The new Bellwoods Brewery might not have a bottle shop

A couple weeks ago Toronto’s Bellwoods Brewery officially announced their intention to open a second brewery on the corner of Dovercourt and Dupont. I likewise provided further details in my signature “hey-I-already-knew-about-it-because-I’m-cooler-than-you” style in a post for blogTO and the response on the interwebs was nothing short of ecstatic as twitter exploded with well-wishes and excitement about a new place for craft beer fans to get Bellwoods’ delicious beer (even the goddamn blogTO comments section was all positivity for once).

The news is clearly awesome, but there’s a bad news element to the situation that I opted to leave out of my original article in order to help ensure that the Bellwoods folks received only much-deserved optimism and happiness about their expansion. Well, the time for happiness has passed and, as is often the case when it comes to the brewing industry in Ontario, the time for rage is upon us.

The new space might not be allowed to have a retail store.

Here’s why: Currently, in order to have two retail stores in Ontario, the AGCO requires breweries to brew a certain amount of beer and, even when their new facility reaches maximum production, Bellwoods won’t even be close to that limit.

Specifically the law says that a brewery may operate one retail store onsite at their brewery no matter how much beer they make. That store may only sell products made at that brewery.

A brewery that opts to expand and open a second location is allowed to have a second store at that location, and that second location only has to make 50% of what it sells at that location, but you can only open a second store if you make over 25,000 hectolitres of beer annually.

To give you an idea of how much beer that is, Bellwoods currently makes about 2500 hecs. The new site will start by making 8,000 and will eventually ramp up to 15,000 hecs, and so even when they’re at maximum capacity they’ll still be well short of the threshold for a second bottle shop.

In my blogTO article, I alluded to the fact that owners Mike Clark and Luke Pestl are currently ironing out some details in relation to their new facility and, this, as you can imagine, is most certainly the biggest of those details.

When I talked to Clark on the phone about it, he was clearly irked.

“It’s going to be a really interesting brewery and people are going to want to tour it, but [unless the rules change], at the end of the tour I’m going to have to tell people they can’t buy any of our beer,” he says.

Clark is working hard to get someone to step up and review the current laws and tells me he has already met with Han Dong, the MPP for Trinity-Spadina where the current Bellwoods Brewery is, and has plans to meet with Christina Martins, the MPP for Davenport where the new brewery will be. He says that in initial talks both Members have been receptive.

However, anyone familiar with Ontario’s wacky liquor laws can probably take a guess about the probability of this issue being resolved overnight. The difficulty Bellwoods is facing growing their business is of course just another example of the many ways this province’s current alcohol legislation is making life hard for small brewers.

But it is perhaps all the more frustrating given that Clark and other small brewers recently identified this very rule as something that should be changed when the province recently asked for feedback regarding our liquor laws. An initiative was recently undertaken by the Ontario government to review and modernize the province’s currently archaic liquor legislation and the province actively solicited advice and feedback from stakeholders, but dealing with this issue, one about which small brewers involved in the consultation process discussed extensively, was ultimately put off until an undisclosed future date for consideration.

[If you want to read more about the modernization efforts, a summary of the consultation that took place for the Regulatory Modernization in Ontario’s Beverage Alcohol Industry is available online. Fun game: See if you can identify the angry small brewers who are anonymously quoted!]

“The 25,000 hec rule is crazy,” Clark says. “And everyone realizes it’s crazy. There’s no single piece of paper at the AGCO that can explain the 25,000 hectolitre rule. I’ve been told that they think it’s some kind of hangover from wine legislation.”

And if your bullshit detector just went off the charts, you’re not alone. It seems clear to me that, as is sadly so often the case in this province, this legislation seems to exist largely to benefit larger breweries and the owners of the province’s only private retail beer distributor, The Beer Store.

By making the threshold for a second store an arbitrarily high amount of beer production, this weird rule ostensibly hamstrings small brewers and ensures that there is very little competition for bigger and mid-sized breweries.  And, when you consider that the province supports small brewery growth with grant programs and supports the Niagara College Brewmaster’s Program, and also generally champions a diverse, dynamic business climate in Ontario that supports small manufacturing, it’s frustrating to a put-your-own-head-through-drywall degree that this obvious barrier to small brewers is allowed to stand.

Unless there is some change to legislation before their new brewery opens, Clark and Pestl’s options will be to either miss out on having a store onsite there—which is crazy since they’ll have the majority of their brewing capacity there along with their bottler—or they’ll be forced to close the bottle shop at their existing Ossington location—news that is sure to cause rioting in the street among the west end’s beer fans who already buy up all the beer Bellwoods is able to bottle.

As the debate about the province’s retail alcohol industry rages on, I’m increasingly aware that there are no easy answers. But as we talk about the merits of the LCBO, privatization, and ending the Beer Store monopoly, this rule has always stood out for me as a clear (and seemingly easy) way to make at least some positive changes for Ontario’s craft brewers. By lowering or waiving the necessity to make 25,000 hectolitres of beer in order to open a second retail store, we’d likely see a lot more breweries opening second locations and, as a result,we’d have a lot more places to buy local beer directly from the people that make it–not to mention a slew of new jobs, increased economic development in the province, and new venues in Ontario that might be considered tourist destinations.

Accordingly, Bellwoods’ battle to open a second store likely won’t be an easy one, but here’s hoping they persevere. If they can open a second bottle shop and set a precedent that allows other small brewers do the same it could very well be the first, long overdue improvement to our retail beer scene–and hopefully not the last.