In case you are unaware–or you’re like me and were drinking copious amounts of great American craft beer at the annual Craft Brewers Conference in Portland when it happened–last week the province announced some proposed changes to the way beer is sold in Ontario.
Mostly contained in an announcement wherein Premier Kathleen Wynne confirmed that we’d be seeing beer sold in grocery stores (if the Liberal budget is passed, which it will since they have a majority), the full details of the proposed changes were outlined in the report Striking the Right Balance: Modernizing Beer Retailing and Distribution in Ontario.
Given my Portland sojourn, I’m admittedly a little late to the party analyzing the impact of these possible changes, but better late than never.
If you’re interested, Canadian Beer News has a great round up of the various reactions to the report in the major dailies and some blogs. I recommend Dan Grant‘s post for NOW Magazine for some reaction from brewers and Jordan St. John published an interesting post in which he takes a look at how we got here (and gets a terrific visit from a trolling Beer Store employee in the comments section for his efforts!)
In considering the report and its impact, I opted to approach the issue as I do most other things: I cracked a beer and first read what every one else was saying–but then I decided to take a critical look at each of the proposed major changes individually.
Here’s why I think the proposed changes are good, why they might be bad, and why they have me asking “wtf?”
1. Ontario is expanding beer sales to up to an additional 450 grocery stores across the province.
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450 grocery stores are now going to carry beer, saving you a trip and offering you more convenience. |
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There are more than 450 supermarkets in Ontario. Who will decide which ones get beer? Supermarkets already operate on a system whereby retailers pay for shelf space. Is the AGCO going to begin enforcing illegal incentivizing of beer sales that already runs rampant in bars? |
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There is no timeline for this plan, except that we’ll start with 150 stores sometime in the next two years. |
2. The province’s beer scene will no longer be largely controlled by a foreign-owned monopoly.
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The days of The Beer Store being the place where 80% of Ontario’s beer is purchased are clearly over. Consumers will now have choice about where to buy beer and we’ll have an as-yet-unnamed “beer ombusdman” to hear our complaints about the system. |
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Control is largely being handed over to “a complex, multi-channel, many-tiered beast, overseen by Queen’s Park.” What could possibly go wrong? Especially with an as-yet-unnamed “beer ombusdman” here to hear our complaints.Oh yeah, and the Beer Store didn’t actually go anywhere. They’re still here, too. |
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An as-yet-unnamed “beer ombusdman” will be here to hear our complaints. |
3. 20% of shelf space in The Beer Store and grocery stores will be dedicated to small brewers.
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Hopefully dedicating a set amount of space to small brewers will mean that grocery stores aren’t just another place to buy tasteless industrial lagers and there will be real selection. |
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20%? I’m no mathemagician, but I think that leaves 80% of the shelves for big companies based out of the country to continue to peddle their watery wares. Why not 50/50 to really support local beer, local jobs, and local manufacturing? |
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I first heard this as 20% will go to “craft brewers” and thought we were opening up one of the oldest, most annoying arguments in beer. It turns out the report actually acknowledges that “Not all small brewers produce craft beer, nor are all craft brewers small.” Well said. I dig it. |
4. Beer sold in grocery stores will be prohibited from including inducements or monies from suppliers.
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That’s great. Brewers with money shouldn’t be able to buy their way into markets and prevent little guys from having a level playing field. |
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The Liquor License Act already pretty clearly prohibits this and yet it happens every single day in bars across the province. How will this be enforced? |
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Grocery stores already exist on a “pay for shelf space” model. Big brewers allow sales reps huge budgets to improve their brands’ retail presence. How is this possibly going to be enforced? Will the beer ombudsman be armed? |
5. Ontario is entering into a new Beer Framework Agreement with the owners of The Beer Store that will open up ownership to small brewers.
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Diluting the ownership of the Beer Store monopoly seems like a good way to ensure that the massive retailer doesn’t just represent its owners interests. |
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This, taken directly from page 19 of the report which makes clear these changes will be symbolic at best: “Based on current market shares in TBS, Molson and Labatt will continue to elect a majority of the board.” |
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Didn’t they already do that? Remember when we mocked it until our throats were hoarse? |
6. The Beer Store will generate an additional $100 million a year in revenues for the province, phased in over four years.
