jsburbidge (![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
jsburbidge) wrote2014-12-11 12:59 pm
jsburbidge) wrote2014-12-11 12:59 pm
LCBO and the Beer Store
In the wake of the Clark recommendations regarding the handling of what used to be "Brewers Retail", and then the subsequent publication of the details of the 2000 agreement between the Brewers and the LCBO, there's been a push to boycott the Beer Store, and beers brewed by the 3 international breweries who run it.
The fundamental argument is that profits made by the LCBO go to the province and feed back into services, whereas profits at the Beer Store go to the foreign-owned breweries. On its own, this isn't compelling; preferring public over private sales outlets where there is no compelling public interest in the government being in the business is pretty well a non-starter; and there's no push not to buy beer directly from local breweries such as Mill St. or Bellwoods.
The major problems that have been listed are specific to the way the Beer Store is run.
First, it's not a private enterprise engaging in level-playing-field competition. It's very nearly a monopoly. As Clark pointed out, the government is licensing a monopoly for which the BR is paying nothing (he recommends that they should be charged a reasonable sum for it by the province, and be prevented from passing on the cost to the consumer (easy to do because the LCBO sets the prices the breweries sell by for any beers also listed with the LCBO)).
That monopoly is run to avoid it looking as though it is profitable by funnelling revenues back to the owners by mechanisms other than declaring a profit.
Secondly, it engages in discriminatory pricing against smaller breweries, charging listing fees which act as barriers to access. (It used simply to refuse to carry any beers not made by the owners: they had to change that after a successful challenge under the Free Trade Agreement with the US by an American brewer.)
Thirdly, the agreement between the LCBO and the BR is clearly in restraint of competition (and so against public policy) and has in fact been challenged in court on that basis under the Competition Act. That agreement also seems to involve no consideration flowing to the LCBO and is therefore not an enforceable contract -- it could be voided at any time. (Clark recommends changes to it such as allowing the LCBO to sell twelve-packs.)
Fourth, with a very few exceptions, the beers produced by the three owners are, to put it mildly, not good beer. The obvious exception in Canada is beers by Uinibroue (owned by Sleeman, which is owned in turn by Sapporo). There are also some small breweries owned abroad by InBev which have retained quality after acquisition, such as Goose Island, acquired by Anheuser-Busch InBev in 2011, and Leffe (an "abbey" beer actually brewed under licence to the abbey at the Stella Artois brewing facilities). Note that Bass, which is Anheuser-Busch InBev's flagship brand in the UK, is not what it used to be. There is really nothing redeeming to be said for Molson and Labatt products.
In fact, there are a limited number of good beers carried by the Beer Store at all (more of the effect of those barriers to entry). I'm partial to IPAs: the only really good ones carried at the Beer Store are Boneshaker (produced by Amsterdam) and Mad Tom IPA / Twice As Mad Tom IIPA (Muskoka Brewery). The LCBO also carries (at present) Great Lakes Brewery's Lake Effect IPA and Central City Brewers' (BC) Red Racer IPA, and carries many more during the summer from foreign and local craft brewers. (At present, it's more heavily invested in stouts, porters, and a few winter ales and barley wines -- none of which you will find at the Beer Store; the pricing barriers make seasonal brews uneconomical.)
Finally, the Brewers' Retail group is dishonest in its self-presentation -- note the campaign against selling beer in alternate locations suggesting that corner store operators were more likely than Beer Store operators to flout the laws restricting the sale of alcoholic beverages to minors.
So I'd support the general boycott. Note that aside from the obvious major labels (Sapporo. Sleeman, Molson, Labatt, Coors) there are a number of subsidiary labels which should be avoided: Unibroue, Alexander Keith's, Lakeport, Kokanee, Creemore Springs, Shock Top, Stella Artois, Leffe, Bass, Charrington, Hoegaarden, Beck's, Budweiser, Löwenbräu, Rolling Rock, Spaten, and St. Pauli Girl. In addition Corona, Miller and Heineken are marketed by Molson in Canada.
The fundamental argument is that profits made by the LCBO go to the province and feed back into services, whereas profits at the Beer Store go to the foreign-owned breweries. On its own, this isn't compelling; preferring public over private sales outlets where there is no compelling public interest in the government being in the business is pretty well a non-starter; and there's no push not to buy beer directly from local breweries such as Mill St. or Bellwoods.
The major problems that have been listed are specific to the way the Beer Store is run.
First, it's not a private enterprise engaging in level-playing-field competition. It's very nearly a monopoly. As Clark pointed out, the government is licensing a monopoly for which the BR is paying nothing (he recommends that they should be charged a reasonable sum for it by the province, and be prevented from passing on the cost to the consumer (easy to do because the LCBO sets the prices the breweries sell by for any beers also listed with the LCBO)).
That monopoly is run to avoid it looking as though it is profitable by funnelling revenues back to the owners by mechanisms other than declaring a profit.
Secondly, it engages in discriminatory pricing against smaller breweries, charging listing fees which act as barriers to access. (It used simply to refuse to carry any beers not made by the owners: they had to change that after a successful challenge under the Free Trade Agreement with the US by an American brewer.)
Thirdly, the agreement between the LCBO and the BR is clearly in restraint of competition (and so against public policy) and has in fact been challenged in court on that basis under the Competition Act. That agreement also seems to involve no consideration flowing to the LCBO and is therefore not an enforceable contract -- it could be voided at any time. (Clark recommends changes to it such as allowing the LCBO to sell twelve-packs.)
Fourth, with a very few exceptions, the beers produced by the three owners are, to put it mildly, not good beer. The obvious exception in Canada is beers by Uinibroue (owned by Sleeman, which is owned in turn by Sapporo). There are also some small breweries owned abroad by InBev which have retained quality after acquisition, such as Goose Island, acquired by Anheuser-Busch InBev in 2011, and Leffe (an "abbey" beer actually brewed under licence to the abbey at the Stella Artois brewing facilities). Note that Bass, which is Anheuser-Busch InBev's flagship brand in the UK, is not what it used to be. There is really nothing redeeming to be said for Molson and Labatt products.
In fact, there are a limited number of good beers carried by the Beer Store at all (more of the effect of those barriers to entry). I'm partial to IPAs: the only really good ones carried at the Beer Store are Boneshaker (produced by Amsterdam) and Mad Tom IPA / Twice As Mad Tom IIPA (Muskoka Brewery). The LCBO also carries (at present) Great Lakes Brewery's Lake Effect IPA and Central City Brewers' (BC) Red Racer IPA, and carries many more during the summer from foreign and local craft brewers. (At present, it's more heavily invested in stouts, porters, and a few winter ales and barley wines -- none of which you will find at the Beer Store; the pricing barriers make seasonal brews uneconomical.)
Finally, the Brewers' Retail group is dishonest in its self-presentation -- note the campaign against selling beer in alternate locations suggesting that corner store operators were more likely than Beer Store operators to flout the laws restricting the sale of alcoholic beverages to minors.
So I'd support the general boycott. Note that aside from the obvious major labels (Sapporo. Sleeman, Molson, Labatt, Coors) there are a number of subsidiary labels which should be avoided: Unibroue, Alexander Keith's, Lakeport, Kokanee, Creemore Springs, Shock Top, Stella Artois, Leffe, Bass, Charrington, Hoegaarden, Beck's, Budweiser, Löwenbräu, Rolling Rock, Spaten, and St. Pauli Girl. In addition Corona, Miller and Heineken are marketed by Molson in Canada.