In defense of The Beer Store

As 2021 sees systemic changes in the way consumers buy goods and services, it made me realize that some Ontarians have a fundamental misconception about what The Beer Store is and isn’t.

As one of the four independent directors on The Beer Store’s board of directors, I want to share what I have learned over the five years in this role.

First, The Beer Store is not a monopoly; a monopoly can fix prices without competition. When it comes to beer in Ontario, The Beer Store can’t fix the prices – the brewers set their prices.

It is fairer to think of The Beer Store as a cooperative beer distribution company. It belongs to any brewer who wishes to own it; its mission is to make the widest possible selection of beers available to Ontario consumers at the lowest possible cost.

Second, The Beer Store is not meant to be a profit making business. Reported losses are accounting losses that take into account non-monetary expenses such as depreciation of equipment. The Beer Store operates on the basis of a self-contained break-even point: each year it sets fees that are billed to brewers based on the volume of beer they sell through the system. These fees ensure that the total revenue collected equals the total annual cash costs of operating the system, no more and no less.

The Beer Store’s service charge remains significantly lower than the fees charged to brewers when they sell beer through the LCBO or grocery stores. This is important because it helps ensure that Ontario has some of the lowest pre-tax beer prices in the country while ensuring that brewing beer in Ontario, whether you are a large or small brewer, remains a financially viable business. Without The Beer Store, beer would be sold at Ontario’s most expensive outlets (LCBO, grocery stores and convenience stores). These higher costs would be passed on to the consumer in the form of higher prices, as seen in other provinces.

Thanks to our 7,000 well-paid employees, we sell our beer responsibly with benefits few other retailers offer.

The Beer Store’s open access policy ensures that any brewer, large or small, can access the market through any of its 433 stores and eight distribution centers. Each brewer can list as many products as they want in as many beer stores as they want. As a result, 240 brewers currently sell over 1,000 brands through the system. Almost 60 percent of these brewers are small-scale Ontario brewers. This range of choices is not available anywhere else in Canada.

Last but not least, The Beer Store is a leader in environmental protection. It collects nearly two billion containers of alcoholic beverages sold by it, the LCBO and grocery stores each year in Ontario. It has a 95 percent return rate for refillable beer bottles. The Beer Store also operates, collects and recycles nearly 70% of the 602 million containers of wine and spirits sold by the LCBO each year. The combined annual weight of all materials recycled under these programs is 265,291 tonnes, a weight equivalent to approximately 34 percent of all materials recycled in Ontario’s blue box.

Without the Beer Store, who would take on this management? The LCBO, grocery stores and convenience stores don’t want it. As a result, most of this material would end up in landfills.

Is the beer store perfect? Of course not. Can it better serve consumers? We are constantly trying to improve ourselves. But when it comes to reducing the costs and prices of beer, offering the widest possible choice of brands of beer, and providing jobs for over 7,000 hard-working Ontarians, while protecting the environment, we believe that The Beer Store is second to none and is the best place to buy your beer.

Bob Aziz sits on the board of directors of The Beer Store and is COO of the Ontario Municipal Employees Retirement System (OMERS).