Beer Store opens ownership to all Ontario-based brewers

WATCH: How do independent brewers really feel about the Beer Store’s ownership offer?

TORONTO – Changes are coming to Ontario’s Beer Store that will allow all locally-based brewers to own a piece of the privately-run retail outlets.

A statement released by the company on Wednesday said it has also changed its policies to make it more affordable for small Ontario-based brewers to sell their products on Beer Store shelves.

“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,” said Beer Store president Ted Moroz in a media release.

But the company is adamant the move is not an attempt to prevent being charged a government fee for its virtual monopoly on beer sales in Ontario.

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“This is not related to that at all,” Jeff Newton, a spokesperson for the Beer Store said.

An advisory panel set up by the Ontario government and chaired by TD Bank CEO Ed Clark recommended the province charge the Beer Store for its monopoly.

Finance Minister Charles Sousa’s office issued a statement  following the Beer Store’s announcement Wednesday saying Clark’s panel would consider the Beer Store’s offer “in the context of its work.”

“In the fall economic statement, we expressed support for Ed Clark’s initial recommendations to improve transparency at the Beer Store, provide Ontarians with a fair share of profits and extend the sale of 12-packs of beer into LCBO stores,” Susia Heath, the press secretary for Sousa, said.

READ MORE: Critics say the new Beer Store deal is ‘window dressing’ to guard monopoly

Small Ontario brewers, those who sell fewer than one million litres each year at the Beer Store, will no longer have to pay a listing fee when stocking two of their products at the five Beer Store locations closest to their brewery. They would pay $100 to become part owners and receive Class E or Class F shares.

“Beyond those five stores, small brewers will be able to list the same two products at any additional Beer Store location at reduced listing fees, paying only the per-store fee,” the company said.

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Small brewers will also be allowed to introduce seasonal brands throughout the year and swap out a new or existing brand listing and replace it with a seasonal brand twice a year at no additional cost.

Under the new ownership deal, larger Beer Store owners with annual store sales over five million litres/year, will pay the exact same fees as the current owners to sell their beer in the Beer Store.

VIDEO: Half of Ontarians believe The Beer Store should lose its monopoly

Meanwhile, smaller brewers will now pay discounted fees as they will not be required to fund certain costs relating to capital investment in new stores or pension and benefits plans.

The announcement comes just a month after a Toronto Star investigation revealed a secret deal exists between the provincially-run LCBO and the Beer Store that limits competition between the two alcohol rivals.

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A 10-page document obtained by The Star indicates a deal was signed in June 2000 in which the LCBO agreed not to sell beer in packages of more than six bottles or cans.

READ MORE: Restaurant group urges probe into ‘sweetheart’ LCBO, Beer Store deal

It also agreed not to sell to restaurants and bars any of the major brands not carried in its regular stores.

Restaurants Canada, an industry association representing 30,000 restaurants, bars, caterers and their suppliers, said the deal between the LCBO and the Beer Store means its members often pay “ridiculously” higher prices than consumers.

The province has promised to investigate the alleged “sweet deal” between the two companies and is looking at making changes.

READ MORE: Premier Wynne calls LCBO-Beer Store deal unfair, promises change

The Beer Store, the commercial name for Brewers Retail, was owned by a consortium of Ontario-based brewers when it was set up in 1927, but is now owned by Molson-Coors of the United States, AB InBev of Belgium and Sapporo of Japan.

It currently operates 448 retail stores across Ontario.

With files from The Canadian Press

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