St. John's Wort Beery Musings And Amusing Beers

The Ghost Tour

“Such is the uncertainty of Human Life we know not the moment we may be called off – the hand that guides this pen may ear another day be stiff and cold” – William Helliwell. April 7, 1837

These were the words of William Helliwell on finding that a maltster that he previously employed, Thomas Woodly, was burned to death in a barroom fire. William Helliwell was the brewer at Todmorden in the Don Valley and he was typically a very brave man. In 1837 in Toronto, people were acquainted with death in a way that is removed from us now. He had lost members of his family on several occasions and in 1832 lost several acquaintances to contagious disease that gripped the city. It wasn’t until the death of Thomas Woodly that he began to realize that he might not live forever; this despite surviving a truly gruesome brewing accident in 1834.

Writing history is difficult, especially if you’ve got source material like the Helliwell Diaries. It’s a biographer’s dream. There’s no need to ascribe any characteristics or intention to the man’s actions because he’s written everything down. He even copied his correspondence by hand. The level of detail is not worthy of Samuel Pepys, but William fared pretty well for a provincial lad from Upper Canada.

The difficulty, then, is in writing the other 16 chapters of your book. It’s hard not to think of William Helliwell as a character; a kind of archetypal pioneer figure slogging through knee deep mud to get to Yonge Street. But he isn’t a character. He was a man. It would be like, to take a modern example, thinking of Jim Koch as the protagonist of a Don Delillo novel. It would exploit some marvelous Jungian memetic structures and create a wonderful base for thematic exploration, but Jim’s just this guy, you know?

In writing Lost Breweries of Toronto, I harnessed two of my greatest skills: monomaniacal drive to research effusively and sitting motionless for hours at a time. No one could have written this book before now. I don’t mean to say that I’m singularly brilliant: I mean to say that the technological resources didn’t exist. The Globe is all archived online from 1844 to the present day. To get correct details of Toronto’s 19th century breweries, I’ve have to comb through half a dozen search strings for each chapter to turn up information: Literally hundreds of disparate articles of dross to find an additional detail; to create another avenue of inquiry. I once spent three hours researching a bear for this book. It amounts to a sentence in the finished version.

If you’ve read Ian Bowering’s book The Art and Mystery of Brewing in Ontario, you will appreciate how long that research must have taken. I believe that he wrote that in 1988, which means that he did it all manually. I can’t even imagine. If you’ve read that book you know that most of it reads as a list or chronology more than anything else. Alan Winn Sneath’s book Brewed in Canada also has a chronology.

Those were more or less the starting point. Mining those two chronologies for data I created a spreadsheet. Using the spreadsheet I created profiles of each brewery. I intentionally avoided using secondary sources where possible because I don’t trust anyone to get the details right. Many of the secondary historical sources conflicted with each other. I used contemporary accounts and guides to Toronto, obscure legal records and first hand accounts, newspaper advertisements. I was able to source quotes from some of the late Victorian brewers. In one incredibly lucky instance I discovered an entire manuscript that was written by William Copland. I discovered the existence and location of three breweries no one seems to have known about. One of them was on the block I live on at Davisville in midtown Toronto. One of them was basically on the site of Bar Volo.

William Helliwell created a difficulty. We know everything about him. That sentence above is a young man realizing that he’s not going to live forever. He’s not a research subject: he’s a man with hopes and dreams and fears. He was clever and observant and detail oriented. He was desperately in love with his young wife. The poetry he wrote her was, from a critical standpoint, awful, but it was enough to win her heart.

The realization that you come to writing history is that you have to stick to provable information. The dozens of other brewers that feature in the book cannot possibly allow for the same level of detail. In culling information from every possible source, you begin to build up pictures of these people in your head. Some of them spring to life more readily than others.  The difficulty is knowing where to draw the line. The respect I’ve tried to accord them is not to assume motivations where they are not obvious; not to ascribe characteristics. It is the respect they are due.

Lost Breweries of Toronto has all the information that you’d expect of such a book: “This brewery was here and the brewers where such and so and it existed from then until then and they made X. X was 6.7% alcohol in 1897. Phew, that’s a strong beer.” Don’t worry. There’s plenty of that.

Mostly though, I ended up writing a book about Toronto. I wrote about the larger social context the breweries existed in. I figured out how all of the brewing families were intermarried. I tried to uncover how the capital from brewing built our city and how that history was more or less whitewashed in the name of Toronto the Good.

I stared for what must be days at fire insurance maps from the 1880’s and 1890’s; At this city’s growth and expansion through maps of acreages and geological surveys and maps of sprawling Victorian redbrick and maps of annexed towns. As I walk around Toronto now, I catch myself thinking of streets that no longer exist and buildings long since gone and taverns that no one has thought of in generations. The geography has changed, but the soul of the place is one that we continue to grow into.

All I’ve done is use beer to explain that.


Beau’s MaddAddam Gruit

It must be fun to end the world. So many authors do it.

There’s a giddy thrill that comes through in just about every book that does that and that’s likely the only commonality between them; the desire of the author to play with an entropic collapse. No one who has ever read The Stand will tell you that the latter part of the book is better than Captain Trips wreaking havoc on the landscape. Max Brooks wrote an apocalyptic scenario in World War Z that humanity ultimately survives, but the image I’ll always remember is of the rollerblading zombie fighter getting dragged down a manhole.

When it comes to dystopias, getting there is way more than half the fun.

Margaret Atwood’s recent trilogy of books Oryx and Crake, The Year of the Flood and MaddAddam are no exception to this rule. They have been out for a while now, so I’m not terribly worried about spoilers. If you are, you should probably go to the library and read the books or, better yet, buy them.

Around the new year, I had the good fortune to read two dystopian novels back to back: MaddAddam and Do Androids Dream Electric Sheep.

I’ve noticed that while people laud the works of prominent science fiction writers like Philip K. Dick and William Gibson, they’re better idea men than they are writers. They’re frequently ham handed in attempting to get their ideas across. When you get a better writer doing science fiction like Ray Bradbury or Neal Stephenson, they revel in describing the details of the world they create. Margaret Atwood fits squarely into the latter camp allowing ironies of human self-destruction to play out around the characters rather than using the characters as an excuse for the ideas.

There are similarities between MaddAddam and Do Androids Dream Electric Sheep and they have mostly to do with empathy as a religious concept.

In Dick’s novel, the world is already irradiated and animal species are dying off. There are off-world colonies that are said to be improvements. Things are so bad that Mercerism, the main religion, is based entirely around having empathy for a figure named Wilbur Mercer, a Sisyphean figure who walks endlessly up a mountain while stones are hurled at him by faceless entities. The people who dial into their empathy boxes feel his pain through a collective consciousness. There are other options. A mood organ will allow you to feel however you want.

