Beer Sore

06 January 2015
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Beer Sore

Yesterday evening we were quoted in a Spectator article concerning the Beer Store. Check it out!

Here's the thing- "Beer Store" is really weird.

(Weirder still, now that they've dropped the "The")  

And it is inherently unfair.

(A lot of ink has been spilled on the topic of unfairness already, so I won't get into all that here.)

It ought to change. And you know what? My bet is that change is coming to the Beer Store, whether the province forces it upon them or not...

...and I'm cautiously optimistic about that fact.

But, that said, change isn't easy.

I know that to many people, when small brewers express any kind of enthusiasm for Beer Store, even if it is to just point out that they think that it is the lesser of two evils, it seems like a form of Stockholm Syndrome... and maybe there is some truth to that- but it goes deeper. If small Craft Brewers and Beer Store (doesn't it seem like it's shouted when the "the" is dropped? Beer Store. Beer Store! Fabbbrric Land. FABRIC LAND!) were in a relationship on Facebook, the status of that relationship would most definitely be "It's Complicated." (And, sadly, the only other friend Craft Brewers would have would be the LCBO. Well, and a bunch of friend requests from Dial-A-Bottle companies.)

See, since every single brewery in Ontario post-1927 developed in an environment where there was such a thing as a "Beer Store", some have evolved to thrive under its particular conditions. Which is kind of an obvious thing to say. Of course, right? No matter what particular conditions an environment contained, you could expect to see business models emerge that take advantage of the situation. Even an environment of complete prohibition only created...  unique sorts of brewing entrepreneurialism...

...now romanticized for your enjoyment, by two percent owner of Beer Store!, Sleeman Breweries, an arm of Sapporo of Japan.

One example of how some small brewers do well under Beer Store!:  Kegs are really expensive. Our fleet of beautiful stainless steel kegs were, far and away, our largest single start up cost. It will take about 3-4 sales and returns of each keg before we've paid off that initial keg purchase cost. And kegs do sometimes go missing. They're a major investment, and source of loss. But BEER STORE! allows brewers, small and large, to rent their kegs. This is a major advantage to a brewery that is modeled to take advantage of it. Ha. Which is, again, a silly thing to say. But it does sum up my point:  BEER STORE!! is a great opportunity to breweries who are able to take advantage of it. Pro-Beer Store advocates and employees make this case often, and of course, they are right. But just because they are right, doesn't make it any more fair. It is still an inherently messed up and unfair system. And just because some businesses have evolved to thrive in this particular environment (where they had little choice but to) isn't a terribly compelling argument for the continuation of that environment.

But- what to do about it? That's the question now. And there is no shortage of answers. Personally, I'm pro-baby, anti-bathwater. I think there are real good things about the current set up, messed up as it is. 

To quote Jeff Newton, President of Canada’s National Brewers (CNB), representing Labatt Brewing Company Ltd., Molson Coors Canada and Sleeman Breweries Ltd., who jointly operate the Beer Store​:

"The bottom line is this: when you’ve got Canada’s most efficient beer retail system offering the lowest prices and widest selection, in addition to a recycling program that diverts more than two billion alcohol containers from Ontario landfills every year, we need to be careful about how we 'fix' it."

In his last statement: "...a recycling program that diverts more than two billion alcohol containers from Ontario landfills every year, we need to be careful about how we 'fix' it." Mr. Newton and I are in complete agreement. The beer store is messed up- which is another way to say it's unique- there is nothing else quite like it anywhere in the world, and I'd like to hold onto the positive aspects of this singular system. We've earned them, dammit, through these many years of (mostly) quiet suffering. The Beer Store may be a bizarre thing, but it's our bizarre thing- a historical oddity 88 painful years in the making. There will never be another Beer Store- we need to be careful about how we fix it.

     

Nostalgiempörung- German, Made-Up : a simultaneous feeling of warm nostalgia and simmering outrage, inspired by going to Beer Store!

Photo by LazyMonkey. Used under the Creative Commons License. 

 

But lets not stop there. The Beer Store's near-monopoly is just one (admittedly large) part of a whole province-worth of old laws and legislation that needs to be looked at and reformed.

 

A perfect example: This summer was saved by BEER STORE. That's right. BEER STORE RESCUE SUMMER. YOU WELCOMEHow? Well, you may recall a big kerfuffle this summer, when, without warning, the AGCO promised to enforce a long-ignored rule that plainly stated that Contract Brewers could not sell to Special Occasion Permit Holders. This sent contract brewers, such as ourselves, into a panic as this meant we could not participate in beer festivals! Of course, this also sent beer festivals into a tizzy, including our own Because Beer. The entire summer of beer festivals (and festivals pouring beer) across Ontario was under threat. And it was then, in our darkest hour of need, that the Beer Store stepped up with a work-around! It's because of that work-around that we were able to debut at the inaugural Because Beer. It's because of that work-around that we could pour our beer at Supercrawl.  It is perhaps difficult for us to over-emphasize how important it was for us to be able to bring our beer to these vital Hamiltonian events. And we owe it all to the Beer Store. BEER STORE SMASH PUNY RED TAPE. 

 

But- Why? Why must the Beer Store be necessarily unnecessarily involved in that whole transaction? Why does this rule exist? Why does the province see fit to limit the abilities of contract breweries as compared to bricks-and-mortar breweries? What is the rationale? Don't get me wrong, at this point I'm not even attempting to debate the merits of the rule, simply looking to understand the logic behind it- if there is any. And there are more perplexing head-scratchers, a good example: what is the rationale of limiting the abilities of small brewers v.s. big brewers? A large craft brewer like Mill Street is able to bring product brewed at a separate facility into their brewpub retail store and sell it there. A smaller brewer is expressly forbidden from doing the same. The deciding factor: production volume. Why?? Does the province specifically wish to give a competitive advantage to larger brewers? And if so, why? And while we're on the subject, does the province wish the give preferential treatment to Wine v.s. Beer? If not, then what is the rationale for The Wine Rack, The Wine Shop, and wine being offered in grocery stores and farmers markets, when brewers aren't allowed similar opportunities?? AND WHY DOES THE PROVINCE CONTINUE TO ALLOW A TRIUMVIRATE OF HUGE BREWERS EXCLUSIVITY ON OPERATION OF BEER RETAIL STORES?!?

My primary points are these: 

  • The Beer Store isn't exactly pure evil incarnate, and has some value to offer Ontario,  & 
  • The Beer Store's near-monopoly is just one part of a legislative mess that needs to be looked at and reformed. We need to ask ourselves: "What is it we want our beer laws to do?"

...and I'm worried that these points will get lost in the all noise from the Beer Store lynch mob. Lets make sure that the hard work of legislative reform gets done. Not just for the big interests, but for all Ontarians. The Beer Store V.S. Convenience Store argument was, and is, a false dichotomy. We have more options. As many options as we are willing to entertain! (Growler Fills & Farmers Markets are 2 of my favorite low-hanging fruits) The Beer Store will fight to defend it's turf, the Canadian Convenience Stores Association will fight to get a piece of the action, and the Province will demand their cut, but who will fight for the options that don't have a large and powerful group standing behind them because they stand to make a lot of money?

 

  •  We'll have to.
  • I guess.

 

Cheers,

-The Garden Brewers

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