A Beer Store outlet in Oakville, Ontario.Deborah Baic/The Globe and Mail
All kidding aside, The Beer Store has got to go.
We wrote satirically in this space last weekend about the private company that controls beer sales in Ontario thanks to a generous act of the Legislature. The near-monopoly's hilarious central-planning logic – We expand choice by limiting it! Competition hurts consumers! – is one of the country's great running jokes.
But the joke is getting old. Even The Beer Store – which is owned by two foreign-held brewers (Labatt and Sleeman) and one that is 50 per cent Canadian (Molson Coors) – knows its time is up. You could see it last week when the company announced out of the blue that it will graciously allow all Ontario brewers to buy a tiny percentage of its ownership, and will also give them a carefully orchestrated minority of the seats on its board of directors.
Ontario's small breweries should band together to refuse the offer. It strikes us as cynical. The Beer Store is ostensibly selling ownership but is, in fact, slyly asking for buy-in, and therefore validation. It is sweetening its deal with the devil by offering cheaper listing fees to those who sell their souls, but that ignores the fact that those fees should not exist in the first place. No matter what, Labatt and Molson will always control half the seats on the board, thereby nullifying any threat to the status quo.
On the plus side, the offer also strikes us as a retreat. There is change in the wind. Restaurants Canada, a food-service industry group, has asked the federal Competition Bureau to investigate its claim that The Beer Store restricts competition and inflates wholesale prices. Ontario politicians are slowly beginning to think twice about legislation that limits consumer choice; they are also starting to feel uncomfortable about forcing plucky homegrown brewers to sell their ales and lagers through a retail chain owned by massive overseas conglomerates.
The Beer Store feels the breeze on its face; hence its plan to, in its own words, "bring more fairness to selling beer in Ontario." The once-invincible retailer has gotten the message that it can't continue as is, so it has acted pre-emptively by offering to change while it might still be able to do so on its own terms. If the smaller brewers hold out, however, they could get a better deal. Or perhaps even the best deal of all – no more Beer Store.