In 1915 Prohibition began in Canada when public bars were banned in Saskatchewan. A year later prohibition was instituted in Ontario as well, affecting all 64 breweries in the province. Although some provinces totally banned alcohol manufacture, however, some permitted production for export to the United States. Labatt survived by producing full strength beer for export south of the border and by introducing two "temperance ales" with less than two per cent alcohol for sale in Ontario. When Prohibition was repealed in Ontario in 1926 just 15 breweries remained and only Labatt retained its original management. This resulted in a strengthened industry position.
Labatt became a publicly traded company in 1945 with the issuance of 900,000 shares. In 1951 Labatt launched its Pilsener Lager. When it was introduced in Manitoba, the beer was nicknamed "Blue" for the colour of its label and the company's support of Winnipeg's Canadian Football League (CFL) franchise, the Blue Bombers. The nickname stuck and in 1979 Labatt Blue claimed top spot in the Canadian beer market, a position it has held ever since.
Labatt's innovations include the introduction of the first twist-off cap on a refillable bottle (1984).
Today, Labatt is owned by the large Belgian brewer Interbrew.