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In Toronto Pubs, Breweries Battle for Beer Taps With Persuasion and Cash

Beer industry insiders say big breweries spend hundreds of thousands of dollars each year trying to influence what your bartender decides to put in the fridge.

Photo by {a href=""}The Nexus{/a}, from the {a href=""}Torontoist Flickr Pool{/a}.

You may think, when you go to a bar, that your choice of beer is entirely yours. But that decision may have been made well before you even put on your drinking pants—and not by the bar owners. According to industry insiders, it’s often the brewers who dictate what’s on tap.

In fact, insiders say, sometimes it’s brewers, not bar owners, who cover the expense of putting in those very tap lines. Because in Toronto, and across Ontario, keg-fridge space is expensive real estate.

According to multiple bar owners and industry workers, breweries entice bars into promising them a spot on the lineup by providing anything from customized coasters to branded patio umbrellas, or by financing the installation of equipment and making cash payments. Sometimes, breweries even ask that rival brewers get denied a spot on tap. Since Toronto’s craft brewers aren’t typically the beer sellers with the most money to spend on “marketing,” this would amount to yet another advantage for the province’s big brewers, who already have a virtual monopoly on Ontario’s beer business.

Craig, an east-end bartender who has worked in the industry for years, admits that virtually all brewers provide some sort of incentive to improve relationships with the bars—but especially the big brewers. (Craig is not his real name: like many others interviewed for this article, he fears reprisal for talking critically about industry marketing tactics.)

“The big guys have cash to do it on another level,” he said. “The craft guys will throw a free keg to a bar, but with them, it doesn’t feel like tied selling. They’ll give you something free for an event or festival but there’s no implicit demand to sell their products.”

But even that, it seems, is changing.

Jason Fisher, owner and operator of the newly-opened Indie Alehouse in the Junction, said the practice is catching on among larger craft brewers. “We’re not talking about a few coasters and some keychains for prizes, or a keg of beer for a once-a-year festival in exchange for marketing space, but tens of thousands of dollars in fridges, glasses, umbrellas, patio furniture, chalk boards, signage, advertising space, et cetera. Things bar owners would otherwise have to spend real money on.”

“It’s understood,” Fisher explained, “that, in exchange for these items, the brewery wants dedicated lines or, in the case of big breweries, all the taps and bottle selections at that location excluding any competition.”

Even a cursory look at the province’s liquor legislation would suggest this practice is problematic. From the Liquor License Act:

A manufacturer of liquor or an agent or employee of a manufacturer shall not directly or indirectly offer or give a financial or material inducement to a person who holds a licence or permit under the Act or to an agent or employee of the person for the purpose of increasing the sale or distribution of a brand of liquor.

The Alcohol and Gaming Commission of Ontario (AGCO) is responsible for regulating beer and liquor distribution in the province, and so they would be the ones to find and pursue violations of the Act. But they largely only investigate violations they learn about through complaints, police investigations, or spot checks. When they do find a breach, there are no hard and fast rules for punishment.

Penalties (ranging from a fine to a flat-out revocation of a bar owner’s ability to sell alcohol) are decided on a case-by-case basis. The agency takes into account the licensee’s past behaviour, the likelihood that they will commit another breach, the severity of the breach, and so on.

The AGCO was hesitant even to confirm whether or not the practice of gifting alcohol or providing discounts in exchange for keg-fridge space is, in fact, illegal. A spokesperson said only that she couldn’t interpret the Liquor License Act for me.

According to some of those working in the industry, this approach to enforcement doesn’t always ensure that breweries play fair.

Photo by {a href=""}staceymccool{/a}, from the {a href=""}Torontoist Flickr Pool{/a}.

“Guys find loopholes with the AGCO,” says David (someone who—disclosure—is a personal acquaintance of mine, and whose name has been changed). He’s a former sales rep who worked for almost a decade with one of the big brewers. According to him, reps from big brewers find creative ways of “gifting” their accounts, sometimes simply paying off bar owners to keep their business. “[Beer reps] will just walk into a bar and tell them to swipe their corporate credit card for like 16 pitchers.” he said. “It’s like, ‘Tell them I had a party here.’” Other sales reps and business owners told me similar stories about bar owners drawing up phony catering receipts for lunches and events that never actually happened.

