Government Regulation & Beer Sales: Controversy Brewing

Big pharma… The corn lobby… The dairy lobby… The beer lobby?

Prohibition 2.0?

An interesting triage of events has happened locally recently and it has the beer industry, and beer fans, enraged.

1. Steam Whistle outed from Rogers Centre

The Rogers Centre (formerly known as The Skydome), home of Toronto sports teams such as The Toronto Blue Jays (Major League Baseball) and The Toronto Argonauts (Canadian Football League) chose not to renew the contract of Steam Whistle brewing, which is located across the street from the stadium, after only one season. Steam Whistle was only available at ONE concession stand, on the 100 level last season. This in itself is reason to be irritated. Then, Steam Whistle got in trouble when they responded to fans on Twitter who asked where in the stadium the beer was located. Their contract with the stadium said that they couldn’t advertise any sort of association with the ball club. My question is: Is it advertising if you’re answering a question? It seems that even Rogers Centre own staff didn’t know at the time whether social media mentions violated the contract or not.

According to the articles I’ve read, Blue Jay’s management has been evasive about responding to media to provide more context.

Labatt, itself owned by the world’s largest beer company based in Belgium, owned the Jays for a number of years but even that wouldn’t have been a good enough reason for exclusivity. The Coors Field in Denver was selected as one of the Top 10 Baseball Stadiums for Craft Beer by The Daily Meal. Is it supply and demand? Maybe somewhat. More likely, money talks.

For more information read and sign the petition Provide Ontario Craft beer at the SkyDome, created by my local bar neighbour, and read the attached articles. The one I referenced most to share the information above was Getting crafty about beer from last week’s issue of Now.

2. Contract brewers no longer be allowed at Ontario beer festivals

A contract brewer is a beer company that brews at another brewery. This is common when a brewer is starting out and needs to build the capital they need for their own equipment. Local contract brewers include Left Field Brewery and Kensington Brewing Company, both of whom currently constructing their own facilities (the latter wasn’t brewed in Kensington Market but will be brewed there shortly). This latest bit big news was made public last week when the Alcohol and Gaming Commission of Ontario told Left Field that they couldn’t participate in an event with a Special Occasion Permit, an event that was being hosted in their own space, the space where they are currently building the Brewery. The Special Occasion Permit rules say that once a SOP is issued, all alcohol for the event must be purchased under the permit from an authorized government retail store (such as an LCBO, an LCBO Agency Store, The Beer Store or any Winery, Brewery or Distillery Store). Left Field says this on their blog:

Despite the fact that our beer is brewed at licensed breweries, has been lab tested by the LCBO and is consumed safely at over 60 bars and restaurants every day, we’ve learned that the AGCO deems the activity of us selling directly to SOP permit holders, including beer festival organizers, as illegal. That’s right, a brewery who is licensed to sell beer in Ontario cannot sell beer to beer festivals.

They also say,

Beside the fact that contract breweries have been participating in SOP festivals and events for many years, some attention has been drawn to the issue just recently and we seem to be the initial target.

I encourage you to read Ben Johnson’s articles in his own blog and in BlogTO and read the BlogTO comments too. They shed more light on the situation.

 

299augusta

Kensington Brewing Company’s new digs at 299 Augusta Ave.

3. The alcohol sales monopoly

This isn’t new. Every few years it becomes a political issue. In Ontario you can only buy beer at the LCBO (Liquor Control Board of Ontario) or The Beer Store. The LCBO is an agency of the Ontario government. The Beer Store is regulated by the AGCO and ownership is divided like this:

  • 49% owned by the Labatt, which itself is owned by Anheuser-Busch InBev (Belgium)
  • 49% owned by Molson Coors Brewing Company, headquartered in both the United States and Canada
  • 2% owned by Sleeman Breweries which USED to be Canadian but now owned by Sapporo (Japan)

And The Beer Store and the Ontario Convenience Stores Association are at war.

