Now that festival season is pretty much over, we can start looking back on the year. This is the year when the Beer Store monopoly story broke, when Left Field Brewery faught for and earned the right to serve at beer festivals despite having no brewhouse of their own (at the time), and when it became permitted to sell locally-produced wine at farmers markets (but not beer!). So with that in mind, I’m republishing this article, written for Windsor Independent, about how alcohol regulations in Ontario are disproportionally harmful to the local beer industry.
Ontario’s laws demonize humanity’s favourite drink
The Raise a Glass to Ontario Act, introduced by PC MPP Todd Smith , would allow Ontario breweries to sell their products in each other’s stores. If it passes, it will be a distinct change of pace from most of the province’s alcohol laws, which seem intent on limiting the growth potential of the craft beer industry and keeping beer lovers unhappy.
In the context of the growing support for the privatization of alcohol sales, the bill could be seen as either a reasonable compromise or the first step in the right direction. The first amendment is as follows:
1. A manufacturer of beer or cider may sell, in stores it owns and operates, its own beer or cider as well as that of other manufacturers of beer or cider.
I think this is a great idea. My second favourite thing about the craft beer industry, after the beer, is how supportive they are as a community. In general, brewers happily cross-promote and have no reservations about expressing the virtues of beers produced by their competitors (providing those beers are well-made) and this is a component of craft beer culture that has held true to my experience in every province and country I’ve visited.
The bill would allow brewers to showcase the Ontario-crafted beers that they love, including rare or special occasion beers, and to distribute new beers more easily to test the market before applying for shelf-space at the LCBO or paying the prohibitively high listing fees at the Beer Store. I wouldn’t be surprised if the bill inspired many breweries to invest in expanding their on-site retail stores into large specialty beer stores.
This is, of course, if the Raise a Glass to Ontario Act is passed. Unfortunately, the province’s track record with beer laws until now has been piss poor.
The sheer number of start-up breweries out there (more than 100 in Ontario in the last few years alone) inspires a lot of collaboration. Many head brewers learned the ropes working at other breweries. Many small breweries ship their kegs on trucks owned by the bigger crafters like Beau’s, Mill St. and Wellington. Canning lines are few and far between. And, most intimately, many start-up breweries are contract brewers: they make their beer in somebody else’s facility.
The cost of opening a brewery is somewhere in the $1 million area . That’s a big investment to make before you can even test out your first product. That’s why most small breweries start out as either nanobreweries, like Motor Craft Ales, or contract brewers.
Since few craft breweries keep their brewhouse at capacity 7 days a week, they can help to pay off that massive capital investment by renting out their unused capacity to others, so many of Ontario’s producers actually work together on a day-to-day basis, sharing equipment, trucks, knowledge and maybe even yeast.
Yet for some reason there’s a stigma against contract brewing, which has led to the Alcohol and Gaming Commission of Ontario (AGCO) enforcing a law which excludes them selling their beer to Special Occasion Permit (SOP) holders such as beer festivals, one of the best ways for start-ups to reach new customers. The law only serves to hurt the smallest of Ontario’s brewing companies, which seems to be a trait shared by most of Ontario’s beer laws.
(It’s interesting to note here that contract brewers, because they don’t own their own brewhouses, also can’t open an on-site retail store, so their options are very limited.)
To privatization or not to privatize
For some reason the stigma against beer among law-makers extends beyond just contract brewers, for example: as of May 1st, Ontario wineries can now sell their wines at farmer’s markets. Why not breweries? Many craft brewers have taken cues from the wine industry, and many craft beer drinkers prefer to buy in single bottles anyway. It’s about time we do away with the “wine is classy, beer is trashy” stereotype.
The debate over privatization of alcohol sales is being most visibly played out in the PR smear campaign between the Beer Store and the Ontario Convenience Store Association (OCSA), but the black-and-white narrative they’re shaping is not the reality of the situation.
The question is not “should we sell beer in convenience stores?” – as the Raise a Glass to Ontario Act shows, there are plenty of different ways to reform the province’s alcohol retail system. Neither would privatization be a death sentence to the Beer Store – it will remain a distribution machine for its owner breweries (AB-InBev, Molson-Coors and Sapporo).
And let’s not blame the LCBO for this. Most of the stupid laws that hurt local brewers as well as craft beer drinkers fall under the jurisdiction of the AGCO. The LCBO is primarily a retail chain and, in my opinion, a really good one. It has its flaws, but at least the LCBO actively responds to changing consumer interests, unlike the Beer Store.
To privatize alcohol sales in Ontario does not mean the end of the Beer Store or the LCBO. It just means that our beer, wine and cider industries can grow on their own terms, sell directly to their audiences, and leave the LCBO and the Beer Store do what they do best.