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Craft Brewers Push Back on Corner Store Beer Sales

Brewers say they would rather stick with Ontario's current model for liquor sales, despite its flaws.

Photo by {a href="http://www.flickr.com/photos/metrix_feet/5748136389/sizes/z/in/photostream/"}Metrix X{/a} from the {a href="http://www.flickr.com/groups/torontoist"}Torontoist Flickr Pool{/a}.

A recent push to legalize beer and wine sales at convenience stores across the province has received support from thousands of Ontarians, and also from Tim Hudak and the Progressive Conservative party. But local independent brewers say a move like that could hurt craft beer sales, and that the biggest producers would end up dominating the market even more than they currently do.

The recent campaign to have beer sold in corner stores came in the form of an online petition started by a small-town convenience store owner and promoted by the Canadian Convenience Stores Association, mainly through the website FreeOurBeer.ca. The petition has attracted over 100,000 signatures.

But while the allure of buying booze along with smokes and lottery tickets—not to mention a popular distaste for monopolistic alcohol selling practices—might have some people crying for change, craft brewers in the province prefer the system the way it is.

Ken Woods, the president of Etobicoke’s Black Oak Brewing, says the convenience-store model would lend itself well to large companies with aggressive marketing strategies and the money to pay for premium positioning in corner-store fridges. Smaller brewers, he fears, would be left out.

“Have you ever taken a look in a convenience store and seen any artisanal products, like artisanal potato chips?” he asks. “What convenience stores are great at doing is mass produced products that are very generic, very similar, and have got their distribution set.”

Woods estimates a move toward selling beer in convenience stores would hurt the market share of small, local brewers, and possibly put some out of business almost immediately.

On the other hand, he says the current competition between the LCBO and The Beer Store to offer customers a better tactile shopping experience—exemplified in LCBO product-sampling counters and The Beer Store’s new Beer Boutique locations—steers increasingly discerning customers toward craft beer.

Michael Arnold was involved in a push for booze in corner stores over a decade ago. Now, as the president of Trafalgar Brewery in Oakville, he says he initially tried to help convince the province that the move would benefit craft brewers. But he soon realized it wasn’t his brands the convenience stores ultimately wanted.

“You could just see, they saw us as a lever to get in to talk to the government,” he says. “But what they really wanted was to sell shelf space to Labatt and Molson. They knew nothing about craft beers.”

Like Woods, Arnold says that while the current system could be improved, he would rather work with it. The relatively low distribution fee the LCBO charges helps keep the prices of his beers down. The relatively small amount of shelf space in the average convenience store, meanwhile, would probably drive prices up. Smaller brewers, Arnold thinks, would end up “paying a premium for the bottom right-hand corner.”

A representative from the Canadian Convenience Stores Association could not be reached for comment.

While proponents of beer in Ontario’s corner stores like to bring up the success of smaller breweries in Quebec and New York, where convenience store alcohol sales are commonplace, Cameron’s Brewing president Bill Coleman says brewers in those places have benefited from strong local craft-beer cultures. He doesn’t think Ontario’s craft beer scene is quite that developed.

Still, if it came down to convenience stores selling beer in Ontario, Coleman thinks his brand would fare relatively well. “It would be competitive, but the good micros will survive.”

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