End of Beer Store deal has ‘huge economic benefit’ for Ontario’s craft brewers, alcohol consultant says

The Progressive Conservatives’ proposed termination of The Beer Store deal has a “huge economic benefit” for Ontario’s craft brewers, the province’s top liquor adviser has said.

Ken Hughes promises that reforming beer sales will “liberate” the market for small, artisanal operations, which he says are a cornerstone of Ontario’s identity.

“Today, craft brewers in Ontario are disadvantaged by the way The Beer Store operates. Only 2% of the beer sold through The Beer Store comes from craft breweries,” he said in an interview with CBC Radio. Metro Morning.

Hughes, a former Conservative MP who also served as Alberta’s cabinet minister, delivered his report to Premier Doug Ford late last month on ways to increase consumer choice and the convenience of grocery sales. alcohol.

Based on Hughes’ recommendations, the Conservatives introduced legislation last week that would allow the province to enter into a 10-year deal with The Beer Store.

Before the Ford government can open the beer retail market to convenience stores and mass merchandisers, it must end a contract with The Beer Store that limits the number of retail outlets in Ontario to in 2025. (Jeff Walters/CBC)

The deal, signed by the previous Liberal government, saw the expansion of beer and wine sales to hundreds of grocery stores across Ontario. But the contract also prohibited them from using their own distribution system and from negotiating their own price agreements with brewers.

The PC’s sweeping decision would lay the groundwork to allow every grocery store and convenience store in Ontario unhindered access to the sale of beer, cider and wine.

In order to increase these sales, however, the Ford government must go head-to-head with a coalition of the province’s top brewers – Labatt, Molson and Sleeman – who retain predominant control of The Beer Store.

“There is no other place in the world where the government has handed over to the three biggest players in the industry essentially a management control position in the market,” Hughes said Monday, noting that the current monopoly is bad for consumers.

But the beer giants already have plans to fight back.

Labatt and Molson warned the province last week that breaking the beer deal would result in steep financial penalties and said they would file a legal challenge over the proposed termination.

Asked about this impending expense and what it might cost the taxpayer, Hughes said “it is entirely premature to suggest that it will cost anything.”

“Let’s see how it goes,” he said.

Scott Simmons, president of the Ontario Craft Brewers Association, has long encouraged the province to expand liquor sales beyond The Beer Store.

The group represents some 95 of the province’s 270 small brewers.

Craft breweries can currently have a maximum of two outlets, but an indefinite number of production facilities.

While craft beer accounts for 8% of all beer sales in Ontario, Simmons told CBC News last month that further privatization of the market could increase that figure.

“When you start expanding retail access to more grocery stores, big box stores, or specialty liquor stores or convenience stores, you’re just creating more distribution.”