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Extracting money from the Beer Store is a good thing. We live in a province that requires money. This stirs some up. |
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The money is being generated by adding a $1 tax on all 2-4s, not necessarily taking from the Beer Store’s profits and, in all likelihood, just increasing the cost of beer eventually. |
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The plan also notes that beer pricing between the Beer Store, LCBO, and grocery stores will be “uniform.” We’ll see none of the real benefits of actual competition since they’ll all be required to charge the same amount for beer. |
7. The industry’s largest brewers have separately committed to comply with the government’s request that they cap price increases to inflation for some of their most popular beer products until May 2017.
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Molson and Labatt can’t simply pass the cost of the above mentioned $1 tax onto consumers until May 2017. |
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May 2017 isn’t “never.” |
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This change is basically just an admission that consumers will start paying the above-mentioned $100 million in increased revenues in 2017. The government is extracting more money alright. From your pocket, bro. |
8. The government is ordering The Beer Store to improve the experience of its customers and TBS has committed $100-million to modernizing the retail experience.
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The Beer Store shopping experience is profoundly shitty and has been roundly mocked on this blog and elsewhere. Any improvements to dusty wall of labels and conveyor belt ambiance would be a plus. |
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It’s still the Beer Store. A $100 million silk hat a on a pig doesn’t make that sow the prom queen. Besides, I don’t really skip TBS because of the infamous wall of little labels, I skip it because it doesn’t provide a fair market to independent brewers. Being able to see the beer they stock won’t change my mind about that. |
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This is at least the third retail makeover for Brewers Retail Inc. At some point you just need to admit you’re ugly and be OK with it. Like your cousin. |
9. The LCBO will start selling growlers.
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Growlers are pretty cool, I guess. |
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Growlers are mostly cool as a thing to fill up directly at the brewery and retain to be filled again. Buying a full growler at the LCBO just means you have a big thing to lug home and you pretty much have to drink it all a few days after buying it. |
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Are there going to be fill stations at the LCBO now? Is the LCBO getting into draught beer or are there going to be chunky bottles crowding already crowded shelf space? |
10.Small restaurants and bars will be able to buy beer from TBS at the same retail prices as consumers.
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TBS’ owners will no longer be able to gouge restaurant and bar owners who opt to provide patrons with brands like Canadian and Blue, which traditionally have been sold to licensees at a higher rate for no reason. |
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I really don’t care about a small bar that stocks copious amounts of Labatt Blue. When craft beer is literally cheaper to buy to provide your customers, why are you still serving Labatt fucking Blue? Also, current legislation dictates that licensees have to buy their beer from the The Beer Store. Beer will be in the LCBO and gorcery stores, but licencees are still legally obligated to buy from the store owned by three foreign companies? |
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Why is this discount only afforded to “small” restaurants? The way the change is written, just under half of all licensees won’t enjoy a change in pricing, probably the half that are big businesses hawking bottles of lager to customers. TBS is welcome to keep gouging franchises and bigger restaurants? Cool. |
11. Small and mid-size brewers will see the price of listing products at The Beer Store fall by about 5% to 10%
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Less overhead for small brewers is a good thing. Proposed reductions mean small brewers won’t be paying TBS employee pension obligations. Small guys have thinner margins and paying less to get in the door where most people in the province buy beer is a good thing. |
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Paying 10% less to the biggest brewers in the world just to sell your products in the store they are allowed to own is small consolation when you’re still not allowed to own your own store yourself. Paying your pimp 10% less probably doesn’t make you feel like less of a ho. |
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If your brewery gets big enough, and you want to sell beer at The Beer Store, you will get bumped into a category that requires you to pay into the pensions of the employees working in a store owned by AB InBev and Molson Coors even though the dude manning your onsite brewery retail store probably does not have any pension at all. |
12. The LCBO will conduct a 10-store pilot study to explore the viability of offering 12-packs with an option to expand to 60 stores
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Pilots are fun…? |
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This is going nowhere. Could this be more couched in non-specific language? A 10 day pilot to explore viability? *fart noise* |
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There is already limited shelf space in the LCBO for beer. Where exactly are these 12 packs going to go? Next to all the growlers? Out in the parking lot? |
13. The Alcohol and Gaming Commission of Ontario (AGCO) will allow brewers with two production facilities to have an on-site retail store at each facility for the sale of their products only, regardless of the production size of their facilities.
