The foreign brewers who own The Beer Store may be price-gouging Ontario bar and restaurant owners

(Image: Gary J. Wood)

(Image: Gary J. Wood)

Coors Light, Budweiser and Molson Canadian aren’t particularly pricey brands of beer—unless you own a bar or restaurant in Ontario. For the province’s tens of thousands of liquor licensees, these premium beer brands come at huge markup.

Take a case of Canadian. For a restaurant or bar, a two-four costs a staggering $44.75, about 30 per cent more than its retail price of $34.95. Labatt Blue, inexplicably, costs almost 50 per cent more than the retail price. This would be strange, but not necessarily fishy, if the markups were consistent across beer brands, but they’re not. With few exceptions, the markups apply exclusively to brands produced by Molson-Coors, AB InBev and Sapporo. Those are the three foreign-owned mega-breweries who own The Beer Store and have a virtual monopoly on beer sales in Ontario.

The issue came to light last month, when the Canadian Restaurants and Foodservices Association raised the price discrepancy to members of Ontario’s Standing Committee on Finance and Economic Affairs. The CFRA is determined to keep raising the issue until they get a satisfactory answer. So far, there’s been no answer at all. “CRFA has never been offered an explanation for why the owners of The Beer Store decided to charge Ontario licensees more than the general public for their products,” says Jamie Rilett, vice president of CFRA Ontario.

For its part, The Beer Store pleads ignorance. “We have absolutely nothing to do with prices,” says president Ted Moroz. Rather, individual brewers set their prices through the LCBO, and The Beer Store is notified of price changes on a week-to-week basis. In fact, Moroz claims that he first realized the discrepancy was so large when the issue was raised by the writer of this article. “I was surprised,” he says. “I didn’t realize the prices were so much different for home consumers.”

Read the rest of this story over on Toronto Life‘s website, where it was originally published on Fabruary 18, 2014…

 

2 Comments

Filed under The Politics of Drinking

2 responses to “The foreign brewers who own The Beer Store may be price-gouging Ontario bar and restaurant owners

  1. Mike

    I guess the same question could be asked of restaurants. Why is that you are paying $45 for a case of beer then charging $6 a bottle? Making a hundred dollars in profit seems a bit greedy. If your answer as a bar owner is something like “Hey, I have a business to run here I need to make some money!” Then why is it that you think breweries should be any different? The beer store doesn’t set prices on beer, and delivers beer directly to the bar/restaurants back door. How much does this service cost the business owner you ask, 0 dollars. So it’s probably safe to say some parts of that cost are accounted in the box that shows up to their door. Is the beer store perfect by any means? No. But it is far from the biggest problem we have on this earth today.

    • Ben

      Hi Mike,

      I think people understand and accept the restaurant markup since you’re paying for an experience. You go out for a beer for a reason, and that’s what makes it different than staying in with a six pack, similar to the way people might be OK with paying more for food that is much more expensive than its component groceries.

      Furthermore, the “delivery is built in” argument would fly if all beer was marked up the same way, but it’s not, It’s just the big guys.

      Lastly, I don’t think, nor did I state, that this is the “biggest problem we have on this earth today.”

      The biggest problem on earth continues to be the fact that people keep putting Kevin O’Leary on television.

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