The practice, David and others say, has become so widespread that freebies, incentives, and kickbacks are now simply expected. New breweries and the city’s smaller craft brewers don’t have the budgets to compete.

“I have never purchased a line,” said Tim (not his real name), a sales rep for a local craft brewer. “But I’ve been asked a lot. I was recently told by a bar that we could get our beer on their taps if we paid them $1200 cash and did a seven and one keg deal with them [that is, allow them to buy seven kegs and get one free]. I couldn’t do it.”

“It’s a struggle,” Tim said, “when you go into a bar and before you can even talk about the merits of your beer the owner or GM is asking about kickbacks like rebates on kegs sold. I honestly think some bar owners are only in the business to get free shit.”

This is a sentiment that David, the big-brewery rep—who worked with a much greater ability to provide freebies—echoed. “Half the shit I gave to bars for giveaways just ended up in the basements and rec rooms of bar managers. I literally once had a guy tell me, ‘There’s a used pick-up truck for sale down the street from me for $4000. Buy it for me and I’ll give you all my business.’ Another guy said, ‘I want to see Billy Joel at Madison Square Garden, or I’m going with the other guys.’ I didn’t get him tickets, his bar went with the other guys, and I’d be willing to bet he got to see that concert.”

And while Billy Joel tickets and cars are outside of the realm of incentives that Toronto’s craft brewers can provide, it’s clear they feel the pressure to pay up, or risk getting squeezed out of the market.

“You have to start playing the game or you lose out,” said Daren (not his real name), a representative from one of Toronto’s newer craft breweries. “Even smaller places that claim to support craft beer these days want one or two free kegs up front when they buy the first keg.”

He has given out cash incentives to bar owners. “I mean, everyone does it, so you’re kind of forced to if you want to compete,” he said. “I recently paid a bar $500 in exchange for carrying my beer. Then, six months later they stopped selling my beer, and there’s nothing I can do about it.”

Photo by {a href=""}gardinergirl{/a}, from the {a href=""}Torontoist Flickr Pool{/a}.

Brewery reps say that because nothing is ever put in writing, the promise that a bar will actually continue selling the brewer’s beer in exchange for a pay-off comes with no real guarantee. Often, bars will accept a brewer’s money and free merchandise, then renege on the deal.

David recalls a time when he pushed to get his beer on tap at a busy downtown bar. “I did a huge Super Bowl party. I brought in promo girls, I did a giveaway of a leather couch, we raffled off a big-screen TV during the game, I outfitted the entire staff with shirts—all told I probably spent over $8000 on merchandise, then I spent over $1000 at the bar with my company credit card buying beer during the game. It was close to a $10,000 day and, after the game, the bar bought two kegs and that’s it.”

Luckily for David and other big beer reps, that’s not as devastating a loss as it seems, and it’s atypical of the usual returns they see on their investment. In fact, David tells me, while some of the reps worked with budgets of over $100,000 a year just to keep bar owners happy (with everything from tap handles and coasters to neon signs and hockey tickets), it’s not unusual for those reps to leverage that money to the tune of a million cases of beer in their respective regions, which translates to roughly $35,000,000 in sales—although most of that would consist of Beer Store sales.

When I reached them for comment, Molson Coors maintained that their sales practices are entirely above board. I spoke with Gavin Thompson, senior director of corporate affairs for Molson Coors Canada, who was unequivocal about their policy on the practice of buying tap lines or providing cash incentives. “We don’t do that,” he said. “And it’s unfortunate that that perception is out there.”

In fact, Thompson notes that Molson Coors has practices in place to ensure that those payments don’t occur. “I can assure you that our guys are 100 per cent compliant,” he says. “We have routine audits in place and a scorecard system to make sure our sales reps are compliant. We’ve actually received accolades within the industry for having some of the best practices in place related to this.”

As for promotional materials, Thompson said that the company’s intention is not to sway bar owners. “Our end goal with promotional material,” he told me when I asked about giveaways and swag, “is to ensure that the consumer has the best possible experience and that they enjoy drinking our product.”