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This one is just plain good. If you have two working breweries, you should be able to sell beer at both of them. This helps out Toronto’s Bellwoods Brewery and Ottawa’s Beyond The Pale, and any other brewery entertaining the idea of a second brewery in order to meet demand. Good recommendation. |
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I see no downside to this. |
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Why did this insane rule ever exist in the first place? |
Conclusion
This may come as a surprise given that I found something to complain about for virtually all the major points listed above, but overall I think these are good proposed change. It’s definitely not perfect and given the province’s history with alcohol legislation you could be forgiven for approaching these announced changes with a healthy dose of cynicism, but let’s be honest: this is at least something.
As the report itself states, this is the biggest change in beer distribution in Ontario since prohibition. Indeed, this is probably the first big change to the way beer is sold in Ontario that most readers of this blog will have ever seen in their lifetimes. So yes, it’s fun to piss all over every new announcement related to beer that is unveiled (hey, I’m often pisser number one!) but let’s not fail to give credit where it’s due. I’m not going to weigh in on the sale of Ontario Hydro, which many critics are claiming is linked to the beer announcement as a means to distract us, but I think Premier Kathleen Wynne deserves a lot of credit for even attempting to take on the issue of alcohol distribution in this province. It’s a messy topic with so much baggage to opine that it has arguably given birth to an entire cottage industry of ranty bloggers and media pundits. That a sitting politician opted to wade into the muck and do something–anything–ought not be ignored.
And yes, of course there is weirdness here.
Politicians have more interests to consider than just people who make and drink craft beer (Thankfully: We need roads and healthcare and stuff, too), so no change is going to be perfect to everyone–certainly not at first.
But this change undeniably means craft beer will be in front of more Ontario consumers, making it harder for them to ignore it, and as anyone who has been converted to interesting beer can attest, once you start drinking well-made beer made by independent companies, it’s hard to go back to the industrial lagers. So yes, there’s some “wtf” elements to these changes, but the more the craft beer market share grows, the more conversations we’ll have about improving the way beer is made and sold here. And that’s a good thing.
And until then, the “wtf” gives us something to blog about.
Ben's Beer Blog 
Gold: “Paying your pimp 10% less probably doesn’t make you feel like less of a ho.”
Agreed on conclusion. Hopefully these changes induce more changes after people realize that 7 horsemen never arrive. Also, great to see so much public support for change.
When I’m ombudsman, I’m carrying a naval cutlass.
Jordan St. John for Ombudsman. Aaarrr!
To #4, I can’t see how the province could treat listing/shelving fess at the grocery store differently than listing fees at the Beer Store. I can only assume it means they can’t take additional money, which as you note, is meaningless unless enforcement will be much much more thorough than it is with bars.
To #10, Castro’s is outside of the “small” definition. A bar with a license for 50 people…. But 250 24s per year is nothing. The people who will benefit are those random little mom and pop burger joints from the 70s with sings that proudly say “LLBO” in text as big, or bigger, than their name, and that display a couple of dusty bottles by the till, generally for blue, coors light, and something randomly old, like OV. Who probably sell 10-12 beers per month.
I also disagree on your conclusion, not based on the weighing of pros/cons, but simply because nothing has changed in terms of how the government treats beer. So many “changes” that still centralize control, add layers of bureaucracy, and worst of all, treat beer like it’s a horrible dangerous thing. Nothing has been liberalized, the rich and wealthy still get handjobs from the Liberals and real change for small brewers is negligible. What if none of them want to take advantage of the 20% space because they just don’t want to pay the fees required? Or can’t? Or can’t fill the minimum orders the grocery stores require? Will we just see two brands that fit the “small” definition, each getting 10% of the shelf?
Overall, this news is more than disappointing. It sucks balls.
Forgive all the typos and things like “rich and wealthy”. I’m used to being able to edit things…..
