Ontario brews up a new beer reform, although it still needs to be uncorked

Lauren Birch

This week Ontario revealed the lucky thirteen grocery retailers who get to be the first to stock their shelves with beer. As a result of an “extremely competitive bidding process” these retailers could be selling beer at up to sixty locations in Ontario by December 2015. Long overdue, this reform is the biggest change to alcohol retailing in almost ninety years.

While people seem to be cheering from the rooftops about this so-called “liberalization” of alcohol, I remain rather skeptical about the true benefits of this new policy. As someone who was born and raised in the UK (the home of pubs and pints), I am all for selling beer… in, well, every retail outlet. My concern with the beer reform is that there is a “catch” that accompanies all the pros.

The idea of this liberalization reform is inherently a great one, but it has come at an extremely slow pace, incrementally changing over the past couple of years. Reform of beer sales has been in the news for most of 2015, but when are we actually going to start seeing some of these changes? While Ontario reports that these 13 selected retailers could start selling beer as of December, it seems pretty unlikely that they will be granted authorization for each individual store from the Alcohol and Gaming Commission of Ontario, receive shipments of beer, and then reorganize their store shelves in such a short amount of time. Similarly, while promises have been made to approximately 450 stores across Ontario, this incredibly lengthy formal agreement highlights that no more than 150 new outlets will be selling beer before May 1st 2017—which is not that many, and is quite a long time away.

The beer reform has had to appease the existing monopolies, The Beer Store and the LCBO, both of which are backed by extremely powerful unions. The LCBO, the Liquor Control Board of Ontario, is a crown agency corporation in Ontario, and The Beer Store is a privately-owned retail chain. Both created in 1927 to “protect” citizens from over-indulging, The Beer Store was originally designed to be a co-operative of Ontario’s brewers. Over the years, The Beer Store has switched hands and is now owned by three major international breweries; Anheuser-Busch InBev SA, Molson Coors Brewing Co., and Sapporo Breweries Ltd.

As it stands, the Ontario government’s secret arrangement with the Beer Store in 2000 granted The Beer Store a huge advantage in the beer market, giving them the exclusive right to sell 24 and 12 packs of beer, and allowed them to dominate beer retailing in restaurants and bars. Needless to say Ontario’s bars and restaurants have been huge advocates for the reform, and even sued The Beer Store for their secret arrangement. The new reform on the surface may seem like it is loosening the reins, but in reality, The Beer Store will still have major controls over beer sales.

So what is changing?

 

1) Convenience: Finally when we’re grocery shopping we can return home to our loved ones having “accidentally” picked up a couple beers.
2) Transparency: the Ontario government has released the aforementioned 190 page agreement, instead of leaving us in the dark like in 2000.
3) More craft beers: smaller craft breweries will be provided a minimum of 20 per cent of shelf space in both grocery stores and The Beer Store outlets, instead of previously being behind closed doors and out of sight in current Beer Store locations.
4) Smaller restaurants and bars no longer have to pay a surcharge on beer from The Beer Store; they can now pay the same price as consumers.

And what isn’t changing?

1) Unfortunately if you’re in the mood for something a little stronger, you’re out of luck – this reform is limited to beer. Sorry, wine and liquor drinkers.
2) Hours of Sales: in the grocery store on a Sunday at 5:10pm looking to grab a few drinks to accompany your latest reality TV show?… You aren’t going to be able to do that, as beer sales are still restricted to specific hours.
3) The Beer Store will still be owned by three huge international breweries and will continue to make profits. While The Beer Store claims it is a not-for-profit because individual retail stores operate on a break-even basis, this Globe and Mail article reveals that the company is actually worth $396 million annually to its owners… which is a pretty substantial amount of money. The Beer Store also has no limits on opening new stores, although they will have to ensure they are self-serve and open-concept.

There has been a lot of talk of beer prices – will that change? Will the price go down as other players enter the market? Will the price rise due to an increase in distribution costs? With so many barriers to enter the beer market, it’s hard to predict what will happen to prices, although we have already seen a 25 cent increase per litre of beer this month. There is one thing I am pretty sure of though: easier access to supply does not necessarily mean a huge spike in demand. I am not entirely convinced that selling six-packs of beer in the grocery store will lead to drunken hooligans on the streets of Ontario (which is a surprisingly common argument against this reform).

For a relatively progressive country in most policy areas, it continues to surprise me that we live in a place where we are slow to change alcohol laws that were created in 1927 – apparently we are still living in the near-prohibition era. How is it that we get so excited about ten LCBOs being able to sell 12 packs of beer? Ultimately, the ‘beer reform’ has shed some light on the complexities of government and, while this is a step in the right direction, I am arguing that we need a leap. As Justin Trudeau said, it’s 2015.

Lauren Birch is a Master of Public Policy Candidate, 2017. She previously completed a Honours Bachelor of Arts at the University of Toronto. Her academic interests include urban and transportation policy, global cities, and civic engagement. When she isn’t studying, you’ll likely find her wandering around Toronto, or planning her next trip.

 

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