Charlie Angelakos, vice president of corporate affairs for Labatt Breweries of Canada, offered a similar sentiment in a short, emailed statement: “Sales practices between alcohol manufacturers and licensees (bars and restaurants) are governed by regulations and guidelines established by the Alcohol and Gaming Commission of Ontario (AGCO). Labatt has a strict code of conduct and regularly educates its employees on these guidelines.”

The argument can of course be made that this is all just business. Naturally, the salesperson who can do the most for his or her client usually wins the account in any industry—be it beer, copy paper, or real estate.

But with beer, what is the cost to the consumer?

When bar owners are willing to auction off their fridge space to the highest bidder, or the guy with the most freebies, it means fewer bar owners are choosing to stock products because you want them. And wouldn’t you like to know you’re the one deciding what’s in your pint glass?


  • Beerrep

    “We don’t do that,” he said. “And it’s unfortunate that that perception is out there.”

    I’m absolutely stunned by this statement. As a sales rep for a brewery in Toronto, I can tell you unequivocally that the “buying” of taps/fridge space is wide spread and commonly practiced. While everyone – even the small guys – participate in some way, it is worst among the largest companies. They treat on-premise sales to restaurants and bars as a marketing exercise in support of the retail segment, where they make their true money. We’re talking about tens of thousands of dollars in “support” or “incentive”, and yes, it ranges from Leafs tickets to patio furniture to line installations.

    • Jason Kucherawy

      I’ve worked in bars before, and we loved when the reps from one of the big breweries popped by. It meant we got stuff! I thought that would have been a pretty cool job, seemingly spending your day popping into bars to give away concert tickets and swag. Now I like meeting the reps from the smaller independent breweries because they are just as passionate about quality beer as I am.

  • Stéphane Demers

    No surprise there… Also no surprised to see that the BigTwo Bullies are absolutely denying any wrongdoing… What I find almost as disgusting as the practice itself, is that is seems the Licensee would get punished by AGCO, not brewers..

    • Rico_Featherbutt

      So very true

  • Scott

    My answer: if the tap list is homogeneous, don’t drink there. Simple. Lots of great bars out there (not just in Toronto) are carrying craft beers now. Keep drinking at those places. At least the good beer is being sold regardless of the negotiation antics.

  • steeplejack

    Excellent article. Honestly, I would go out of my way to go to a pub that made a point of NOT selling anything by Molson/Coors or Labatts (including Creemore Springs, or Barking Squirrel, etc.) because their stuff is, frankly, crap. Sweet, fizzy, bland, boring worthless, tasteless, overhyped, overmarketed shite. Get me a place that will give pride of place to various craftbrewers like Flying Monkeys, Mill Street, Kawartha, etc. and I will go there. Every time. I don’t need a giant television set and ear-splitting noise. I want my corner pub — with GOOD beer — darts, games, a smallish tv with the sound turned down, and trivia nights. Let’s face it: Tankhouse Ale, or Smash Bomb or Sgt.Major IPA are real IPAs. Alexander Keith’s is just a joke.

    • Jason Kucherawy

      I think Barking Squirrel is actually pretty good. Just because Hop City has Moosehead money behind it, doesn’t mean it’s Moosehead quality.

      • Burp

        Amen. Drink what you like, let other people drink what they like, and don’t pull the ‘omfg you’re drinking that?’ routine because it’s just tiresome, and no, to speak to the article, I’m absolutely not buying out a bar, or greasing the owners. I’ve left a few regular watering holes because the taps were sold out to one of the big brewers. Choice is one hell of a good thing, we have so much of it, just don’t all y’all be douchebags about it.

        • steeplejack

          When I drink, and I’m out with others I keep my opinion to myself, unless I’m with non-beer drinkers or people of the same mind. But here I figured let ‘er rip. Molsons/Labatts and the other big brewers don’t seem to care much about the product — or marketing ethics — so I stick to the little guys who make a decent product. I never thought I’d become a beer snob but apparently I have. Oh well.