Funny to read these comments and articles to suggest ‘giving more space’ to craft breweries. You understand that it’s a business right? And that there isn’t an industry in the world where a company is ‘owed’ shelf space. You can’t talk out of both sides of your mouth, complaining that the big beer companies are (perceived by you) to be getting a fixed market, and come with a solution which is to explicitly fix the market for companies you support (who for the most part have only existed for 2-10 years, and might employ 15-20 people tops).
No government anywhere in the world is going to work to eliminate major companies who employ thousands of people, and who pay billions of dollars in taxes (direct, indirect, excise, payroll) to prop up businesses that would fold instantly the second they had to carry the provincal tax burden.
“The Fix Is In” comment hit it right on the money. Why should any type of product be allotted shelf space? You will get shelf space if people want your product. If they don’t, too bad. That’s how the market works.
On Wed, Apr 22, 2015 at 9:51 PM, Ben's Beer Blog
I always kind of liked The Beer Store shopping experience. You go in, everything is on the wall, it’s easy to compare, you can see the price easily, and it doesn’t take a long time. There’s never really long lineups and I love it when the beer comes sliding out on the conveyor belt. It’s like you are getting a present!
Why is it better to have to walk around the store and search for what they actually have. It’s like when you go to the mall and can’t find a map of the layout that tells you where all the stores are. Because they want you to walk around and get sucked into buying more than you want to, from places you never planned to go to. The Beer Store gives you the map right up front! I love it.
So, for me, I wish every store had a shopping experience like The Beer Store.
Lol
#1 – which 450 stores? HELLO? Liberal Friends that’s who!
I don’t think I will stop homebrewing by 2017. I have no rules and regulations for beer in my house. That is what the Liberals should of done, like get the hell out of it all, collect your sin taxes and walk away.
Why should licensees pay more than retail cost? The majority of businesses offer a volume discount. I guess when you can monopolize a product that it is not necessary to offer such. The gov’t has no incentive to change it because they make more tax money on the original purchase and then again on the resale.
Why should licensees pay more? Because they mark up the cost by a minimum of 100%, before selling it.
The $44 licensees pay for a 24 works out to $1.85 a bottle… but the minimum you’ll see them sell a bottle for is $3.75 (with some gouging to as much as $5).
Bars dont get to buy 24’s at the discount price (often $34 – or $1.41 a bottle) because those savings would NEVER get passed on to the actual drinker. Breweries discount to give drinkers a break on the cost, not to stuff $10’s down the g-string of bar owners…
There are also the administration costs pertaining to their liquor license. A database is maintained to make sure the license is valid, and the account is in good standing.
A few things that I noticed in reading the report that aren’t addressed here:
1 – the supermarkets that win their licences will only be allowed to sell 6-packs or smaller. This cuts both ways IMO, we’d like the convenience of bigger packs, but TBH even as a craft beer lover there aren’t that many craft beers I would want to buy more than 6 of at a time, so many seem expressly designed to be “curiosity” or “headcracker” beers. Clearly this and the LCBO 10-store “pilot” reflect TBS’ keen desire to preserve as much as possible of the sweetheart previous MOU on the lucrative 2-4 trade.
2 – supermarkets will have their sales volume restricted to an average of $1M per location. I haven’t done a lot of thinking about the mathematics here, but that does seem a curious proviso to me, probably a “give” to TBS
3 – supermarkets will also have hour restrictions on sales (I assume TBA). We probably still won’t be able to grab a 6-pack at 11 PM on the way home from wherever. No big deal but a missed opportunity.
I also think we shouldn’t get too fixated on the 20%, which will (a) be a minimum and (b) is WAY more than fair considering market share. We should always bear in mind that, sad as it may seem, the vast majority of beer drinkers would be happy with a Beer Store that only sold 5 brands of beer. When small brewers start nearing 20% penetration the conversation can begin anew. In the meantime there would be a real possibility of a lot of craft beer bottles actually going past sell-by dates in a Beer Store.
My hope is that the supermarkets see craft as a key way to differentiate v TBS.
There is lots of Craft Beer I buy by the case. Do you want to pay $55.00 for a 24 at a grocery or $46.50 at the Beer Store? I still say it will be quicker to go to the Beer Store than Loblaws. What did we gain? Nothing.
