A Word of Advice To The People Of Ontario… 13

The question, as always, is “do you believe they’ll do it?”

The idea of beer in grocery stores is presently transitory. It exists only in an article in Martin Regg Cohn’s column in the Toronto Star. His word, although convincing and no doubt backed by leaks from the provincial government, is impermanent. At this point, beer in grocery stores exists only as an idea.

It is a good idea.

When Brewer’s Warehousing was started after prohibition, the main idea was to take the onus off the provinicial government. They wanted control, but could not afford the warehousing that went with storage and transportation of beer. Originally, Brewer’s Warehousing was a co-op between the brewers of the province. They worked together to have their products spread out as far as the individual breweries deigned fit.

The 20th century, both here and in America saw consolidation in breweries. The part unique to Canada was that the organization was government sanctioned. It ended up eventually with a small number of foreign owned corporations in control of a system that was meant to benefit small, local business. Currently, The Beer Store does not do the thing it was designed for. That enough is reason to seek reform.

It is inequitable. It is perverse: It perverts the intent of fair dealing that was established by the government in 1927.

It is unlikely that you will see the small brewers of this province come out in their own support in the coming days. They are terrified of the punishment that may be exacted against them. They deal with a system in The Beer Store that will gladly cut them down at any sign of trouble. They depend on the goodwill of their competitors at the moment for their existence. In what world is that a fair deal?

The Ontario Brewers, whether they be members of the Ontario Craft Brewers or not, are subject to poor circumstances. They may sell their product at their own brewery, of course, but further afield they run into difficulty. The LCBO is not obligated to take their product, and frankly, were they obligated so to do, they do not possess the shelf space to accommodate. The Beer Store requires that small brewers pay an organization owned by their largest competitors for the privilege of wholly inadequate representation. Even if everyone foolishly wished to do business with their largest competitors there would not be shelf space. It is an anachronistic model, outdated now by decades.

The difficulty is simply this: There must be change.

At last count, there are 233 breweries extant and in planning in Ontario and no room for them. In every county, maybe in every town, there will soon be a craft brewery. Mind you that the quality of the beer may vary from county to county, but I am not speaking to you as a critic. I speak only of the pride in geographical place that brewery may offer you. It is an additional institution in your community of which to be proud. It will provide business and tourism, employment and philanthropy to your community. It has been so in the United States for decades and in Europe for centuries.

I see legitimate complaint about the idea of beer sales through grocery stores. At most recent hearing, the information is that there will be 300 licenses auctioned off to large grocery stores. Naysayers are of the opinion such action will favour the large brewers. Personally, I believe them shortsighted. Were you to find yourself in America today in a grocery store in even the smallest town you would find craft beer. In Chattauqua County, New York, the Southern Tier Brewing Company brewed a beer that came second only to Busch on local shelves. In Anniston, Alabama, on the shelves of the Piggly Wiggly, you’ll find craft beer. In Utah, though it be only 4% alcohol, you will find small, local breweries on grocery store shelves.

The addition of grocery stores to the market will create hundreds of thousands of feet of shelf space in which craft brewers are adequately represented. For perhaps the first time in a hundred years in a non-governmentally sanctioned space, consumers will be able to view the product they are buying with their own eyes.

It is not an action without its problems: Larger craft brewers will dominate. Mill Street and Steam Whistle, Muskoka and Nickel Brook (once its expansion is complete) will take the majority of the craft beer space. This is simply a question of scale. Smaller brewers may not have the ability to compete immediately. This is an opportunity for the strong. If ever there were a tailfeather with which to attract investment, this is it. The craft sector will see expansion if the rumoured legislation is tabled and approved.

I worry about the smallest brewers: Those only now starting up. After all, had things gone only slightly differently, I could have been one of them.

Currently before the Ontario legislature (having passed its second reading) is Bill 67. Raised by Todd Smith, MPP for Belleville, it would see Ontario breweries enjoy cross sales. That is to say that the smallest breweries would be able to help each other along by offering the sales of each other’s products in their own stores. It costs taxpayers nothing and allows for growth and expansion in the parts of the market that are most helped by incremental improvement. It will serve the consumer with additional selection at little or no additional cost. It will help the small brewers immensely in the short term. To fail to lend them your support will simply strangle industry in its cradle and rob your community of employment and tax revenue.