The idea that enforced empathy will allow the people of a ruined world to obviate a tendency towards nihilism is absurd. People are ultimately alone and the world is beyond redemption. Chaos is evident in the kipple that clutters the buildings and threatens to swallow the remaining life. Even in that context, there’s an emotional scene with J.R. Isidore (Sebastian in the movie Blade Runner), who cannot bear the mutilation of a spider. Ultimately empathy exists, but in the world Dick created the question is always “but for how much longer?”

It’s a very different world in Maddaddam. There are engineered creatures that roam the landscape. Pigoons and Rakunks and Wolvogs. They’re the result of technology run amok. In enclaves, the rich make decisions that will decide the fate of humanity while poverty dehumanizes those who live in ruined cities. There is cannibalism, rape and murder and that’s before things get really bad.

God’s Gardeners manage to survive the apocalypse thanks to their religion which preaches self-reliance, careful marshalling of resources and respect and empathy for the world’s non-human inhabitants. It’s empathy as a communal state; not to dull the pain of existence, but as a guide towards it. Ultimately, if survival is going to be a possibility, you’d better help others.

There is a section of Maddaddam where the God’s Gardeners have come to rest at Cobb House. It’s not unlike Colborne Lodge in High Park: A 19th century building that had been used as a museum. At the time I was reading it, I was researching what brewing would have been like in the 1820’s. I thought, if I were one of those characters, I would probably want a beer. I’m almost certain that Zebulon would want beer. Brewing beer is probably the only marketable post apocalypse skill I’ve got.

This is where having a writer of Margaret Atwood’s quality comes in handy. The detail of the created world is such that you can vicariously experience the scents and flavours: The honey from Toby and Pilar’s bees. The berries growing on Pilar’s grave. The (probably pretty bad) coffee made of chicory and burdock root.

I knew that whatever it was going to be was probably a gruit. There aren’t any hops mentioned. Then I realized that I knew a brewery that specialized in gruit. I somehow managed to get permission from Margaret Atwood through her publisher and then handed off the idea to Beau’s All Natural. They’re brewing it this Friday for the Session Craft Beer Festival in Toronto next month. I had a small amount of input in the recipe, but since I’m in the middle of writing the year’s second book I’m missing out on the brew day.

The project might expose the Oryx and Crake books to some people who would not otherwise have read them. It will expose literary people who don’t know about craft beer to a really interesting gruit. It expands by a little bit the context of what can inspire a beer. A portion of the proceeds will go to help the Pelee Island Bird Observatory, which is an unexpected benefit and a bit of a mitzvah. At some point, I might get to drink a beer with Margaret Atwood. If you’d told me that was a possibility four years ago when I started blogging, I would have stared at you in blank disbelief.

It more or less comes back to the novel’s suggestion of empathy as a road map to survival. Ultimately, this has turned out to be a really good way to share things I like with people I don’t know. Everybody involved in making it benefits from it. It might make other people’s lives better in small ways that are quantified in minutes or hours. It might even save some territory for a Prothonotary Warbler.

Not a bad way to make a beer.


In Which I Realize I Have An MPP

(Editor’s Note: I once had an aunt who wrote letters to politicians. I believe she once lambasted Prime Minister Chretien over the rise in the price of a head of cabbage. It seems that the frivolity of subject has skipped this generation even if the letter writing impulse has not.

My MPP is Eric Hoskins. I met him once at an announcement of funding for the Ontario Craft Brewers. I don’t know who your MPP is, but I’m sure that they would appreciate hearing from you on the current debate about deregulation.)

Hello, Minister!

I am emailing you because I’m one of your constituents. I am periodically greeted by your smiling face when I check the mail and receive flyers. I am also Canada’s only national beer columnist, with Sun Media. I see the beer industry from a lot of angles. I work with brewers of all sizes and I have just written a book about the history of beer in Ontario.

I’d be writing to you as my local MPP, but you’re also in charge of Economic Development, which is a nice bonus.

I recently had Forum Research conduct a poll for me because I wanted to understand the mood of the province with regards to deregulation of The Beer Store. It turns out that people under 45 seem to be largely in favour of having beer sales in convenience stores. Rather than waste your time quoting numbers at you, I’m going to try and explain the history of the thing. It’s quite a niche subject, if I’m honest, so please don’t feel I’m being patronizing if I over explain.

The Beer Store is an outdated model. There was a time in the early 1980’s when it was perfectly adequate. When The Beer Store started in 1927, they didn’t have anything to do with retail sales to the public. They were meant to be a distribution system that the brewers in the province could take part in as a sort of co-op. It was partially owned by the participants. Over the decades, breweries consolidated and took each other over. In 1941, The Beer Store got into retail. By 1980, there were about three large brewers left. They owned the entirety of The Beer Store amongst them. This was alright because they were the only ones making beer. It made sense.

The problem is that they got arrogant. In February of 1985, they locked out the workers and shut The Beer Store down for a month. They forgot that they were not entitled to the support of the public. I can tell you that beer is a luxury good. No one really needs beer. Brewers depend on the public more than the public depends on them. If you’re a brewer of any size and you don’t listen to your market, you deserve what you get.

The problem is that since 1985, the market has changed immensely, but the structure of The Beer Store has not. Molson Coors is partly American owned and Labatt is owned by a Belgian/Brazilian consortium. The Beer Store, a system designed to serve the public of Ontario and sanctioned by the provincial government, is not even partly owned by Canadians.

Now, if I’m you, I’m thinking to myself, “Sure, but the jobs are onshore and they’re not going anywhere.” You’re right. Those jobs are important and retaining them is good.

However, currently there are something like 100 breweries active in Ontario. If the projections I’m seeing are correct (and I’m using actual declaration of intent from the breweries) we’re going to have something like 200 by the end of 2015. Some of these include the Ontario Craft Brewers, but realistically, 150 of those breweries will have no lobbying interest acting on their behalf.

There are going to be more breweries in Ontario than there have ever been. The high point was 155 at the time of Confederation.

The problem that we’re going to face as a province is that there is no shelf space for these 200 breweries. The LCBO is not obligated to stock their products. If you take a walk through the Summerhill LCBO in our riding, you’ll see that the beer section is stocked completely to the gills. I grant you that it’s a flagship store, but if you cast your mind back five years, it was not that way.

The Beer Store naturally claims that they’re doing a great job. They are doing a great job for extremely large brewers. The logistical system they have in place ensures that the very large foreign owned brewers do not have to compete against each other in convenience stores for the market. Even given that advantage, their sales figures are dwindling year over year. Simply put, they own a distribution system that is massively to their advantage and as Ontarians we have allowed this because up until 30 years ago, they were the only brewers.

But if you look at distribution from a small brewer’s perspective, it’s ludicrous. Let’s say that you’re a brewer based in Owen Sound. There’s an LCBO that is not obliged to stock your product. There are two Beer Stores and to get shelf space in them, you would need to pay a listing fee for the SKU and then a shelving fee for each location. It comes out to around $3000 to be able to sell beer in your hometown. It’s not equitable for a number of reasons, including the fact that you’re paying the money to a business your competition owns. The largest breweries will have their brands prominently displayed. Craft breweries could sell beer in The Beer Store in their hometown and no one would ever know they were there.