Hungry Steve and Chris. The best part of the Liberal’s proposal for fans of TBS is that the Beer Store does not change or go away. You still get to buy your beer there. If you are doing a grocery shop, you will now be able to grab a six pack too if you want. Nothing really to complain about, is there?
As for the price of beer; Hey, nobody behind you with a pointy stick making you buy what you don’t want. Again, you are still winning. You won’t be able to by a 2-4 at the grocery store anyway. So hit TBS as usual for your case and carry on fellas.
The Fix is in. You have it right that in a free market, where competition is encouraged to thrive no company is owed a thing. Currently in Ontario grocery stores sell their shelf space to the highest bidder. Free market competition at its best. If a small company wants to compete with the larger companies they need to innovate and grow where they can until they can buy those shelves themselves. But that’s not how beer currently works in Ontario. The market isn’t open. The market does not define itself here. Competition does not have the influence in Ontario as it does in most other beer retail landscapes.
Craft brewers in Ontario would be ecstatic if TBS’s near monopoly was dismantled.
But Craft brewers would be almost as happy if they could legally compete on a level playing field with InBev, Molson Coors and Sapporo Sleeman. Given the opportunity to compete with the big guys, Ontario Craft Producers could see their market share grow (employing people and paying taxes) like it has in Quebec, BC, the States, and everywhere else local breweries have been allowed to thrive.
Shelving allocations are the provinces weak sauce attempt to keep TBS owners happy while not looking like they are complete pushovers.
I was with you just till the end there.
TBS is the only system in Canada where any brewer can participate from day one of operation. Day 1. No need to outspend, no need to out-market the conpetiition. There’s going to be a very sudden realization by a lot of people who were bitching, that the $15,000 they needed to spend to get a 25-store footprint at TBS won’t even get them a second glance at Loblaws or Sobeys.
I believe craft breweries would be less ecstatic once that ‘near monopoly’, and guaranteed distribution channel, was gone.
The fix is in.
Well there is a simple solution. Allow the TBS to operate as usual, and at the same time allow the free market to dictate what business models survive and which will not the old fashioned way.
Some breweries will take advantage of the TBS’s easy and cheap opportunity.
Others might open their own retail space. And who knows, some adventuresome soul (more than one even!) might open a chain of retail spaces to compete with the LCBO, Loblaws, and TBS.
It’s a crazy idea but it might just work!
Before January, I was told it was approx $64K for a craft brewer to list a SKU in every TBS store. In January, the approx $2600 initial fee was waived, and brewers get 5 free stores at $230 a pop. The full listing fee also only applied for the first 233 stores. After that, it’s discounted to around $55. Those per store rates were discounted in January, and again by 10% recently, apparently. Also, getting product in every store is something only the big two (Steam Whistle and Mill Street) bother to do. That’s a LOT of product to produce. I would hazard to guess that it’s maybe $25K to get a very very solid retail presence at TBS. If the “wall of obstruction” is a big issue, only list at self serves. Given that TBS has agreed to invest $100M over the next few years to improve things, the wall may be knocked down in a few years and every store will look like Leaside or Stockyards. I hope so. Those stores are amazing.
Craft brewers can list a 6 pack or a single tall boy SKU, and TBS will sell it as a 24 in the mother case (hopefully the mother case, and not something like a super weak Mill Street flat… ugh! 🙂 and/or put the 12 pack or 8 pack of tall boys on the shelf. TBS does not want to have to restock a product constantly. If there’s a demand for it, they will figure out creative ways to get an adequate amount of retail space for a product. TBS cares about moving volume and being efficient doing it. They don’t care who brews it, their only cut is a fee based on volume. There is most certainly not now, nor has their ever been, a mandate to impede sales of craft beer. Major label adjunct lager has a large presence because that is what the majority of people want.
