention 2011 award as part of its ICI ON RECYCLE! program. The brewery has saved 1,665 tons of cardboard annually since eliminating bottle partitions in its 24-packs back in 2004. Labatt’s Montreal brewery has reduced waste, saved trees and cut its operating costs (cardboard, electricity, maintenance).

In early 2012, the Montreal brewery also received an environmental award from the City of LaSalle’s Chamber of Commerce recognizing its efforts to recycle and reduce the consumption of resources such as water, electricity and natural gas.

LondonThe London brewery, Labatt’s largest, received a 2011 Water Efficiency Award from the Ontario Water Works Association, the industry association for drinking-water professionals. The London brewery’s 300 employees rely on a variety of management systems and tools, but attitude, awareness and education are equally important. Between 2007 and 2010, London’s water:beer ratio dropped from 5.12hl:1hl to 3.98hl:1hl – a 22 percent reduction over four years.

Employees are continuing to work toward Labatt’s Better World water:beer ratio of 3.5 hl/hl by the end of 2012.

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Community and HeritageA key aim for Labatt Breweries of Canada is to create value for stakeholders as well as shareholders, especially our employees and the communities in which we operate. We are proud of the positive and meaningful impact our business has on the communities where we work. We are improving our production facilities, modernizing logistics and commercial investments, and creating both direct and indirect jobs, as well as paying taxes and excise duties. By constantly improving our operations, we aspire to continue to create employment, improve economic standards and add value.

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Investing in Our Communities

In 2011, economic benefit generated by Labatt included ($CDN):

In addition, in 2011, Labatt made a number of significant capital investments that included:

At Labatt’s brewery in London, Ontario, a range of Better World capital investments were made to ensure sustainability. A $310,000 investment in a capture tank to divert beer from the drain has large financial and environmental benefits, while a $150,000 investment in two capture tanks, a pump and piping are capturing 390,000 hl water/annually. A utility rebate and $50,000 added LED lighting in areas where 24-hour illumination is required, but on/off motion control is not appropriate, to save 200,000 kwh/year. A $43,000 HVAC heat recovery coil is saving 1,250,000 MJ/year.

2.0Bon good and services

More than

400M 230Min federal, provincial and excise taxes annually in wages, employing about 3,000

people and generating approximately 84,000 indirect jobs across Canada

More than More than

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Investing in Our Communities

In addition to investing in our facilities, we also invest in our communities, recognizing that giving back is key to a sustainable approach to our business.Labatt has a long-standing tradition of giving back through sponsorships, charitable donations and our employees’ personal involvement. We are proud of our 165-year Canadian heritage and the rewards it has allowed us to share with Canada’s people and communities. We encourage our employees to volunteer their time and expertise to help better their communities. Labatt focuses its philanthropic investments on the individual needs of local organizations and activities where we can make a major difference.

Labatt and its employees support a variety of organizations, and the company matches donations from employees and retirees to Canadian charities and non-profit organizations through the Employee Matching Gift Program.

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The Labatt Brewing Company Archival Collection

In 2011, Labatt celebrated the culmination of more than four years of work when the company’s archives were donated to The University of Western Ontario in its hometown of London, Ontario.

Labatt turned the company’s largely unorganized corporate archives into a valuable historical collection that resides at the University of Western Ontario where it is accessible to scholars and the public alike. The challenge was to turn this underused, inaccessible asset that chronicles over 160 years of brewing heritage and corporate leadership into a benefit for Labatt and the community. It took archival experts more than four years to edit tens of thousands of boxes filled with Labatt’s historical documents down to 2,500 boxes, which were then catalogued and organized.

Labatt also donated $200,000 to The University of Western Ontario to assist them in digitizing portions of The Labatt Brewing Company Archival Collection. This will help preserve some of the key content of the collection and make it more accessible.

At the same time, the Labatt Material Culture Collection of original art, brewery artifacts and collectibles was donated to Museum London.

The transfer of the archives established a benchmark in heritage donations as the Canadian government deemed the material to be of “outstanding significance and national importance.” The collections were appraised at approximately $8.3 million.