Oddly enough, the layout of the 200 breweries in the province of Ontario is going to more or less duplicate the map at Confederation. Before rail, every small town had their own brewery. With craft beer, there’s a locavore tendency against globalization. That’s kind of nonsensical since most of the ingredients that go into making beer are shipped very long distances, but people don’t think about it that much.

This means that across the province of Ontario there are start up businesses that don’t have a reasonable avenue of sale to the public. There are going to be 200 of them. That’s a lot of jobs, and these businesses are going to grow and expand. There will naturally be a period of levelling where some of the lower quality ones are jettisoned from the market, but on balance 150 survivors might not be unreasonable.

The Beer Store could have addressed this. They could have adapted to the market at any point since 1985 when we started to have craft beer in Ontario. Currently they are attempting to dictate to government and to the people of the province of Ontario what is best for us. They have once again forgotten that they’re meant to be serving us and not the other way around.

We’re in a situation where there’s massive economic growth to be had. Failure to change the existing situation will actively hamper small town business in Ontario.

Now, I don’t mean to suggest what should happen. I don’t know that it should be convenience stores or grocery stores. I don’t see why we couldn’t allow a separate co-op for Ontario Brewers (people quote NAFTA at me on that. I have not read NAFTA. It is long.) If all else fails, we could always nationalize The Beer Store. All I know is that something has got to give.

One of the reasons I’m taking the time to write this to you is that, as MPP for St. Paul’s, you’re fairly likely to be around for a while. It’s a liberal stronghold. I appreciate that the Liberal party seems to have come out against change recently.

I don’t think that this is an electoral issue. It is demographic. Something like 50% of people under 45 are buying their beer at the LCBO. Breweries are cropping up all over the province. The writing is on the wall, especially when you consider how badly you have to perform as a monopoly to lose 50% of your potential clientele over 25 years. This isn’t going away and the citizenry are going to get vocal. No matter who is in charge, something’s got to happen.

I don’t know what you’ll be able to do with the information, but the good news is that as an electoral issue, it’d be a soft landing. 70% of citizens would be fine with the grocery store or convenience store. That number is going to increase if the PSA The Beer Store is running keeps getting airplay.

Thanks for your time. I hope I’ve provided some context for the issue.

Fun With Numbers: Legitimate Polling Edition

Sometimes the best way to get what you want is to ask nicely.

A few weeks ago, I had become frustrated with the constant bickering between The Beer Store and the Ontario Convenience Store Association on Twitter. As a columnist, the nature of my beat is editorial rather than journalistic. Still and all, I felt like I had been following the debate over changing the laws regarding beer sales in Ontario. The Ontario Convenience Store Association’s numbers seemed high, and I attributed that to the obvious problem that their polling would be biased in their favour. The Beer Store’s numbers were being bandied about on twitter by their lobby group and were therefore equally suspect.

Since there was no impartial data available, I thought about the best way to obtain some. On the spur of the moment one evening, I sent an email to Forum Research having noticed that they maintain the Forum Poll, which is designed to facilitate responses to just this kind of issue. I didn’t know it at the time, but their President, Lorne Bozinoff was the head of Gallup for six years. As pollster credentials go, you can’t ask for much better.

I worded my email this way:

Over the last little while there has been a great deal of contention in Ontario about opening up the distribution channels for sales of beer through convenience and grocery stores. 

The problem is that the both sides of the debate are extremely biased and have each commissioned their own polls and studies which almost certainly contain questions that are leading and designed to produce a specific result. 

I am interested in there being an accurate and impartial poll of Ontario citizens to take a measure of the actual feeling in the province about allowing beer sales in a variety of locations like convenience stores, grocery stores or even purpose built individual specialty stores. 

I feel as though the will of the public is not being accurately represented and the simplest way to represent it is to ask them. 

You’ll note that I’m really only interested in impartial data. I wanted an accurate reading of the public mood on the subject. I worked with Forum Research to ensure that the questions were as neutrally worded as we could manage. Instead of data commissioned by an interested party, we have a snapshot of where the public mood is right now. The fact that the data came in seven hours before I was scheduled to go on TV to talk about The Beer Store’s latest campaign was the sort of karmic bonus that social media consultants only dream about.

The full release is not online yet, but it will be available a little later today.

Let me tell you a little bit about the way that the poll was conducted. It was an IVR telephone poll of 928 Ontarians 18 years of age or older. Some of the questions were pertinent to all Ontarians questioned and some of them were only pertinent to those who purchased beer for consumption at home. The sampling in the survey skews towards older cohorts, which is reasonable given that it was conducted on a Monday night. That doesn’t matter because the data has been statistically weighted to ensure the sample reflects the actual population according to census data.

Of the 928 respondents asked “Do you approve or disapprove of the job The Beer Store does retailing beer in Ontario?” the answer was 52% approve and 28% disapprove with 19% pleading ignorance. That’s ok. Not everyone buys beer. Disapproval is highest in the 18-34 Millennial demographic and males overall at 35%. Support is highest in Northern Ontario at 62%.

65% of the public purchase beer at retail to drink at home. This was the delineating question for the rest of the poll. All remaining questions are relevant only to those who answered yes: 588 Ontario residents.

“How often do you purchase beer?”

The data indicates that people buy beer less frequently as they age. 85% of respondents over the age of 65 buy beer less than once a month. The Millennial and later Gen-X cohorts purchase beer most frequently with 52% and 37% buying it bi-weekly. This should not be a surprise as brewing companies tend to refer to those as their customers’ prime drinking years.

“Are you most likely to purchase beer at The Beer Store or at the LCBO?”

This is a little surprising. Overall, 51% of Ontario residents are most likely to purchase their beer at The Beer Store, with 41% purchasing at the LCBO and 8% splitting the difference. The real separator here is that the Millennials prefer the LCBO by eight points, which is outside the margin of error. The Late Gen-X cohort are approximately equal, with a slight edge given to The Beer Store (45-42-13). In the Greater Toronto Area, the preference is for the LCBO by a single point. In the 416 area code, the preference is for the LCBO by 34%.

“What do you think is the most appropriate kind of store for retailing beer?”

The Beer Store wins this one, but by less of a margin than you might imagine. 30% of respondents named The Beer Store most appropriate. Grocery stores followed at 22% and Convenience stores at 20%. Oddly enough, the late boomer cohort came out in favour of the Grocery Stores and The Beer Store approximately equally. Millennials are in favour of Convenience Stores, but since they pay attention to social media more than the other cohorts that is unsurprising. The political leaning of respondents suggests that Conservatives are more likely to support options other than The Beer Store, while the NDP are 41% in favour of The Beer Store.