Due to lower taxes for smaller producers, and TBS’s cut being based on volume alone (and 16 cents a case “sorting fee” for non standard bottles. Cans and industry standard bottles carry no added fee), craft brewers see 66-70% of the list price of beer sold at TBS. That is an insanely high margin for retail, particularly for a small producer of goods. Small producers of goods selling at WalMart in the US only see 18-30% margins. Hell, Coke and Pepsi only see 50%. It’s a really great deal for them if they have a product that’s in demand. Compare that to the US where they see smaller margins, have to hustle to get in with distributors (many of the largest are ABInBev, Molson-Coors, or SABMiller exclusive) and THEN hustle to get listed in stores. THEN they have to hustle further to not get the bottom corner of the shelf in retailers. I’d rather be a square on a wall than a single short way facing of a six pack in the bottom corner of a beer fridge. Hell, from my US experience, even stores that have a large selection of craft are basically Russian roulette for finding an old code product on their shelf. I am so used to TBS and LCBO being diligent that I forget to check! There’s a downside to thousands of beers to choose from.
Also, the big guys do NOT play nice in the US. Up here, the major brewers really want to be partners with small brewers. Down there, craft brewers get C&D letters from ABInBev’s lawyers every time they launch a new beer, if they have a big enough presence. AB sent a latter to Dogfish Head claiming ownership of the word “Punkin” once! They have to fight harder for retail space, and have to lawyer up immensely. No wonder Dogfish Head are roughly the same size as Mill Street (started in late 2002) despite starting in 1995.
I am a TBS employee staunchly in favour of craft brewer operated retail outlets, and I am not alone. Hell, I don’t think Ben asked for enough (it was Ben, right?) when he said they should be allowed one additional store and be able to cross sell. I say, they should be able to open as many outlets as they can get zoning approval for, and sell whatever beer they can list. Their own, other craft brewers, imports… hell, Canadian and Bud if they want it. TBS got to this point of being a foreign owned monolith because brewers were forced together from the start, and no one did anything about consolidation, and then foreign owners buying in. Funny how people strongly care about this now, right? Anyway, make it so there are conditions that the majority owner (at the very least, I wouldn’t be opposed to making it complete ownership interest) must be based in Ontario. New York state law states that all liquor store owners must reside within 25 miles or so (can’t find the actual number) of their retail outlet, so restrictions on ownership to discourage consolidation and corporate ownership are not without precedent. Allow brewers to form partnerships, co-ops, whatever; or open stores on their own if they so choose. Open up LCBO zoning regulations (I have read what some brewers had to go through, and it’s ridiculous. Writing letters to churches??) a little bit, but not so far as to make us Alberta where a town of 7000 has 6 liquor stores. Craft brewers should be able to try to compete with the big boys using any reasonable means at their disposal.
The problems with that are multiple, of course. Where do you make the production cutoff? Are Brick and Moosehead out or in? Who will handle the empties? Will they handle it themselves, or pay TBS to do it? Will it become part of the ODR non-refillable stream at TBS, or will they sort bottles for reuse? What does NAFTA look like for beer? Trade agreements on wine are RIDICULOUS, and the reason why they wont be in grocery stores as well until far down the road as of right now. I would hope for less red tape, but I would not bitch in the slightest if they were “forced” to carry Russian River or Lagunitas or Bell’s or New Belgium or… 🙂
The MAIN problem is that craft brewers didn’t even really mention it until very late in the process. Sure, that private member’s bill may be a way to make it happen, but it’s puzzling why the OCB didn’t make a bigger push. It’s hard to get a government to make a big change that will make things fair for you if you don’t work for it. Why didn’t they?
I want craft beer stores for selfish reasons. I no longer want to hear about how “oppressive” the system is for craft brewers even though the prosperity of the larger craft brewers who listed at TBS/LCBO early on is evidence to the contrary. I no longer want uninformed people on social media (and, hell, real accredited media) go on about listing fees and beer walls and ignore the mitigating facts of the listing fee (a one time thing, a tiny portion of brewery startup costs, listing fees far more oppressive are a fact of life in retail) and the facts about the TBS system in general (the high margins of sales to brewers, that TBS wants craft brewers listing with them to do well and always have.) I want to be able to buy every Sawdust City beer I like in one store, and have that store be in my city. I want to try beers from brewers like Highlander and Stone City that I can’t get here. I maybe want to try every US craft beer I never have time to try on my trips there. I want someone to secure a case of one of those trappist ales released by monks once a year for sale in my city (if I win a large sum of money.)