    • Anonymous

      “…anything by Molson/Coors or Labatts (including Creemore Springs, or Barking Squirrel, etc.)…”

      Creemore Springs is owned by Molson Coors, but Hop City Brewing (makers of Barking Squirrel) is owned by Moosehead, which is an independent brewery with only 5.5% of the entire Canadian market. You don’t have to like their stuff, but implying they’re among the foreign-owned conglomerated market dominators is misleading.

      • Sean Marshall

        Barking Squirrel isn’t bad, and while it’s owned by Saint John-based Moosehead, the Hop City brewery is in Brampton, so it’s brewed locally. Moosehead also owns the McAuslan Brewery in Montreal, which also has good stuff.

        • Ryan Smith

          Apples-to-apples, Moosehead is better compared to American regional independents like Yuengling, August Schell, Narragansett, and F.X. Matt.

          Putting Moosehead in the same category as AB-Inbev, MolsonCoors, or Sapporo is a bit unfair. Moosehead is an independent Canadian business in its sixth generation of family ownership.

        • Mark Matthews

          That’s like saying even though Molson Coors is a global giant, it’s brewed locally so it makes it okay!

          • Ryan Smith

            No it’s not, since Moosehead is a family owned Canadian business and not part of multinational conglomerate.

      • steeplejack

        Then I retract what I said about Barking Squirrel. I honestly thought it was a Labatt’s product, and had no wish to mislead anybody on any thing. Still, I find Moosehead itself not much different from the big guys’ product.

        • Anonymous

          I don’t particularly like Moosehead, but Squirrel has become my default beer over the past year since a bartender at The Rebel House turned me on to it.

  • Anonymous

    Its always been this way. Check out the Ontario beer strike of the late 1980′s and the stories about the Holiday Tavern accusing the beer companies of shakedowns. Frankly though if you are wanting to stock craft beers then your clientele isn’t interested in Fosters or Coors anyway and small brewers can reward their best customers in many other ways. If you are going to compete in the vast majority of bars then you need “promo” money because these kinds of owners have no loyalty except to bottom line. I dont expect Cameron’s at East Side Marios so I dont go there.

  • cc

    As a downtown bar owner, though perhaps not in my own best interest, I am also shocked at the statements made by the beer reps in this article – though I must also add, this is not a practice in any way limited to beer – liquor, energy drinks, cola, all of it is sold space. As a rule of thumb, if you see a logo on anything it was likely paid exposure. This is no small town exercise either, even in my smaller establishment income from these arrangements will be easily a half million dollars this year. I can’t imagine that this practice is limited to bars and restaurants either – in any market where there is such stiff competition among relatively interchangeable products, there’s bound to be this kind of deal making.

    • Rico_Featherbutt

      I think you’re missing the point. It’s the Ontario beer industry that has different legislation from other industries, like wine or spirits. Then, on top of that, the province gives beer distribution to foreign companies (Labatt’s & Molson’s) and comes down hard on microbreweries, which are actually owned and run locally. It’s an uneven playing field, obviously created by our own government. Micros play the game because they can’t afford what the big guys do.

  • Jason Kucherawy

    Small, independent bars run on a tight budget so I think it’s okay for them to give some lines to the big breweries if they get something in return – just so long as they also carry a good selection of local micros and craft beer. I really appreciate the bars that stand their ground and only carry local though!

    • Rico_Featherbutt

      It’s illegal though.

  • jmc

    As a bar owner of a craft beer bar in downtown Toronto, the purchasing of taps is a very common practice amongst the big three and has even started to trickle down to the big craft brewers – none of which we carry. Whether cash or keg deals, the big guys are able to make kegs disappear with ease – “beer gone bad”, “spillage”, etc.. there are plenty of ways of making beer disappear off the books. anyways, the bottom line is that if you see one of the big guys in a bar, just know that with 99% certainty there are kickbacks being had. That $7 you just paid for a pint of Below Zero Canadian or Coors cost a fraction of the $7 you pay for a pint of good craft beer. Support the little guy and buy LOCAL beer.

    • EyeCon

      here here!!

  • BC Beer Guy

    This is common practice for everything. When you walk into a grocery store and see an end isle display with some soup on special, that is not the grocery store deciding it’s time to put soup on special. That is the soup company paying the grocery store for the space and for the promotion. This is a symptom of capitalism. It exists in all establishments from food and beverage, to electronics and so on. You pay you play. It’s “illegal” and “unethical” and yet it is the status quo… and you wonder why Politicians want their fair share of brown envelopes…???