“How likely would you be to purchase beer in a convenience store or a grocery store.”

70% of respondents would be likely to purchase beer in a convenience or grocery store if given the option. This is interesting, because I believe the OCSA’s polling indicated 69%. Perhaps the media coverage in the interim has given that a little bump. Northern Ontario is a big outlier here with only 58% in support. Conservatives and Liberals poll out about equally, whereas the NDP are strongly against the idea.

“How likely would you be to purchase beer in a convenience store or a grocery store if it cost about 10% more than at The Beer Store or the LCBO?”

People hate the idea of paying more for beer. 70% of respondents were unlikely to purchase beer in a convenience or grocery store if the price of their product went up by 10%. The Millennial and Gen-X cohorts were most likely to be willing to pay a premium. Geographically, Toronto and the GTA were willing to pay more for convenience as well.

(Editorially, this causes some problems for both sides. Clearly people are willing to purchase beer from a convenience or grocery store, but they’re not willing to pay a 10% premium for the privilege of doing so. This also means that people won’t put up with the ridiculous $20.00 raise in the price of beer that The Beer Store threatens should the laws change. If 70% are against a 10% increase, you had better believe that 100% are going to be against a 50% increase. Might be time to retire that talking point, fellas.)

“Do you approve or disapprove of allowing convenience stores and grocery stores to sell beer in Ontario?”

Overall, the split is 48-44-8 for Approve-Disapprove-Don’t know. Most age groups are actually in favour of this, with respondents 65 and older taking essentially a neutral position. Northern Ontario is strongly against the measure with 55% disapproving. The 416 area code is the exact opposite. Conservative voters are 59% in favor the change, while 55% of the NDP disapprove.

“How would you rate The Beer Store for offering excellent products and services?”

Overall, this breaks down 30-26-18-9 from Excellent-Good-Fair-Poor. The group with the highest opinion of The Beer Store are the 45-54 year old Gen-X cohort. Millennials and the younger Gen-X cohort show the lowest ratings at. Essentially, the younger the cohort, the lower the score on this one.

“As far as you know, is The Beer Store Canadian-owned or Foreign-owned?”

This broke down to 62% Canadian Owned/22% Foreign Owned. The Millennials are best informed on this issue, with 27% correctly identifying The Beer Store as foreign owned. When you consider that the OCSA’s polling from December indicated that only 13% knew about the foreign ownership, it becomes clear that the media coverage of the issue is slowly educating the population.

Those are the results, and I have tried not to editorialize overmuch while I gave them to you.

Here’s what I see: The 18-45 demographics, which are the ones who buy the most beer by volume and whom all the marketing is targeted at are staying away in droves. If you are older than 45, you grew up with The Beer Store and it may just be force of habit that influences continued purchasing there. The polling is likely accurate and it indicates that as time has gone on, beer drinkers who are entering the marketplace are more and more likely to shop for their beer at the LCBO. The 18-34 demographic vastly prefer it. There’s no reason to believe that consumers becoming legal over the next ten years will see this demographic trend reverse. Older consumers will leave the market as they do.

It might be a stretch to suggest that people over 45 shop at The Beer Store because they grew up with it and are used to it. However, if that assumption is correct then the future looks pretty bleak for The Beer Store because new consumers are going to gravitate to the LCBO, which has many of the beers The Beer Store stocks and is already going about putting their LCBO Express stores into grocery stores.

There’s some good news and bad news here, depending on who you are.

If you’re the Conservative party and Wynne gets ousted, this might actually become a wedge election issue. It’s one with a relatively safe landing, since about half the population is in favour of the change and 70% of the population would take advantage of the changes. (Personally, I think that just about every other issue should come before this one. Don’t vote based on this. If you like the rest of the package and this a bonus, then maybe it could be your deciding factor. Chances are we’re very different people.)

If you’re The Beer Store, and your sole mission statement is to sell beer, you’ve somehow lost the confidence of the consumer over the last 25 years. Younger demographic cohorts, the prized ones who provide most of the volume, prefer to shop for beer elsewhere. That is a really bad sign, but the worst part of that problem is that this is the age of social media and the Millennials who are not shopping at your stores control the tone of the online discourse. You are trying to dissuade them from pushing for change by handling a twitter account when you’ve already lost the demographic. Strategically, you’re continuing the discourse to your detriment because the longer it is in front of the public, the more people know you’re foreign owned and the less likely new consumers are to shop with you.

Because of the demography we see in this snapshot, this issue is not going away. Sales through The Beer Store are suffering. At some point, change is going to happen. It might be closer than we think. If The Beer Store’s polling is aware of how negatively higher prices poll and they are using that as their anchor, that’s a fairly desperate move because it’s easily disproved. They’re issuing it as a threat to their own consumers and that may be because their backs are against the wall.

Also, if this poll has revealed anything to me, it is that Northern Ontario is really under-served. Fortunately, we’ve got craft breweries in Kenora, Sudbury and Thunder Bay now, so maybe they will get some exposure over the summer.

On Mediocrity

In undergrad, a friend of mine adopted a principle that allowed him to spend more time playing cards than doing coursework. While he was very interested in doing his best when it came to the courses pertaining to his major, he viewed elective courses as something of an intrusion into his spare time. As a result he would aim for a balance between the highest mark that he could possibly get and the lowest amount of effort that would allow him a respectable grade. He called it “The Gentleman’s C.”

I am not sure that it served him well subsequently, but we always had a fourth for euchre.

I’ve been thinking a lot about The Gentleman’s C in recent months because I’ve noticed something interesting: Given enough time, everything, regardless of its quality will end up with a mark somewhere between 3.25 and 3.75 on Untappd. For those of you who don’t know, Untappd is an application that lets you check in the beers that you are drinking and give them a score out of five. It’s generally fairly pointless and ultimately gameifies the consumption of alcohol by giving you badges. That’s very probably a bad thing in the long term.

I think that this has to do with the sheer quantity of beer being made across North America at the moment and the amount of enthusiasm that the market is seized with. In terms of criticism it’s difficult because there’s only so much meaningful output that any one person can create. In Ontario at the moment there are so many new breweries that I think it unlikely that anyone has eyes on all of them.

Understand this: As little as thirty years ago, it would certainly have been possible for a single critic to have tried every beer in production in North America. It would not even have taken all that long to do it. Possibly less than a year. It was not as though there were fourteen new kinds of session IPA hitting the market each week.

My numbers are bogus here, but follow me on the concept. There are something like 3000 breweries in Canada and the USA. I think we can safely give those breweries an average of five brands a piece, although in practice I suspect it to be higher than that. This means that there are something like 15,000 brands of beer being brewed in North America (excluding Mexico because I don’t know enough about that to wrap my head around it.)

At one beer a night that would take you 41 years. Even were you to dedicate your entire life the process and call it 8 three ounce samples a night, you’re never going to catch up with the growth forecasted and you’re going to zeno’s paradox yourself right into oblivion.

