The Beer Store - What's next?

 

 The Beer Store.

  Iconic Ontario beer retailer that has been around for almost 100 years and it seems that time is drawing nigh for its near monopoly (80%) on beer sales in this province. While the politics behind the recent legislation in Ontario do cause me considerable pause, I wanted to talk about the actual beer problem we have here as opposed to getting weighed down by my personal loathing of our current government. Not to ignore their bread and circuses policy announcements but I am intrigued by what happens either now or in the future when the beer market finally opens up and we see what competition can deliver to Ontarians. 
  First off, a little primer for folks who don't know much about The Beer Store and it's ownership profile. Many think it is like our LCBO, owned and operated by the government with the profit returning to taxpayers fully but indeed it is a mostly (99.8%) foreign owned entity, controlled by Molson-Coors (50.9%), AB-InBev (44.9%) and Sapporo (4.2%) with a sprinkling of almost 30 other brewers from Ontario holding minor stakes. Delivery and distribution is a hallmark of The Beer Store as well as a world class recycling program for all alcohol bottles and cans sold here, saving tens of millions of dollars in tax revenue by dealing with the material instead of local municipalities. Well over 7000 people are employed at this (kind of) not-for-profit organization and while it is true many of the positions are part time, the full time union jobs are well paid and with good benefits.

  The monopoly on full case (12/24) sales outside of the actual breweries is but one way the stranglehold of most beer sales in Ontario has been established. Price breaks on larger package purchases encourages consumers to shop for their 24's here as opposed to the LCBO or grocery stores. The mandate of beer neutrality is supposed to help alleviate concerns of smaller brewers about the macro producers dominant position of ownership and from personal, albeit anecdotal, experience, I have found most Beer Store employees to be a good resource when I had questions about something new. Like any retail setting, including craft beer taprooms and the LCBO, some people are just punching a clock for a paycheque and others are passionate about what they are selling.
  The potential loss of jobs is certainly a large concern, especially for the people I have come to know as friends who work at The Beer Store. Opening up sales at convenience stores is more likely to impact grocery store 6 packs but if they are allowed to sell 12 and 24 packs or have any control over pricing for sales (now controlled through the LCBO), that could change. Whether legislation forces a minimum craft allocation at each convenience store will be interesting to watch but we can hope that some enterprising owners will seize the opportunity and perhaps some of them will see that carrying a wider assortment of craft is good for business. The more likely scenario is the heavy macro sellers (Coors Light, Bud, Canadian, et all) will continue to dominate as an easy pickup when the fridge runs low or you are on your way to party, late and in a hurry.
  The potential for Craft Beer focused stores like in Quebec or some of the other provinces that operate much differently than we do here is a big plus for many of the people I know. Access to more craft breweries from around the country and the world is considered the end game of any monopoly break up and while the Ontario Craft Brewers Association supports the legislation itself, it is difficult to see them laying out capital to build or own actual locations. Representing less than 30% of craft brewers in the province diminishes their voice a bit but that could change if they begin to offer more access and continue to lobby the government to create looser rules regarding stores, cross selling between breweries and the like. Being able to get a better selection just from around Ontario would be a huge plus, with more than 300+ brick and mortar breweries to choose from as well as even more doing the contract brewing thing.
  I'm sure the logistics of setting up such a venture would be mind-boggling and expensive and despite my best hopes, I know not everyone would satisfied. The majority of beer drinkers will continue to drink their macro lagers and purchase their 24s each week or so with no hesitation save a sale or giveaway included with purchase. I know this because only 4 years ago I was that guy who's brand loyalty was to whomever would be cheapest or had the coolest thing inside my case to offset a higher price point. I know as well that most craft beer drinkers tend to look for what's new and buy in smaller quantities outside of their own personal favourites that they like to have on hand all the time. Selection, freshness and a knowledgeable staff would be a seriously amazing thing if we can dream. And while I understand the nervous and not altogether unfounded fears of what will happen next, change is coming and we need to look at what we can do with an eye to creating good jobs, better access to great beer and the end to a system that has it's roots at the end of Prohibition. It's time we grew up and took off the chains of the protestant forefathers that ruled Ontario in the 1920s and beyond, we aren't children anymore.

  I have no desire to see anyone lose their job but at the same time, the world is a much different place than when this system was set up. The explosive growth of craft beer, spirits, wine and cider demands a new approach to the distribution and selling of alcohol in Ontario. The old ways must be examined, what worked can be integrated into the new system but in a humane and most Canadian way. Working within the framework of existing contracts with an eye to a modern approach to having greater and more convenient access to our favourite beverages is nothing to be done off the cuff, it behooves us to make sure the protections are in place to ensure minors and people who struggle with addiction are not left out of the equation. Craft beer focused stores may be the end game, how we get their will determine just how successful they can be.
Just my 2 cents, my personal habits are unlikely to change unless we see a radical shift in who sells what and where. I am cautiously optimistic but hope this conversation isn't used as cover for what has become a dangerously unprogressive government when it comes to important social issues. Do they have the mandate to break a legal contract 6 years before it expires? Is it really about beer? Those questions will have to wait for another post on another day, I'm pretty sure it's beer time now.


Cheers!
Polk