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FeedShould we break up the Beer Store monopoly and embrace competition?
Against the competition: Ted Moroz, president of the Beer Store and Brewers Distributor Ltd.
Advocates for selling beer through corner or grocery stores claim it will lower beer prices and increase choice for consumers. But is this true?
Most people get the idea — from shopping in the U.S. and Quebec where prices are often lower — that corner or grocery store beer sales produce cheaper beer prices. But beer prices in these markets are not the result of the retail system. It is their tax rates. Quebec’s provincial beer taxes are half that of Ontario, and beer taxes in the U.S. are dramatically lower.
In Ontario, provincial taxes on a case of 24 cans totals $12.10, in Quebec they are only $6.20. Without a massive reduction in Ontario’s beer tax rates, selling beer in corner or grocery stores is unlikely to produce lower beer prices. In fact, prices are more likely to rise as the cost of delivering beer to thousands of small convenience stores increases distribution costs and drives up wholesale prices.
What about product selection? The Beer Store is a dedicated beer retailer that sells more than 350 brands in more than 900 different package sizes from 90 domestic and import brewers. Any brewer can pay a one-time listing fee that averages $178 per store and freely put their beer in any Beer Store location. No brewer is refused access. As a result, the typical Beer Store outlet offers a selection that no corner or grocery store could ever match.
Space-constrained corner stores would focus on high-volume big-name brands as would grocery stores, whose principal business is selling groceries, not beer. The packaging collected through the Beer Store’s deposit return system is more than half what the entire Ontario blue box collects. If beer goes to corner stores, where does all this waste go, and who pays for it?
Last but not least, every Beer Store employee is trained to identify and refuse service to minors and intoxicated people. Last year we requested identification from 4.2 million people. Are Ontarians well served by the Beer Store? We certainly think so.
Against the Beer Store monopoly: Columnist Stephen Beaumont
, founder of the World of Beer blog.
For the entirety of my adult life, the retailing of beer in Ontario has remained stuck in the Dark Ages. On the one hand, we have the LCBO, a state- operated outlet, which once sold beer through little forms that customers filled out while referencing a list of products and numbers, while on the other hand, we have the Beer Store, a lumbering “co- operative” controlled by our two largest brewing companies, Molson and Labatt, neither wholly owned by Canadians.
Yet while the LCBO has at least evolved, expanding selection and involving consumers, the Beer Store remains all but stagnant, tirelessly promoting the wares of the two dominant companies at the expense of variety. The Beer Store defenders might argue that its doors are open to any brewery that wishes to pay the listing fees, but there is a big difference between allowing a brand access and allowing it to be seen, the latter of which is poorly accomplished through the classic “wall of bottles” that acts as the display of brands in most of Beer Stores.
Still, lack of selection might be forgivable if the Beer Store at least provided a decent beer shopping experience, but sadly, that is far from the truth. Beginning with the olfactory assault of stale beer that greets the shopper on arrival, through to the eyesight-straining wall of bottles or, even worse, ice cold walk-in maze of cases, and ending at the often clueless, sometimes openly belligerent sales staff. Most Beer Stores provide as dreadful a shopping experience as possible. That the recent opening of the Beer Store’s new Beer Boutique in Liberty Village was hailed as a newsworthy event is a testament to how truly awful the typical Beer Store remains.
The most damning aspect of the Beer Store is that breweries not named Molson or Labatt must rely upon their biggest competitors to sell their products. That is why international investors roll their eyes in disbelief and why the continuation of the Beer Store near-monopoly is indefensible.
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Reader Comments:
www.FreeOurBeer.ca - We can give Ontario shoppers better choice and convenience without breaking up the Beer Store. No question it is antiquated. The system that brought the Beer Store and LCBO into being was created when Al Capone and his gang were in their heyday in Chicago.
According to Angus Reid Public Opinion 67% of people agree that it's time for modernization. We can do that by just opening up the system to more retailers like chain convenience stores. Employees at these stores go though rigorous training and testing when hired, get checks every quarter and are mystery shopped six times a year.
The Beer Store throws up the idea doing so is risky and that their internal staff training is somehow the best. However, independent tests have shown that convenience stores are better at checking for age than the Beer Store or LCBO.
Lastly on price, the Beer Store throws up the spectre of higher prices - if more retailers were allowed to compete. You'd expect a member of a duopoly to say that. How about we let the market and consumers decide. People can support modernizing Ontario's alcohol retailing system at www.FreeOurBeer.ca
Many other jurisdictions in Canada and the United States allow private alcohol sales and the model works successfully for both the consumer (convenience, choice, competition) and public safety (both government and private compliance checks; fail to be diligent about age verification, lose your business).
New York State and Quebec are just two examples of this.
In Ontario, convenience stores have become so successful at verifying age of tobacco customers that Health Canada has recognized these very positive compliance rates.
Third party surveys and shops have proven that the average convenience store is better at checking age then either the Beer Store or the LCBO.
Most important, there are hundreds of LCBO Agency Stores being operated across rural Ontario by private enterprises, mostly convenience stores, and they have done an excellent job of bringing both service and age verification to their communities.
Which LCBO outlets were open this past holiday Monday, or most other statutory holidays during the year for the convenience of their customers?
Definitely not the government run outlets, but Agency stores that are committed to providing good service.
It is time to put the customer first, something governments and monopolies never have figured out.
It is time for competition! Prices should go down. No more monopoly!
I think that there is a place in Ontario for the Beer Store and the LCBO when it comes to Beer sales. The point, deliberately missed by mister Moroz, is convenience. I understand that he wants to protect the monopoly as it exists and I understand that the Union want to protect their high paying jobs but as a consumer, I should enjoy the convenience of buying beer and wine in the next corner rather than whereever the Brewer's Retail (or LCBO)decides to put a store. It seems like such a radical concept to someone who has never been outside of Ontario, but in most of the world, including Europe and most States, its the reality. Recycling is another red herring. Bottles purchased at a convenience store can be returned at the Beer Store in the same way that LCBO products are returned there now. It makes me smile when people like Mr. Moroz trot out the under age drinking bogeyman. Stores are well capable of handling ID checks and they do it today. In addition, I defy him to show that Quebec has a problem with kids buying beer at corner stores or that this is a problem in Germany. We are adults and should be treated as such by our Government. The restrictive laws controlling beer and wine sales are vestages of prohibition and need to go away.
I am Canadian currently living in the States. I enjoy any beer that you can buy in Ontario at about half the price. Last year I went to The Beer Store and bought 3 cases of Domestic Lager. The bill came to $126!. I was shocked and I told the cashier that it was a rediculous amount of money for a regular beer. The man had the audacity to tell me "well someone has to pay for my salary". I could not believe what he said but it was the truth. I am sure that the cashier gets paid 5 times as much and works 1/10th the amount of a cashier at Timmy's. Wake up Ontario and join the rest or world. Not only is the Beer Store a Monoply owned by foreign companies, it is also controlled by unions. I'm all for paying taxes but the reason the beer in Ontario is so expensive is not because of the taxes. This is the most corrupt and collusive operation going on in North America and you are all just getting suckered. The Ontario Homegrown hard working Craft Brewers don't stand a chance in your market. Canadian's used to be proud to say that there beer is better than that American beer. Well that is just a myth. The #1 selling beer in Ontario is Coors light...yummy. And the recyling....do you think there're profiting from that? Ha, I could rant all day...get some backbone.. Wake up and FREE your BEER.