You have to wonder what the people who run the Beer Store have been drinking.
Obviously spooked by a wave of public criticism and pressure from the Ontario government, they invited the same craft brewers they have shoved into a corner for years to buy shares in the company and take a handful of seats on its board of directors. And the organization promised to become “more transparent,” whatever that means.
The Beer Store clearly thinks this is a momentous change, judging by the enormous newspaper ads it took out to trumpet the news (thanks for that). But to say it all fell flat would be an understatement.
Ontario’s craft brewers should, presumably, have been delighted. Instead, they immediately saw through the offer to buy a minority ownership stake and occupy three of the 15 seats on the Beer Store’s board. It’s all just a “smoke screen,” they said, to distract attention from the real issue around the province’s indefensible retailing monopoly: why can’t there be real competition in the beer market?
The government wasn’t impressed, either. It wouldn’t even comment on the idea until a panel it set up to recommend changes in beer and wine retailing comes in with its final report.
No wonder no one was raising a glass to this idea. The foreign-owned Beer Store (a consortium of Labatt Brewing Company Ltd., owned out of Belgium; Molson Coors Canada, controlled from Colorado; and Sleeman of Japan) is offering largely meaningless concessions to the craft brewers in hopes it can ward off more fundamental change that would really threaten its privileged position.
The real issues are much bigger. As laid out in the past few weeks in the Star by Queen’s Park columnist Martin Regg Cohn, the Beer Store benefits mightily from a sweetheart deal with the province that cements its dominance over the market for beer while hamstringing its only competition for beer sales, the government-owned LCBO. To add insult to injury, the big brewers safeguard their near-monopoly by carefully cultivating – and financing – the province’s political parties.
Fortunately, the craft brewers aren’t buying into the Beer Store’s pitch, and signs are the government will continue to press the organization for a bigger cut of the proceeds by imposing a hefty “franchise fee.”
The ultimate goal should be – as this newspaper has argued now for 29 years – to bring real choice and convenience to Ontario consumers. That can be done not by tinkering with the Beer Store’s archaic structures, but by freeing up the LCBO to sell more beer and allowing corner stores to sell suds as well.
There’s little political appetite for such fundamental reform. But in the meantime, no one should let the Beer Store get away with such a transparent PR move.