(edit: kudos to astute reader David Horatio Ort, who kindly pointed out that my bogus math was three times as bogus as it ought to have been.)

For that reason, there’s a significant tendency in criticism to focus on the absolute best of the best. It’s impossible to have context for everything, so why wouldn’t you focus on the things that you know you’re going to like and be able to review positively? If you try something you don’t like why would you waste your time reviewing it? Many people I’ve talked to are pleased to simply not write about things that they don’t like or things that are poorly made. I do it myself. I’ve got books to write and I’d prefer to recommend good things in the column than excoriate bad things.

With that huge and ever expanding number of beers out there, I think that we’re probably doing a disservice to people who read about beer by accentuating the positive when we should really be eliminating the negative with extreme prejudice. If a beer is simply not very good, then we should probably be telling the public that.

Untappd is a poor substitute for reality. Not everything is worth 3.5 stars out of 5. There’s some rough work being pulled at the fermenter and I’m seeing that increase rather than decrease. There are beers being launched into the world that are uninspired and really serve no purpose other than being something to market. There are some woeful mediocrities out there that deserve nothing but scorn. I don’t mean mass market brands from the big guys. I mean small craft beer producers who are more interested in a marketing strategy than a quality product. Brewers whose grasp has exceeded their reach.

The directory over at Mom n’ Hops is telling me that there are 184 breweries and brewing companies open or in planning in Ontario. When I started writing about beer in 2010, I think we had something like 35 in Ontario. For that reason, you wanted to be a bit gingerly. It was a big deal when someone got a new product on a shelf. You wanted to be a bit supportive even if the product was mediocre because at least it meant there was choice.

Choice is no longer a problem, but mediocrity is becoming one. Average is going to get you lost in the shuffle. Aim for something a little higher than a Gentleman’s C, folks. Just existing is for plankton.

On writing about History

Philip St.John lived in Uxbridge, Ontario. He settled there in 1817, if I’m remembering the details correctly. He had emigrated from Cork in Ireland to Upper Canada, but he wasn’t properly Irish. The St.Johns were from the German Palatinate, which is near Heidelberg, and went to Ireland around 1710. Before that, we don’t really know. I’d put money on there being some Huguenot in there. The borders weren’t terribly well defined at that time, and there was a lot of migration out of that part of the world. People had the knack of fighting over it.

What I know for sure is that Philip was known to the local residents of Uxbridge by two nicknames. One was the slightly sarcastic “King Philip” which referenced the fact that he owned the largest wagon in the county. The other was “hypocrite” and it had to do with the fact that he enjoyed the occasional tipple despite claiming to be a teetotaler. I think it’s fairly likely he kept a jug on the wagon.

By the end of his lifetime, Philip did the calculation and figured that he had personally cleared 99 acres of forest from lands that he owned. There was a time in the not too distant past when it would have been possible to walk across all of Uxbridge Township on family land.

It’s not like the family disappeared. The other week I was out having dinner at Morgan’s on the Danforth with Dad and got to meet some relatives. Chances are if you live in Southern Ontario and your last name is St. John, you’re a distant cousin.

One of the things I’ve thought about periodically since starting to write history is what Philip would have made of what I do for a living. I don’t believe they had beer critics in the 1820’s. They barely had advertising. In all probability, he would have handed me a splitting axe and a team of oxen and told me to put up this frivolous pursuit and go clear the stumps out of the back forty. Then again, I know more about brewing beer than he would have, so it wouldn’t have been a total waste.

Writing about history is an odd process in that most of the creativity involved is referential. Many of the writers that I know will have loose ideas bouncing around in their heads that defy capture. They know they want to write something, but they don’t quite know how the pieces fit together. If the information they’ve ingested is left long enough, something will eventually trigger it. Some idle Tuesday afternoon, while they’re staring out the window and dunking a teabag, it will suddenly coalesce into a wholly formed idea.

Writing history isn’t like that. Most of it already happened and you have to wait a long time for a sequel.

One of the advantages my Co-Author Alan MacLeod and I had was the vast digitization of resources that’s happened in the last decade. There’s a book by Ian Bowering called The Art and Mystery of Brewing in Ontario which he published in the early 1990’s. He had to collect all of the data by hand, sifting through archives and newspaper microfiche. As a result, the book is not really a book so much as it is a list of facts. I can see why. How do you contextualize that information without the ability to create a huge index of material? For God’s sake, that was five years before google. He probably had a table covered in index cards.

Google books, incidentally, is a powerful force for good and a massive deterrent for authors. It is now the largest collection of digitally archived information on the planet and it will preserve everything it can get its hands on forever. If you’re an author, you’ll live forever in the cloud. Congratulations! You’re part of the singularity. It is more impressive than Alexandria. It makes the Colossus of Rhodes look like an action figure.

As an author, it’s a worry because it scoops up everything without worrying too much about copyright. Stephen Beaumont and Tim Webb’s Pocket Guide is up on there. Most of it is blocked out, and it’s not a useful way to view the data, but it is on there. For reference, I think I recommended that as a Christmas stocking stuffer four months ago. You begin to wonder whether people are going to buy your book or just google it. It’s discouraging because authors periodically like to buy luxury items like soap and bread.

The digitization of material can be pretty overwhelming. I have detailed maps of Ontario at 1846 and 1869 that show all of the data I was able to mine from Gazetteers and Directories. I can see them from the top down, different colours representing different industries, brewing and distilling. In some cases town names have changed and I’m left with a best guess. In other cases, marriage and death records long stripped of their emotional import; of their heft.

The factual information is there in immense and robust detail. It represents lifetimes of work and struggle from people not unlike Philip St.John. The basic experience for all of these people was similar. They were in a new land. They were trying. The best you can do is represent the shapes of those lives as they surround your topic.

There is too much information to be useful. If you were writing fiction, you would expect the scraps eventually to form a larger whole. You might have a beautiful moment of epiphanic glory where it suddenly all made sense. Writing history doesn’t work that way. The argument already exists. You’re merely figuring out how to support it.

My dreams have become oddly literal with this information cluttering up the mental landscape. Rural route concession crossroads with red tail hawks gyring on an updraft. Stinking wharves in Muddy York and winter sleighing on the lake. Canoeing the Missinaibi down to Moose Factory. Long draughts of lost ales from breweries no one alive has seen.

At a time like this, you’d practically be glad of stumping the back forty. Unearthing the roots is difficult work.

Understanding The Beer Store

Since it is December, we are in that phase of the year when people talk idly about abolishing The Beer Store. You’ve got Martin Regg Cohn over at The Star doing a reprise of last year’s column. It’s a good party piece, but it’s unlikely to accomplish anything. Even Anindya Sen who released a number of studies and who is probably a very good economist seems not to have made an impact, although this might be due to the ease of dismissing a commissioned study.