It is Canada’s first brewing industry historical collection and supported Labatt’s Better World strategy by reinforcing our local heritage and our reputation as a corporate leader while diverting material from landfill and eliminating 158,000 pounds of greenhouse gas emissions. Historic TV and radio commercials and images can be viewed at www.labatthistoricgift.ca.

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Labatt and Employees Give Back

In 2011, the company and its employees donated and volunteered with a variety of organizations, including Pride Toronto, a premiere arts and cultural festival, and the Slave Lake Fire Victim Foundation to help that community rebuild after a devastating fire in May 2011.

Labatt and Alexander Keith’s supported the 2011 Canada Winter Games, the largest multi-sport event ever held in Nova Scotia and Halifax’s first Canada Winter Games. Alexander Keith’s also sponsored a speech by renowned primatologist and conservationist Dr. Jane Goodall in celebration of the 50th anniversary celebration of her work, and supported the Adopt-A-Stream program – a partnership with the Nova Scotia Salmon Association and the Nova Scotia Liquor Corporation that aims to protect and restore local watersheds and improve Nova Scotia’s water quality.

In Creston, B.C., Labatt’s Columbia brewery partnered with the Canadian Avalanche Association, which educates outdoor enthusiasts on avalanche preparedness and safety while enjoying recreational activities and supported the Canadian Cancer Society through the Creston Relay for Life.

Labatt continues to invest in the power of Canada’s young people with its Scholarships for Children of Employees program. Labatt’s 2011 contributions will help the scholarship winners reach their academic and life goals for up to four consecutive years.

Labatt is also a long-time supporter of amateur sports in Canada.

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We also recognize that by showing respect for our people through competitive compensation, benefits and a safe work environment, we tap into their desire to help us be a responsible corporate citizen.

Dream, People, Culture:

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Safety

At Labatt Breweries of Canada, we operate day-to-day using a set of principles that define our culture and our approach to our employees, our customers and to consumers. One of these principles states, in part: We don’t take shortcuts…the safety of our people can never be compromised.Workplace and employee safety has long been a major focus for Labatt, and we set annual targets to reduce injuries and lost-time accidents with the ultimate goal of no injuries at all.

Across Canada, in every brewery and warehouse, Labatt puts safety first by offering the training, audits and support required to keep safe attitudes and behaviour top-of-mind.

That commitment continues to produce measurable results.

At Labatt Breweries of Canada, we saw a 13 percent decrease in our total lost-time incidents in 2011 over 2010, and we’ve reduced lost-time incidents by 86 percent between 2005 and 2011. In 2011, a number of Labatt locations extended zero lost-time incident records ranging from two to eight years.

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13%Less LTIs in

2011 over 2010

86%Less LTIs from 2005 to 2011

In addition, Labatt’s Montreal brewery earned the Commission de la santé et de la sécurité du travail (CSST)’s Prix Innovation 2011 award in the Montreal region. At the Montreal brewery each week, all production lines are stopped for 15 minutes to allow front-line managers to address everything from safety milestones to near-misses, new safety equipment and procedures, and remind employees that every job can be done safely. Stopping the line shows employees that Labatt really does put safety before production. For World Safety Day’s Drive Safely at Work & Home theme, Labatt asked employees to avoid distracting driving behaviour and recommit to seatbelt use to stay safe. Employees were able to access the Street Smart online presentation on seatbelt use and sign the Hang Up and Drive pledge online.

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83%Male

Employees

17%Female

Employees

Our work force is composed of 83 percent male and 17 percent female employees.

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Outlook for 2012

Labatt’s Better World plans for the coming year include having Budweiser assume responsibility for the majority of our responsible enjoyment programming. As part of this effort, Labatt will build on the Good Sport fan management program, partnering with key sports teams, to promote the Don’t Drink and Drive message.

We plan to extend our successful Family Talk About Drinking and Take the Pledge programs and will continue to collaborate with licensees and retailers for Global Be(er) Responsible Day and with local environmental and not-for-profit groups to boost awareness and provide information on World Environment Day, World Water Day and World Safety Day.

In addition to our ongoing support for charities and other worthwhile organizations in the communities where we do business, we will introduce a disaster recovery program with funds and efforts focused on the unexpected catastrophes that occur from time to time and their unfortunate victims.