Ontario’s craft brewers deserve better access

January 14, 2015

BeerIt seems there’s a new one springing up somewhere every week.

Upstart craft beer makers, brew pubs and microbreweries are everywhere now, riding a wave of popularity among beer drinkers who want more variety and flavour from their suds.

But getting their products on store shelves in this province is another matter.

In Ontario, the near-monopoly enjoyed by the LCBO and the Beer Store can mean the province’s growing number of craft brewers still face too many obstacles trying to get their beer to the beer-drinking public.

The Beer Store, which objects to the suggestion they’re anything close to a monopoly, knows craft beer is a growing segment of its business, and has been expanding the amount of made-in-Ontario options.

But craft beer makers complain they’re not doing enough to offer consumers access to their locally made brews.

They’re offered a tiny slice of the pie, while the vast majority of shelf space goes to the same mega-brands that are owned by the foreign companies running the Beer Store.

Small craft brewers say they’re forced to work within what’s essentially an unfair system, which basically gives three massive, foreign-owned competitors (AB InBev, MolsonCoors, and Sapporo) the power to restrict the little guy’s sales.

They say the Beer Store’s listing fees can be prohibitively expensive, and complain that rules around packaging and quantities mean they can only offer a fraction of the beer they’re brewing.

But a new report by a provincial advisory panel on government assets recommends some ways to improve things for Ontario’s craft beer industry. They suggest, among other things, that the Beer Store start sharing a greater portion of the significant profits generated by the government-sanctioned private monopoly.

More importantly for smaller brewers, the panel suggests introducing more competition into the way Ontarians buy beer, including “the possibility of opening a limited number of stores featuring craft beer.”

They also say the LCBO should be allowed to sell 12-packs of beer instead of just six-packs. That would help craft brewers, though cases of 24 would still be exclusively sold at the Beer Store.

The Beer Store, not surprisingly, isn’t thrilled with the idea of any changes that would increase the competition they face. They’re pushing back, just as they warned selling beer in convenience stores would bring higher prices, reduced selection, and less ability to keep alcohol out of the hands of minors.

Last month, the president of Canada’s National Brewers, which runs the 448 Beer Stores across Ontario, warned consumers would pay directly for any such changes.

Jeff Newton told the Toronto Star that “adding new taxes to The Beer Store and selling larger packs at the LCBO, where government adds another $4.95 to every case of beer, is a recipe for higher beer prices.”

The Beer Store, of course, does some things very well. It runs a strong recycling program and is skilled at getting big brands distributed to bars and restaurants across Ontario. But its critics charge it has been slow to adapt to the changing tastes of consumers in this province.

Because the Beer Store controls so much of the distribution system in Ontario, smaller craft brewers complain it can prevent them from growing into larger companies. They have the demand from customers and support from banks, but don’t have a good way to get their beer into the hands of the people who want them.

Ontarians clearly have a growing taste for made-in-Ontario craft beers. That’s why a lot of people think it’s high time we start making it easier for our own domestic producers to sell us their suds. I’ll drink to that, too.

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