I’ve taken a slightly different tack on the issue this year: I’ve actually talked to The Beer Store in an attempt to understand the problem. If you want to effect change, you’ve got to understand the motivations of all of the parties involved. It does you no good to vilify The Beer Store out of hand. It is not run by Darth Vader. If it were, the stores would feature more unsafe catwalks over giant pits.

Let’s put aside for a moment the shopping experience which has been famously awful. Let’s put aside the rhetoric that it is an outmoded eastern bloc style of organization.

Let’s instead have a look at the functions it actually performs.

The shopping experience tends to blind people to the fact that The Beer Store is actually a retail and distribution organization. Despite the insistence of studies to the contrary, it operates at a cost recovery basis. That is to say that it does not turn a profit. It makes enough money to pay for itself.

Please understand this: It does not make a profit. Intentionally. Anyone who is telling you different is flat out wrong.

This is not to say that the ideas of those people who are telling you it makes a profit are wrong. They’re absolutely right. If it were a retailer in a purely capitalist system, The Beer Store would be raking it in hand over fist. Anindya Sen claims that there are approximately 700 million dollars worth of incremental profits unaccounted for in The Beer Store’s operation. Let us account for them.

The Beer Store has more than 440 locations operating all over Ontario. Sure, there are a whole bunch in Toronto, but there’s one in Espanola and Wawa and Azilda and Coboconk. They’re everywhere. This is the retail component, which is customer facing.

Consider all of the stuff involved that does not face the customer.

There are the licensee sales. When you see the Brewer’s Retail truck out and about delivering kegs, that’s also The Beer Store. They have an online ordering system for licensees and people to staff it. They’ve got people driving those trucks. They’ve got administrative staff supervising those sets of employees.

There are the logistics of distribution to contend with. You can’t sell beer in Wawa and Coboconk unless you get the beer there in the first place. The Beer Store has six separate distribution centres which service the province. This means that beer intended for stores or licensees need only be shipped as far as the nearest distribution centre and The Beer Store will take care of the rest. Think of the logistical support needed for this.

There’s the bottle recycling program. I recall reading somewhere that your typical ISB bottle can be re-used between 18 and 20 times. The Beer Store controls the recycling of these bottles within Ontario. I forget exactly what the current consensus is on recycling beer bottles. It seems to change depending on the cost of cartage or freight. Anyway, it employs a number of people and The Beer Store has a really significant hand in it.

There’s also the Draught Services division which handles installations for licensees and line cleaning equipment.

What The Beer Store actually does is outsource services for the three extremely large companies that own it. I suspect that the only reason Sapporo is allowed 4% ownership is to keep it from becoming a subsidiary company of either Molson Coors or AB InBev based on shifts in market share.

Because these companies have contrived over several decades to own The Beer Store, they are able to outsource all of the following: Customer facing sales, licensee facing sales, draught equipment sales, distribution of their product to all corners of the province of Ontario, the ownership and maintenance of the physical buildings, the ownership and maintenance of the fleet of trucks required, the recycling of beer bottles for re-use predominantly by the owners of The Beer Store, the staffing and administration of the entire concern, insurance liability for the entire concern and the pensions of the entire concern.

Jeff Newton, a spokesperson for The Beer Store (and a dashed accommodating fellow), pointed out to me that smaller breweries could also take advantage of these benefits. The scale of the thing is prohibitive if we’re all going to be honest. There’s an initial investment involved that requires a lot of capital.

To be fair, I should point out the other thing that I learned. The LCBO has a markup which makes them a profit. Selling beer in The Beer Store seems to (once you recoup the initial investment) provide a greater profit margin for breweries. Sure, it’s a long term strategy, but it might work out eventually.

What all of this means is that all of the service fees that go into selling beer at The Beer Store essentially go into a pool which funds all of the above listed activities. There is a sliding scale of fees to have your products listed if you’re a smaller brewer, which is something of a concession. However, you’re still paying into a system which disproportionately benefits the large brewers in a substantial way.

The Beer Store doesn’t need to make a profit, which is why it doesn’t. Making a profit would be gilding the lily. The real benefit here is that the large brewers don’t have to perform many of the tasks I listed above. The Beer Store handles those for them. It also brings a certain amount of stability to the cold war like détente between AB InBev and Molson Coors in Ontario since they both benefit massively from their ownership and the status quo seems to be working.

This is what you’re contending with when you talk about privatization, incidentally. You’ve got a massively organized logistics and distribution company whose parent companies have some incredibly deep pockets and have contrived to create an oligopoly out of something intended to be a public service over the course of several decades. If you want privatization, you need a governmental figure willing to think further ahead than the next election.

Whether you like it or not the current structure of The Beer Store is absolutely brilliant. It’s actually genius. Just because it tends not benefit the consumer doesn’t change that.

Barrel Aged Double Tempest and Vintage Winter Beard

Since it’s now much colder outside my window than it is in my freezer, it’s probably a good time to talk about Imperial Stouts. There’s something seasonally dualistic about the combination of snow and Imperial Stout, if only in terms of greyscale. There’s a warming character to them and a percentage of alcohol that is perfect for long snowbound days when you weren’t really going to make it further than the corner without a 4×4.

The first example here is Muskoka’s Winter Beard, which is a double chocolate cranberry stout. There are two varieties out there at the moment. There’s a 2012 vintage, which seems to be on shelves at the LCBO and a 2013 fresh vintage, which is available across several provinces. Apparently you can get it in Newfoundland, which tells you something about Muskoka’s intent regarding the rest of the country. I like the fact that the larger regional breweries are spreading out a little.

I find myself wondering whether the Winter Beard 2012 vintage was produced in excess last year against the possibility of scheduling problems with the brewery move this year. It’s possible they’re simply trying to introduce the concept of vertical tastings into Ontario in a way that’s slightly more formalized than it is now. Either way, you’ve got to admire the vision. I think it’s the latter because when I spoke with the brewery last year, they said I should put a bottle away for a year. I intended to, certainly, but you know how it is when you find yourself shorthanded for host gifts during the Christmas season.

The packaging is a little ostentatious, with a silver embossed visage on a black background. I assume this is Mad Tom’s cousin, Hirsute Nicholas. It makes proud mention of its standing on Ratebeer. It is apparently a 94 and was voted Best New December Beer Release. I assume that must have been 2011, which I think would have been the first year it was brewed.

Interestingly, when it’s quite fresh Winter Beard is a little bit confused. There is chocolate and there are cranberries, but you get other elements as well. There’s the roast and slight bitterness that comes with the territory. It is very pleasant, but it doesn’t really gel. After a year of age, all of the elements come together and Winter Beard presents exactly as I imagine it was meant to in the mind of the brewer. The general impression that I came away with was a dark chocolate truffle with a tartly sour cranberry gelee in the center. It does exactly what it says it ought to do, and in a sense is a really fine example of prescriptivist design. The only issue is that if you’re not interested in that description, you’re going to hate it.

