It is perhaps not news to readers of this blog that The Beer Store and its foreign company owners occasionally get up to some shady dealings.
I’ve detailed the way big brewers buy their way into bars by illegally paying for draught line exclusivity and I’ve shared the odd fact that bar owners are required by law to buy their beer from The Beer Store, but this newest news might just be the shadiest.
It seems that licensees, i.e. restaurants and bar owners, are getting supremely gouged when they opt to purchase bottles of Molson and AB-InBev products for resale in their businesses. Indeed, in most cases licensees pay almost 30% more than the public when they opt to purchase brands like Coors Light and Canadian.
On January 16, 2014, the Canada Restaurants and Foodservices Association (CFRA) met with the Standing Committee on Finance and Economic Affairs for a pre-budget consultation and shared the surprising fact that they are paying considerably more than the public for beverage alcohol at both the LCBO and The Beer Store.
You might conceivably apply flawed-Ontario-liquor-law-logic to this fact and suggest that maybe licensees pay more because they stand to make a profit reselling the alcohol to patrons, but if that were the case then you’d assume there was a consistent markup across the board for beer sold to licensees, right?
Wrong. This is not the case at all.
In fact, the mark-ups only occur for brands of beer owned by the foreign companies that own The Beer Store. Consider the following chart, which the CFRA shared with the Committee:
|Brand||Public Price for 24||Licensee Price for 24|
|Mill Street Organic||$45.95||$45.95|
|Muskoka Dark Ale||$44.95||$44.95|
You’ll note that Coors Light, Canadian, Budweiser et al are marked up by The Beer Store almost 30%, whereas in the case of Ontario’s craft brewers like Mill Street and Muskoka, licensees typically enjoy the same price as the public and, in some cases–like that of Guleph’s Wellington Brewery–they actually pay less.
(Aside: Bar owners pay almost 50% more for Blue? Who the fuck drinks Blue?!)
So not only are bar owners required by law to purchase their beer from the foreign-owned Beer Store, but if they want to buy the brands that The Beer Store’s owners brew (those brands that most Ontarians sadly still prefer to drink), they are paying considerably more for no reason at all other than the fact that The Beer Store can get away with it.
Supposedly, in response to bringing these numbers to light, the Committee, the LCBO, and The Beer Store have all “committed to working with CRFA to find solutions,” but this is just all kinds of greasy.
The takeaway here though, if you’re a bar or restaurant owner seems pretty clear: It’s more cost effective to serve bottles of Ontario craft beer in your establishment. That, along with the fact that The Beer Store is screwing bar owners, is a message I don’t mind getting out to as many people as possible.
Hat tip to a nameless tipster who pointed me to this article on the CFRA website.