Change is brewing for the Beer Store, warns Finance Minister Charles Sousa.
In the wake of lawsuits challenging the private monopoly — which is owned by Labatt, Molson, and Sleeman — Sousa was asked Wednesday about the Liberal government’s next steps.
“I’m not going to comment on legal proceedings, but I am going to proceed with redesigning and reassessing the Beer Store,” Sousa said as he went into a cabinet meeting where Premier Kathleen Wynne’s privatization guru Ed Clark briefed ministers on the matter.
“We’re going to maximize the benefits to consumers and protect the industry at the same time. We’ll review the whole thing,” said Sousa, who will unveil changes in the March budget.
“There’s inherent value in the Beer Store and we want to make sure we maximize that.”
Sousa’s comments came as a would-be independent retailer is going to court to strike down a section of the Liquor Control Act that makes the Beer Store monopoly status the only private firm allowed to sell beer directly to consumers without brewing it on the premises.
Michael Hassell, a lawyer and co-owner of Barge Craft Beer Distribution, has given the provincial government 60 days’ notice of his legal action before the Ontario Superior Court.
At the same time, a $1.4-billion class action suit against the Beer Store and the Liquor Control Board of Ontario has been filed by Burlington pub owner David Hughes on behalf of anyone who has bought beer in the province since June 2000.
That was the date of deal between the brewers and the government-owned LCBO, which was not made public until the Toronto Star revealed it last month.
Under the accord, the LCBO can sell only six-packs, leaving more lucrative 12- and 24-packs to the Beer Store, and bars and restaurants must buy most of their ales and lagers directly from the brewers for higher prices than consumers pay.
Restaurants Canada, which represents 30,000 businesses across the country, has complained to the federal Competition Bureau about the arrangement.
Both the Beer Store and the LCBO are reviewing the class-action suit and plan to defend themselves in court.
In a bid to appease the Liberals, Labatt, Molson, and Sleeman — whose owners are based in Belgium, the U.S., and Japan — last week offered to sell a minority stake in the Beer Store chain to Ontario craft brewers.
But that surprise move, which would help microbreweries promote their products in the company’s 448 outlets, appears to have fallen flat with Queen’s Park.
In response, Sousa said Wednesday the government is looking at “alternatives” for increased distribution of craft beers, particularly on a regional basis.
“I recognize what the public is sensitive to,” he said, adding he wants to “promote greater distribution” of beer. “This really should be a consumer choice and the LCBO is doing its bit.”
Still, he emphasized the government recognizes that the foreign-owned brewing giants employ thousands of Ontario workers and pay a lot in tax to the province.
“Everyone is in on this together.”
The minister spoke with reporters before a 20-minute presentation to cabinet from Clark.
The former TD Bank chair is leading the premier’s advisory council on government assets and has recommended the province charge the Beer Store a “franchise fee” that the companies would not be allowed to pass on to consumers in the form of higher prices.
Should the brewers refuse, he has said the government could strip them of their monopoly.