On a scale from Don Johnson’s immaculate stubble to Greg Koch in his millionaire hobo period, I give it two owls and a hen, four larks and a wren.

Sometimes you’re better off not aiming for something quite so specific.

Case in point: the latest member of the Amsterdam Adventure Brews series is Barrel Aged Double Tempest.

It's essentially the reverse star wars shot.

It’s essentially the reverse star wars shot.

Barrel Aged Double Tempest is a courageous venture on the part of the brewery into the superheavyweight category of Imperial Stouts. I’m going to go ahead and call that anything over 10% alcohol. They’re the ones that make up the vast majority of top rated beers in the world. It’s your Bourbon County, Dark Lord, Hunahpu, Speedway, Expedition, Abyss kinda stuff. The stuff that requires you to stand in line and make your obeisance. You need a certain amount of brass to even attempt the category because these are the beers that people are going to compare your stuff with.

Running down the list of important details, I can tell you that it’s 14% alcohol and that it is apparently 115 IBUs (which would be about the most possible, but ought frankly to disappear into 14%.) It is aged in Four Roses Bourbon Barrels and has been for nine months. I don’t know Bourbon, but I can tell you that Four Roses won American Whiskey of the Year yesterday from Whiskey Advocate. Also, Philip Marlowe drinks it in The High Window. I assume Marlowe knows what he’s doing. Point is, this is exactly ten months along.

I’ve noticed that really good beer does one of two things and it depends a little on the style. It will either convey the same sensory information on every sip, following the same progression of flavour and experience every time, or it will change every time you taste it revealing permutations of the various elements involved.

In the case of Barrel Aged Double Tempest, it’s the latter category. It pours black as a charred stave and has a mocha head that recedes quickly but not completely. You get the alcohol on the aroma, but at 14% that’s practically an inevitability. It’s a good thing given the contribution of the bourbon. There’s a suffusion of molasses and concentrated dark chocolate syrup. Oddly enough, the roast character of the malt emerges about a foot from the glass, which is a neat trick.

The snifter is non-optional for Imperial Stout. How else would you swirl all ostentatious-like?

The snifter is non-optional for Imperial Stout. How else would you swirl all ostentatious-like?

I got different permutations as it warmed. On one sip the rye came through in a burst at the back of the palate and then faded into the bourbon; a nice conceptual contrast between Canadian whiskey and Bourbon. On another sip, it was the small ash of barrel char wrapped in crystalline vanilla sugar. There was one where it the mouth coating effect resulted in something akin to the cakey flour of a dark chocolate brownie. As you drink it, if you inhale deeply enough, you can actually feel the alcohol on the exhale. Amazingly, the carbonation hadn’t disappeared even after an hour and a half.

Now, I’ve been fortunate enough to get to try a number of the superheavyweight Imperial Stouts; some of them fairly recently. I think that this could hang with them. I don’t think it’s as polished as some of them, but I’m not sure that polish is what I’m looking for. There are just enough rough edges here that it forces you to engage. It will be interesting to see if it retains its complexity with another year of age on it.

Bloody well done.


The OCSA vs. The Status Quo

The second of the studies that the Ontario Convenience Store Association released in August is a good deal more broad in scope than the first. It is entitled An Economic Analysis of Increasing Competition In Retail Liquor Sales in Ontario. It is also written by Dr. Anindya Sen from the University of Waterloo. If you really like reading economic papers, you can download it by clicking the title.

I am going to attempt to explain the gist of the paper as best I can given my limited understanding of the economic model employed between pages 18 and 24. I think I get most of it, but if there are any economists out there, you might want to lean in on this one.

This paper is intended as a study to provide information on the possible effects of partial privatization of alcohol sales within the province of Ontario. It is an attempt to provide substantive academic research into the problem. This is something of which I am generally in favour. Too often we argue on internet forums about the likely effects of privatization without any real research to point to.

The initial findings which guide the study are as follows:

1)      The vast majority of the money the LCBO makes is on markup, which is generated in their capacity as a wholesaler. (This is usually true with specific amounts based on product type. Here is a link to the current pricing structure.)

2)      Comparatively speaking, federal excise and federal and provincial ad valorem taxes typically make up a smaller percentage than the markup,

3)      Based on empirical evidence, increased market competition is significantly correlated with an increase in per capita gross income, net income and government revenue generated by the provincial liquor authority.

The arguments that follow are largely based on the concept of consumer and producer surpluses and it basically goes like this:

Say you’re standing in the LCBO at Summerhill, checking out all the groovy new craft beers and thinking about what to drink this weekend. For the purposes of this argument, you’re all about buying a bottle of Panil Enhanced because it looks interesting and you liked the Bariquee that came in last year. You check the price tag and it is $15.00. The absolute most that you’re willing to pay for a single bottle of beer at retail is $16.50. That measure of $1.50 difference counts as your welfare based on consumer surplus.

Now, on the other end of the scale, Panil is trying to sell their beer for as much money as they reasonably can. It’s good beer and they feel they deserve to be paid a premium for it. I don’t know exactly what price the LCBO is buying Panil Enhanced from the importer at, but let’s assume for the sake of argument that it’s about $6.50 a bottle. That’s more than the $5.00 the importer would have taken at a minimum. Their producer surplus is $1.50.

All this means is that the system works tolerably well towards an equilibrium between consumer surplus and producer surplus at $15.00. Also, you go home with a bottle of Panil Enhanced and everyone’s happy.

If you could remove some of the markup that the LCBO adds as a wholesaler from the equation and keep the producer surplus the same, your consumer might suddenly be paying $13.50 for that bottle of Panil, creating additional consumer surplus.

Without competition, there’s no compelling reason for the LCBO to change the equilibrium point in the model. They would make less money in markup, and, because the product is cheaper, the province would take less PST. “Everything is worth what its purchaser will pay for it,” said Publilius Syrus. You’ll pay $15.00 for Panil Enhanced because it’s worth that to you.

There is also a concept here that you should understand that is called Deadweight Loss that’s associated with a monopoly on various products. Since a monopoly allows the retailer to charge the most beneficial price for themselves, some consumers are not able to afford Panil Enhanced at all, resulting in a loss of market utility. They have frowny faces.

Dr. Sen is essentially arguing that the LCBO voluntarily enter into a position in which they are creating their own retail competition.

Theorize that some kinds of alcoholic beverages are available for sale at convenience stores. The study assumes that convenience stores would be allowed to accept a lower markup, resulting in decreased cost to the consumer. For this the convenience store would pay some of the markup as licensing fees. As a result of that move, the majority of rational consumers would shop at the convenience store. This would in turn result in lower sales at the LCBO, which would force them to lower their prices.

This would lead to a significant reduction in government revenue due to the loss of markup and ad valorem taxation. The good news is this: The lowered costs to the consumer mean that the people who counted as Deadweight Loss and could not afford Panil Enhanced at all can now do so and that the people who were experiencing mild consumer surplus on their $15.00 bottle are now paying $13.50 and those suckers are doing backflips of joy in the streets, let me tell you. “Whoopee hoo,” they yell “I’m gettin’ enhanced tonight.”

