The Beer Store opens up ownership to craft brewers, but the move doesn't solve Ontario's beer distribution problem.
Earlier this morning, private, foreign-owned retailer the Beer Store made a surprising statement, indicating that it would be opening up ownership to Ontario craft brewers.
The move comes in the wake of the Star’s recent investigative coverage, constant online media criticism, consumer demand for more competition, and Premier Kathleen Wynne’s threats to dismantle the monopoly altogether. Beer Store president Ted Moroz said in a statement today that they have listened to the concerns raised and will be implementing their new plan immediately: “As a result of these changes all Ontario brewers will be able to participate in the management of the company and the smallest Ontario brewers will get improved opportunities to grow their sales volumes at a significantly reduced cost.”
Under the new structure, smaller Ontario breweries responsible for less than $5 million a year in sales at the Beer Store will be allowed to purchase a “Class F” share for $100—this share will allow them to stock their beers in Beer Store locations at a reduced listing fee. Ontario breweries responsible for more than $5 million a year in Beer Store sales will qualify for “Class E” shares, priced at $1,000, and pay the same listing fees as current owners.
When it comes to board representation, Class E shareholders will get two seats and Class F holders will get only one. Because current owners will retain a collective 12 seats, critics worry that smaller breweries will face a constant uphill battle to implement change and have their concerns addressed.
To further sweeten the pot for Ontario breweries with annual Beer Store sales of under $1 million, the Beer Store will begin allowing qualifying breweries to, at no cost, list two brands in the five Beer Store locations closest to them and to list in other locations at a reduced fee. Brewers will also be able to swap out current listings for seasonal releases at no additional cost.
While the Beer Store feels that this approach will increase sales of local beer, critics claim the problems related to local beer distribution can be solved only by changing Ontario’s distribution structure so that retailers other than the Beer Store and LCBO can sell beer throughout the province.
In a statement earlier this afternoon, Cam Heaps, chairman of the Ontario Craft Brewers, a group consisting of over 45 breweries, said that the recent news was “surprising,” considering that the province’s largest collective of small breweries wasn’t consulted about the plan. As things stand now, they are not satisfied.
“It certainly does not address our major issue of improving access for consumers. Before we can comment, we need more information; we have a lot of questions.” says Heaps. “We were not consulted on any of this and as such, we just do not have enough information to comment right now.”
For the time being, small Ontario breweries are left with many questions—and Ontario’s beer drinkers remain at the mercy of a system that offers them only two options for buying beer.