    • Mark Matthews

      You’re exactly right. My thought is that if you want your Campbells soup on special, go somewhere else and buy it!
      If you really want your Micro beer, go somewhere that sells it!
      Well said.

    • Rico_Featherbutt

      Read what I put above. The beer industry here in Ontario isn’t allowed to do that, by law, then gets a blind eye for big brewers when they do obvious stuff. You’re not allowed to pay to play, then the large guys with money, pay off the government, then do what they want.

  • Robert VanTol

    If a bar only stocks beer based on kickbacks and not what the “customer” wants they will not be in business long. At the end of the day someone has to buy the beer for you to stay in business. Also the kickbacks go to the bars based on their sales if you carry their brand but it does not sell you are not getting many free kegs back. A new bar opened by people with no existing track record will not be getting the same kickback that say a new 30,000sf “chain” sports bar in the financial district will get..

    • Bill Lambert

      Sadly, the big three rely on ignorant customers. College students, who haven’t even tasted real beer yet, are quite happy to chug Coors Light at $6.00 a pint, because that’s a buck cheaper than the craft beer next to it. For a bar to completely avoid big brands constitutes a real risk, because – and I quote – “Coors Light drinkers don’t like real beer”. I’ve heard far too many bar owners give me that line, verbatim.

      When I introduce people to craft beer, I practically have to threaten them. “If it’s a good beer, why isn’t it sold everywhere ?” is their usual defense. People just don’t have a clue, and much like the U.S. government likes to lie about terrorism, the big breweries likes their drinkers to stay ignorant, because that keeps them loyal.

      • Rico_Featherbutt

        True. Which means better education about all aspects of the brewing industry for consumers.

    • EyeCon

      “If a bar only stocks beer based on kickbacks and not what the “customer” wants they will not be in business long.”

      If only that were true. . . too many of them MAKE crazy $$ and have been operating way too long. They prey on the ignorant and uninformed, Most, if not all chains have ridiculous deals that have and continue to make stupid bank. it is a dishonest way to make a living and i am glad i can sleep with a clear conscience knowing i am doing what allows me to be me.

  • JDK

    Major supermarkets chains make products pay massive fees for shelf space. It’s not particular pleasant but a reality. Legalize it like in other industries instead of hand wringing about small biz owners getting free swag. shock horror.

    • Bill Lambert

      Legalize it ? Hell no! PROSECUTE IT!

      The problem with the AGCO is it doesn’t enforce against its most egregious offenders. If they’re going to regulate the alcohol industry, they need to stop half-assing it, because right now the only people negatively affected by the AGCO are consumers are small business owners. Everyone at the top of the chain is having a free-for-all at our expense.

      • Mark Matthews

        I know for a fact that the smaller breweries DO NOT want the AGCO to start enforcing the liquor laws. It’s easy to bash the big brewers but this goes on with the smaller craft/micro brewers just as much. Just in different ways.
        Smaller breweries who DIRECT DELIVER their product offer buy 2 get one free deals to get bars to carry their brands. A practice that could get the brewery a massive fine, and get the bar shut down and have their license suspended.
        Why is the beer world supposed to be any different that any other packaged goods company.
        When you go to the bar for wings and a pint, you don’t demand that the bar carry “BRAND X” of wings do you? You don’t demand they carry Pepsi instead of Coke do you?
        If you’re putting a new roof on, you don’t walk into Home Depot and demand they sell you IKO shingles do you?

        Here’s the solution. If you want BRAND X, go to a bar that sells it.
        The same way you would go a different store if you wanted IKO roof shingles.

        • Rico_Featherbutt

          Sorry Mark, doesn’t work that way. 3 for 1′s, known in the industry, is a money loser. That’s working hard to give it all away. That, is a charity.

          And yes, people do want specific types of wings. Check the blogs, people talk about the quality of wings all the time. Coke and Pepsi is often chosen.

          You obviously miss the point of doing business and positioning products. If people didn’t care, the Chinese would be making your house.