“The LCBO in the short run is worse off, because of lowered sales and profits generated by its own stores” says the study. “However, it is quite possible that overall LCBO net revenue and transfers to the province will actually increase. Recall that in this model, convenience stores must also transfer their markup revenue to the province. Since they charge a lower price (compared to the LCBO), the total amount of liquor sold is obviously more than the quantity sold by the LCBO as a monopoly retailer. Otherwise, the LCBO would have earned these higher profits as a monopoly retailer by setting a lower price.”

Got that? Convenience stores charge a lower price and the LCBO charges a lower price but ideally the increased volume of sales that results from the decreased prices bridging two sales channels might theoretically increase once you take the additional taxation revenue into account.

I agree completely with Dr. Sen’s finding. That’s exactly what would happen given those conditions.

Those conditions will be met on the day that hell freezes over.

The model depends on a simplified version of the system as it currently exists which thinks solely about the benefit in terms of consumer surplus. The issue is that since the LCBO’s profits and the general tax revenue from the LCBO and Beer Store make up approximately 1.5-2% of the annual provincial budget, the real world also has to take the consumer into account as a citizen who benefits from services derived from that revenue.

The ignored cost implications are staggering. The LCBO’s reduced profitability would probably result in a decreased operational budget and therefore a decrease in staffing. Think about the amount of work that would have to be done in order to figure out what the decreased price structure would look like.

Think about the fact that you as the OCSA are pitching this fanciful study whose empirical data analysis does not account for demographics or trends in the marketplace and a conclusion section which contains a woefully large number of conditional statements. If I’m the government, I’m shutting you down because the LCBO is a guaranteed cash cow in a time of economic uncertainty and you are offering a potential 5% – 9% theoretical increase at some point in the future if everything goes right and there are no unforeseen eventualities.

Peace, order and good government means that “if” and “maybe” and “should” don’t get a seat at the table.

On a final note, consider the main precept of the OCSA model: additional sales. Additional sales mean additional consumption. If the core tenet of your model hands your opponent a social responsibility argument to beat you about the head with, you can’t be surprised when you lose.

The OCSA vs. The Beer Store

One of the interesting things that happened in Ontario’s beer scene this year is that the market is becoming increasingly contentious. The increased interest in beer is making it so that the status quo is becoming somewhat untenable. There are 155 craft breweries open or in planning as of this writing. That means a very large number of brands for which the LCBO does not have shelf space and a number of craft breweries which are not large enough to afford The Beer Store’s listing fees.

When you add to this the increased interest in the craft and import segments, you get players in the market who are more serious about effecting change than they used to be. Take the Ontario Convenience Store Association, for instance. They hired economist Anindya Sen from the University of Waterloo to produce a two part study that makes the case for privatization of beer sales.

The first part of the study is about the difference in pricing between two-fours in Ontario and Quebec. You can download it here.

I do not have a Ph.D. in Economics, but I’m going to try and walk you through the basic arguments here.

The methodology here was to choose five brands sold over a 22 week period and record data based on pre-tax beer prices. The period in question was Dec 2012-May 2013. The brands in question were Molson Canadian, Molson Dry, Coors Light, Budweiser, and Bud Light. The format in question was 24 341ml bottles. In Ontario, data was culled from The Beer Store’s website. In Quebec, it was culled from online pricing for Metro and IGA supermarket chains.

Dr. Sen’s findings were (for those of you who don’t want to wade through the PDF)

Quebec IGA Quebec Metro The Beer Store % difference IGA % difference metro
$26.08 $25.95 $35.56 27% 27%


Essentially, in Ontario we pay 27% more for a 24 of beer than people do in Quebec. That is essentially the primary conclusion of the study and then there are subsequent conclusions based upon that data.

Can you spot the problem with this study? The Beer Store could. They released a comment paper on the study on November 18th through the Earnscliffe Strategy Group. It is available for download here.

To their credit (and lord knows I’m a fairly vocal critic of The Beer Store) The Beer Store only lists one format of pricing on their website or in store. It’s the total amount that you’re going to pay for a thing. It includes both tax and bottle deposit.

The claim here is that the IGA and Metro prices that are listed don’t include bottle deposit or sales tax (GST and QST in Quebec.) If you remove from the average price of $35.56 the bottle deposit and applicable sales taxes (GST and HST in Ontario) the price difference is not $9.50. It’s $3.33.

The Beer Store’s study goes on to mention commodity taxes. In Quebec, these total about 50 cents a litre while in Ontario they total 91.62 cents a litre. As it turns out, this is the main reason for the difference in beer prices between Quebec and Ontario. The provincial commodity tax we’re charged is about 1.8 times higher.



Table 3:

Re-Stated Net Price Removing All Relevant Taxes & Deposits

  QC Average Price ON Average Price
Price after Adjusting for HST

and refundable Deposit





Adjustment for Provincial

Commodity Taxes


-$ 4.09


-$ 7.43

QC and ON prices on Equal






Adjustment for Federal

Commodity Taxes


-$ 2.56


-$ 2.56

Net Price after removing all

Consumer Taxes and deposits






Of course, this means that the data collected for the OCSA study was at best improperly fact checked and that any conclusions drawn from subsequent steps of the study are bunkum. This is dumb. It does not matter if you employ an economist to release a study if the basic and easily verified facts are incorrect. You cannot use an appeal to authority to point to an expert opinion if that authority demonstrably does not understand the problem.

And you know what? The OCSA’s study was released in August. No one questioned the thing. It claimed that The Beer Store was making 700 million dollars in additional revenue based on faulty data. It may have been wrong, but it sure got a lot of re-tweets.

This is the problem with the debate about Ontario and The Beer Store. Every time the subject of The Beer Store comes up just about any self respecting beer drinker is going to have an opinion about it. The problem is that aside from The Beer Store, no one actually knows how much money The Beer Store makes on an annual basis. The information is not disclosed to the public. The ability of interested parties like the OCSA to release a study claiming a 700 million dollar windfall is enhanced by this. It renders substantive debate on the issue ludicrous.

The end result of this go around in the Ontario Privatization Hoedown is that The Beer Store has managed to basically discredit any further studies the OCSA might care to produce. They have done this by understanding their own pricing structure. Frankly, it was kind of a gimme, but I have to applaud their restraint in not smacking it down on the second day with a cry of “Boo-Ya.”

What this should do is highlight the fact that the Ontario beer market is large and profitable and that in the next few years, organizations are going to fight over it. It is not being fought over for the benefit of the consumer, no matter how much the consumer might feel that they should have a say in the matter. Frankly, what we want is immaterial.

As a side note, the average price of those five brands at the moment at The Beer Store is $34.55. That may have been an unintended consequence.