An agreement between Ontario’s provincial government and the foreign-owned The Beer Store (TBS) will bring six-packs of beer to 60 select grocery stores by Christmas of this year. By May 2016, the government says that 150 stores will be approved to sell beer, while all 450 stores will be stocked within three years.
Beer will only be sold in grocery stores with more than 10,000 square feet of space and only in six-packs. Additionally, 20 per cent of shelf space devoted to beer must be reserved for craft beers. All Grocery stores must also keep sales and hours of operation for beer equivalent to the standard TBS sets.
The changes stem from a 190-page document, which allows the multinational TBS corporation to retain control of the beer monopoly in Canada for 20 per cent of shelf-space dedicated to craft beer. Additionally, TBS must spend $100 million to spruce up its existing stores.
Despite the changes, TBS will remain the only authorized vendor for 12- and 24-packs.
The Beer Store is owned by Molson, Labatt, and Sleeman, which are in turn owned by MolsonCoors (America), InBev (Belgium), and Saporro (Japan). Around 80 per cent of beer sold in the province is through TBS, with an estimated $2.5 billion revenue annually. The Globe and Mail reported that TBS owners enjoy an additional $400-million due to the monopoly. This multinational-owned monopoly on Ontario’s beer markets dates back to 1927 when prohibition was repealed. During this time, the provincial government gave full beer retail control to a co-operative of all Ontario brewers to ensure safe and reasonable distribution. However, through several mergers and acquisitions, TBS is now owned by three multinational breweries.
“It is an exciting day for the people who love beer in Ontario,” said Ontario Premier Kathleen Wynne. “By December, the first 60 grocery stores will receive their authorizing to sell beer in Ontario. Beer in grocery stores could be seen as a holiday present.”
The Ontario government predicts that 10 to15 per cent of beer will be will be sold by grocery stores. There is a catch however: if stores sell more than 450 million annually, (which estimates to one million a year for each year) then the respective stores will have to pay a fee.
In a Globe and Mail article, Wynne said TBS can control their monopoly because the corporation keeps average beer prices down. Wynne continued to say that the monopoly creates a scale economy, which allows TBS to pass savings on to customers.
“Ontario consumers enjoy some of the lowest beer prices in Canada, and this needs to remain the case,” said Wynne.
Some large brewers, like Mill Street have shown support for Ontario’s new beer retail policies.
“These far-reaching changes are really significant for us as an industry and a province,” said Mill Street co-founder Steve Abrahms. “None of this would have been possible had our premier not set the wheels in motion.”
However, some smaller craft brewers do not share the same sentiments. Toronto’s Indie House Ale owner John Fisher tweeted: “[Ontario] is on sale to its highest bidder.”
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The Ontarion publishes independent, student-produced news, opinion, and commentary for University of Guelph students so that they can make informed decisions in their lives. To do this, The Ontarion provides learning opportunities and training in journalism, media production, leadership, board governance, and other aspects of nonprofit news.
The Ontarion is the University of Guelph’s independent student newspaper. It began in 1951 as part of the Ontario Agricultural College and then began to represent the entire University of Guelph once it amalgamated in 1964. The Ontarion incorporated in May 1970 as The Ontarion, Inc., a not-for-profit corporation registered with the province of Ontario.