    • Rico_Featherbutt

      Great idea. Let’s legalize murder so we can empty our jails. Good job!

  • Jules

    Thank god for Bar Volo. 32 craft beers on tap and rotating every few days. Beaus is as corporate as they get.

    • Ilikemybeer

      I love that “Beaus is as corporate as they get.” Best line in this entire comment chain.

      • Winkee

        Meaning they don’t do corporate I would guess.

        • Sean

          You can add Steam Whistle + Mill street to your corporate brands.

        • Rico_Featherbutt

          Yes, that was his point. Beau’s is not corporate. Sleeman’s is corporate. Japanese corporate.

    • Anonymous

      Beau’s is a microbrewery that makes one beer. How is that even slightly corporate?

      • Tmex

        Beaus makes more than one beer. They do a lot of beers (Patio Saison, Matts Sleepy Time Stout, Screaming Beaver to name a few) and casks. I think you mean the one beer wonder Steam Whistle.

        • Anonymous

          The only beer Beau’s makes a steady supply of is Lug Tread, they have a handful of seasonal/one-off/limited run beers. Either way, hardly “corporate”.

    • Martinottawa

      Ever been to Beau’s? The place is tiny, and has like 5 employees. They’re successful and good at marketing, but hardly “corporate”

  • John

    somewhat relatedly, I was at victory cafe recently and a rep for Mill St. was handing out coupons for free beer (cobblestone stout) from the LCBO to anyone in the bar who had ordered a Mill St product. This was clearly done in conjunction with the ownership of Victory, since the only way he knew what I was drinking was because the bartender went over and told him.

    • Mark Matthews

      Offering a customer free beer as an incentive to purchase their brand is an illegal activity known as “Inducement”. Giving beer out as a reward, prize, or incentive is completely illegal.

      • Rico_Featherbutt

        And ironically enough, since it’s a micro, the AGCO conveniently finding this behaviour. Meanwhile, large breweries were literally out on the streets of downtown Toronto, giving away product.


    Very well written! Good read.


    Here is a great video produced by American Craft Brewers:
    This video explains why craft beer can be a better, more profitable choice for bars and restaurants. From higher margins to more loyal customers, craft beer is the best use of valuable draught real estate and bottle lists. Stone Brewing CEO Greg Koch explains why switching from mediocre brands — which can sometimes rely on illegal giveaways and unethical incentives — and switching to quality craft beer will improve the bottom line.

    • Ben Johnson

      Great video. Thanks for sharing, Sybil.

  • Neil downtown

    Although the focus of this article is primarily on the provision of draught beer in Toronto bars, I’m pretty sure the same situation exists with respect to bottled beer (which takes up even more of that valuable fridge-space). I can’t count the number of times the answer to my usual question — “What do you have for light beer in bottles?” — is one word: “Coors.” Since it is impossible to imagine that this near-monopoly on the bottled light beer market in Toronto is the result of Coors’ superior quality, can I be forgiven for laughing hysterically at the comments of the Molsons/Coors guy (Gavin Thompson) quoted in the article???

  • jaycedeclan

    A very good resource for everybody that wants to read a good blog.

  • Rico_Featherbutt

    Well, Molson’s and Labatt’s are outright lying. The AGCO is lying. LCBO is lying. The industry is rife with problems and government is taking bribes. The Beer Store is a foreign owned organization, and most AGCO or LCBO activity is against Ontario owned breweries. How else could you possibly explain the Molson Amphitheatre? Owned by Molson’s, selling Molson’s products. Oh right, Ontario Place was connected to the LCBO through Andy Brandt (Wikipedia the guy, as Andrew). The Dome was owned by Labatt’s, pushing nothing but Labatt’s product. Micros get dinged for cleaning beer lines for free.

    I have known $40,000 to arrive in cash at a bar mid-town from Labatt’s, taking out microbrewery taps instantly. The sales dropped, the bar closed within 6 months.

  • Nashville

    This time we are exposed to this rampant ignorance on Reddit, one of the
    social media platforms where people ramble on about whatever. Some
    character, whose reddit handle is just five numbers, three zero
    something, went on a rant about how too many tap handles in local bars
    and pubs are going to local beers.