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Thursday, July 10, 2008

The Beer Store - My 2cents

'Bad Brew,' the three day series written by Toronto Star’s Dana Flavelle, started last Friday and was to wrap up Monday. However, things still seem to be rolling. Unless you've been sleeping under a rock or reading this from another province, you've already heard about this. Flavelle authored an in-depth series about the method in which Ontario citizens are forced to purchase alcohol, more specifically, buying beer from the Beer Store.

The series was broken into many parts and included titles such as: Do you know who owns the Beer Store? Express stores hurt small brewers, Cornering the beer market, The real reason beer cost more than it should, Ontarians thirsty for answers, Petition protests beer monopoly and Beer monopoly petition grows. It was very well written and well researched as it included quotes from craft brewers, the Ontario Craft Brewers Association president, the president of Canada’s National Brewers, the Premier’s office, the Ontario Restaurant, Hotel and Motel Association and the Liberal government.

The series has caused quite a stir in the brewing industry as well as the online community of beer bloggers and beer websites. Cass Enright, the founder of Bar, has since created a new website dedicated to 'freeing our beer' ( and a gentleman in the blue collar city of Hamilton has started an online petition that will later be sent to Premier McGuinty and his Liberal government. Alan over at A Good Beer Blog has chimed in on the subject and the discussion on Bar Towel has reached 103 (at the time this was written). The Star's website has also seen their fair share of comments in relation to Flavelle's writing as John Bowden from Great Lakes, John Wiggins (founder of Creemore) and Jeff Nelson (President of Canada’s National Brewers) have all taken part and offered their insights.

The Beer Store proudly boasts that they sell over 300 brands from 75 different breweries yet the majority of that beer is actually owned, or the rights are owned by Molson-Coors, Labatt Breweries and Sapporo. If you take a look at the Beer Store's website and do a search for 'all brands', *Molson-Coors owns/represents 42 brands, Labatt 48 and Sapporo 35 (*based on my calculations-numbers may be off slightly). Subsequently, OCB members represent 48 brands, mostly coming from Brick Brewery in Waterloo, the godfather of local breweries. I should note that there are 29 breweries represented by the OCB. That number is staggering. 29 breweries equal only 48 brands while 3 multi-national breweries represent 125 at the minimum, and own one of the two places in the province where you can legally purchase beer to take home. If I were a craft brewer I’d welcome craft beer retail outlets.

While this may surprise some readers, it must be pointed out. Some of the craft breweries in Ontario are strongly opposed of having convenience stores sell their products. Why? It's a good question that requires more time and understanding. Essentially the breweries would have to look into hiring a distributor to ensure their beer gets to each location, which for some is simply not an option. There is also the issue of the big breweries powering their way into these convenience stores and buying the majority of shelf space. If you walk into a store today and go to the pop section you'll see two fridges, Pepsi or Coke. Would this happen in the case of beer? I know Quebec does it and it is successful. The grocery stores in the States do and the small breweries are successful. It would take time to build it up.

Would smaller breweries entertain the idea of 'Craft Beer stores' such as the wine racks found in certain grocery stores? Why not! After all, McGuinty came out yesterday and said he wants to see more Ontario wines sold here in the province, so technically he should welcome the idea of having craft beer stores. Nay. Why? Because he feels that underage drinking would skyrocket. I guess wine is more sophisticated and he figures teenagers won't be shopping in these wine shops (Wine Rack has 160 outlets) or stealing from them. I bought all kinds of booze, beer, wines, whiskey etc. when I was in high school from both the Beer Store and the LCBO. I even worked for a short time at the LCBO and I know beer would sometimes be sold to minors. Was it done on purpose? Hell no, there’s just no way to curb it. If they want it, they'll get it.

The Beer Store does have its benefits though. As mentioned in the series, the Beer Store is a leader in recycling efforts; helping to ensure bottles are re-used and cans are re-molded. The lines are fast; you’re in and out without over-spending on other items like what happens at the LCBO. Their cold storage is something that the LCBO should consider for their back areas. I know some of them have a cold room where they can store the excess beer, which is great for consumers. Kegs, you can…pardon me, you HAVE to purchase kegs from the Beer Store should you be hosting a party or own a pub/restaurant. Come to think of it, those are the only positives I can come to think of.

The bad things are glaring and Ms. Flavelle showcased them brilliantly. They charge way to much for shelf space, stock smaller brands at the back of express stores, advertise the big brands with large posters around the inside perimeter of the stores, withhold financial forecasts, outcomes and plans, don’t provide kickbacks to non-owners, are dirty, have un-educated employees (in beer knowledge) and charge way to much for floor displays. I don’t understand how three brewing companies can own a retail outlet and charge smaller breweries a fee to sell their beer. It makes absolutely no sense that today’s government, or past government’s for that matter, have let it continue over all these years.

Unlike some of the members of Bar Towel and possible readers of this blog, I am a fan of the LCBO for the most part. I have interviewed Ms. Rhee, Category Manager of Beer (see spring issue of TAPS: Canada's Beer magazine) and heard the improvements and heard the positive things planned for the future. I’m not old enough to remember how lousy the beer section used to be at LCBO’s, but there is no doubt they are improving. They are open to the idea of promoting local craft brewers and even recommend it at various times throughout the year. That being said, we want to see more selection. Problem is, and I don’t think I’m the only one how would agree on this, is that beer geeks don’t tend to purchase entire cases of beer. Instead they (we) settle for a six pack, one beer to rate, one in case the first one’s off and one to cellar (if do-able). The other three are then used for trades or group tastings. There is nothing wrong with doing that, I do that, but the vast majority of beer drinkers tend to purchase a couple of flats a month and they prefer to stick with what they THINK is good beer at a discount price. This is why the Beer Store works.

Are independent retail stores the answer? I don’t know. Would it even help with the importation of foreign beer, as it would still have to go through the LCBO testing process? Again I don’t know, but here is where Dalton can help the small brewers. Permit the LCBO to sell more than just six packs. Let them sell twelve packs and flats. Give the brewery representatives the opportunity to select which store should receive what size of package or at least work with store managers to make sound decisions. He can listen to the panel that recommended change back in 2005 and break down the monopoly.

So what can we do in the mean time? Write letters to the Premier, to opposition leader John Tory, to your local newspapers, sign the online petition leave comments on Enright’s new website, join the Bar Towel and post your comments, purchase beer from your local brewery, support the LCBO (money goes back into the tax payers hands and they will only continue to improve) and for god sakes, don’t shop at the Beer Store. We have to make sure that this positive media coverage doesn’t die down. We can’t let it be yesterday’s news.

And most importantly, Support your Locals!!


Anonymous said...

Nicely put! I agree with you on many points you made.

Anonymous said...

Well put Troy. The Big boys have to much control and r really really hurting the small brewers. The gov really needs to step in and change this old, out of date system and step in to help the locals that actually put there money back into the local economy ( not Belgium or the U.S. )

Troy Burtch said...

Anonymous 1 - thank you. Glad to hear more people share my thoughts.

Anonymous 2 - thank you too. It also looks like we agree. "Support your locals" is my tagline.

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