The main problem with craft beer stores is the cost of getting the rocket off the pad, so to speak. You have to build something from the ground up to gain an extra 7% of margin and have autonomy (or at the very least, not have to deal with a large multinational corporation) over the way your beer is sold. It’s worth it to me as a consumer, and I would welcome it. The question is, and maybe that’s why no one has taken the reigns on this, would it be worth it for the brewer?
Wow, this was longwinded. TL:DR What “The fix is in” was saying. 🙂
Well done man. I think I’m gonna cry a little 😉
PS.
Wow. That was…lots.
I’m going to address 3 points of yours and add a 4th. Here goes:
1. “why the OCB didn’t make a bigger push”. The OCB is a small, poorly funded lobby group who for years have been fighting for better access for their membership at the TBS and LCBO. In politics you don’t make gains by pissing people off especially when they are giants who only let you sit at the table grudgingly.
2. “The question is, and maybe that’s why no one has taken the reigns on this, would it be worth it for the brewer?”. Every brewery in the world who sells their product in a retail environment not restricted to a limited number of players answers that question for you every day.
3.”Up here, the major brewers really want to be partners with small brewers.” I’m not sure exactly what you mean by this but at face value it’s simply not true. Any “partnership” with small breweries in Ontario exist because it is illegal for them to refuse a brewery willing to pay the listing fees, and selling craft beer represents revenue. The result of the Liberals retail beer in grocery store move was achieved behind closed doors with the majors, excluded Ontario brewers, and resulted in a set of new regulations that, on the whole, does more good for TBS owners than any body else.
forget the 4th. Too much as it is.
1. I only mentioned the OCB because it’s the only organization looking out for craft brewers right now. Not only are they poorly funded, but they only count maybe 1/3 of the craft brewers among their membership. In order for craft brewers to become a force with a voice, the OCB either needs to include all the brewers currently outside their membership, or be replaced by someone who will. “Fighting for better access”? The OCB presence at TBS and LCBO is great. Mind you, moreso at the LCBO where they spend 10x the overhead of TBS and new LCBOs have walk in beer firdges (which are still somehow disappointing). Although, access IS a fight at the LCBO. They offer no guarantees, and many managers (like the ones in my town) don’t know crap about craft beer and what’s interesting to stock and how much to order. Also, they take a higher cut of sales. TBS is a guaranteed listing yielding high margins if you pay the one-time fee. At some stores, they can give your product a lot of frontage. At some dated stores like mine, it won’t be as much shelf space, as dated fixtures don’t allow for much room to cram new SKUs in. There is concerted effort to put an emphasis of Ontario craft beer, and craft breweries have the option to cherry pick stores that can offer the best visibility. Due dilligence (and waiting out the Beer Store changes as they have to reinvest $100M into stores) should be a far better avenue for them than starting a entirely new venture.
2. That’s never happening in Ontario. You have a profitable government monopoly. You have a cartel backed by giant multi-nationals. You also have organizations like MADD and CAMH holding great influence. Alberta has 175% higher impaired driving fatality rate than Ontario, and their domestic violence rates are the highest in the country. You can call those scare tactics, or boogeymen, or fear-mongering, but you have to look at a profit/loss analysis. Are increased convenience in terms of hours of sale and locations worth the potential societal costs? That’s not even account for actual costs in terms of taxpayer dollars to go from monitoring manufacturers and bars to thousands of retail outlets.
3. This is a sort of paranoia. The Beer Store’s offer of ownership stakes and seats on the board is because they want input from craft brewers and how to best retail their products. The reason they are slow to adapt is because they are giant companies not exactly in tune with grassroots movements. TBS markets itself as the ultimate source for beer. They want to be inclusive, and for everyone to do well. The thing is that it took them until 2015 to realize things like we should only charge for one slot when a company offers seasonal beers. You can’t parallel park a tank without a spotter, and TBS wants brewer input on how to market craft beers.
Couple of questions. Did this actually pass? If so, when will these new laws take effect? As a license holder I saw no changes to the prices last summer (2015) and I continued to pay more for crappy beer. Are the prices now the same for all of us? Anyone know? Thanks