As citizens of Ontario, it is in your interest to forget the question of whether grocery store sales are the best step forward in terms of consumer consumption. At this point ANY step forward is positive and the status quo will kill jobs. 233 businesses hang in the balance and in that number exist thousands of jobs that cannot be challenged by automation or outsourcing. Each of these breweries houses an entrepreneur who is doing his or her damnedest to provide you with a quality product. In a province where businesses like Blackberry and Heinz lay off employees to the detriment of the towns they exist in, it is ridiculous not to to support your local brewery. Your local brewery will provide a partner in your community for the long term in a way that the large brewers that own The Beer Store simply cannot.

I will ask you only this: to bet on the future of Ontario. Support beer in grocery stores and support Bill 67. Do not wait to see whether the government will do it. You employ them. Make them do it.

Leave a Reply to Al Cancel reply

13 thoughts on “A Word of Advice To The People Of Ontario…

  • Greg

    I wonder if these changes with grocery stores did happen they could help the little guy sort of in an indirect way. Because like you said the LCBO doesn’t have the shelf space to accommodate everyone. But maybe some of the bigger Ontario brewers might not need as much of that shelf space any more. Say Lug Tread or Amsterdam Blonde or steam whistle is available at a bunch of groceries stores (and it is easy for the breweries to get it from their facilities to the stores) then maybe they don’t need to have a ton of it in every LCBO. And maybe in turn the space they once occupied can go either to the smaller brewers or to say some of the less popular products from guys like Beau’s or Amsterdam.

  • Bryan

    The biggest issue I see with the grocery store system is that it doesn’t do anything for small Ontario brewers unless it also comes with changes to distribution. If the small brewers still have to get their products to the grocery stores vai existing channels (LCBO/TBS) than no meaningful progress has been made – TBS will still be free to throw non-competitive roadblocks in the way of small brewers, and the LCBO will continue to be a slow-to-approval with difficult to comply with labelling rules monster.

    • admin Post author

      And that’s why Bill 67 is so important. It allows for additional shelf space through other brewers and is excluded by traditional distribution channels.

  • Chris

    I can see the shelves right now at Loblaws. Coors Light, Bud Light, etc… Pathetic. I won’t be putting away my home brewing equipment anytime soon.

    • admin Post author

      That’s how they win. That is how they have always won. Because people who claim to be interested in a better beer market cede the game immediately through pessimism and cynicism. This has not even started yet and you have ceded it to the big brewers. Is it any wonder this has taken thirty years to achieve any manner of reform?

      • Greg

        Plus I don’t even see it going down exactly like that. I mean look at other items in the grocery store. Grocery stores carry cheap ice cream, but they also carry Ben and Jerry’s. They carry ground beef, but they also carry more expensive cuts of steak. Why wouldn’t beer be the same way?

        Plus even if it wasn’t you can probably assume that the sales of beer wouldn’t drastically increase. At the same time A-B would want to put Bud Light in every possible store. When means at any given time, any given LCBO would have less Bud Light taking up shelf space. Which means more room for other products.

      • Phil

        Absolutely correct. The “It’ll never happen,” attitude is rampant amongst Ontario beer drinkers and yet the interest and buzz about beer and craft brewing has never been greater. Weird juxtaposition.

  • Liam Mckenna

    Will the grocery stores charge listing fees, shelf premiums, etc. like they do currently for most products? Access to markets for any small domestic producer of anything is often problematic. In Ontario, access to market for small brewers happens through self distribution, your own retail store or LCBO/BRI. Hardly the freedom to access to markets experienced by most brewers in this world. WTO challenge anyone?

    • admin Post author

      Oh, they will almost certainly charge listing fees. The difference is that instead of paying a listing fee and having your product moulder in some dark corner of a TBS back room, it will be on the shelves where people can see it. Brewers will have the option of paying for shelf space with better visibility. Anywhere in North America, you’re likely to have to pay for shelf space. This is simply better shelf space in terms of moving your product.

  • Al

    I would be quite hopeful that higher end stores like Whole Foods, fancy Longos and Loblaws locations would actually want to have good beer to compliment the high end food experience. Food Basics will only stock 1 L cans of Laker Strong.

    • admin Post author

      People are bizarrely skeptical, especially when you consider that Longo’s actually has craft beer bars in a few locations now.

      • Greg

        In Ottawa, the grocery store farm boy sells Ontario made cheese that is washed with Beau’s beer. They advertise this product quite a bit. You would have to think if they could sell beer they would be selling the beer that went with that cheese and probably not Bud Light.