According to a recent poll initiated by beer columnist Jordan St. John, 48% of those polled approve of beer sales at convenience and grocery stores – versus 44% that disapprove – although if available, 70% say that they would buy beer through the new outlets. Read St. John’s findings here: Fun With Numbers: Legitimate Polling Edition and The Canadian Beer News report about the poll.

On April 23, the OCSA published a blog post that said,

Amid a “fear mongering” ad blitz launched by The Beer Store to protect its near-monopoly on beer sales in Ontario, The Ontario Convenience Stores Association unveiled an unprecedented show of public support for modernizing Ontario’s outdated alcohol retailing laws with a 403,412 name petition signed by Ontarians from communities across the province. It is the largest single signed petition ever collected in Ontario and the second-largest in Canada.

See FreeOurBeer.ca.

I finally saw one of the TV ads (posted below), which I’d heard summarized as “Think of the children!” The ads starts with a female voice saying “They’re good kids, but they’re still kids”.

The OCSA responded with Premier Wynne: It’s time for some adult supervision of The Beer Store. As the open letter says,

Ontario Convenience Stores Association members are responsible community retailers. We are entrusted to sell more age restricted products than any other retailer – and do an excellent job of it. Convenience stores employ 69,000 people in Ontario and we’re a $13 retail billion industry for the province. Convenience stores are also the largest partner of the Ontario government for the OLG, selling 75% of all lottery tickets in the province and returning billions in tax and gaming revenues to public coffers.

Indeed, I would imagine that any retailer authorized to sell alcohol would get some extra training for alcohol. It still seems strange to me that I can find some amazing craft beer at any Walgreens in the U.S. and a couple of years ago I was in Rochester when we came across a Sunoco gas station that had just begun a pilot project to sell growlers of draught beer through their Craft Beer Exchange program. Growlers were sealed with tape and there were rules and laws. There’s a good post about the Craft Beer Exchange here.

The U.S. doesn’t do it without concern, though.

An article called Battle Brewing Over Selling Beer At Gasoline Stations published in Hartford Courant (Connecticut) discusses a proposal to sell beer at gas stations and says,

The proposal has set off a huge clash at the state Capitol, where the package stores are battling a potentially major expansion of beer sellers. In recent testimony and in interviews, the package stores and an outspoken legislator have said that it is a public safety issue for drivers who could buy single cans of beer, known as “road sodas,” at gas stations at night and potentially drive drunk on the way home. They also question whether the state has enough liquor-control inspectors to prevent sales to minors at gasoline stations all across the state.

Maybe The Beer Store should be happy that it’s not gas stations they’re at war with. Ontario already has a policy that states that you can’t find with an open container within reach. How is buying alcohol from a convenience store any different than buying from the LCBO?

Regardless, even of the right to sell alcohol at corner stores is granted, you know that there will be lots of expensive measures put in place to make money for the government. Insurance. Smart Serve (or related) training. Permits. Things like that.

Image by Ontario Convenience Stores Association

Putting it together

Interestingly, Queen’s Park holds their own annual Ontario Craft Beer awards, awarding winning beers availability in the dining room and at catered events & receptions at Queen’s Park for the a year. And yet, regulations exist to make it harder for craft breweries to exist. Wouldn’t it be amusing if winner Highlander were a contract brewer? (They’re not – and all contenders for the prizes are available at the LCBO, likely a condition for nomination.) Brewers such as Left Field need the exposure from festivals to get people to bars to drink their product so that they can open their own brewery. And selling beer in a corner store whether it’s Molson product, or a microbrew that’s local or foreign – will increase its brand recognition. I’m lucky that I live on the same block as two bars with amazing beer selections – one very large, one much smaller but well curated. It’s a high time for craft beer. You know that old joke about American beer being like screwing in a canoe because it’s fucking close to water? The American craft beer industry happened and blew the Canadian industry out of that water. But that’s been changing and the government should NOT be drowning that industry. If anything, government should be encouraging it for reasons related to employment, industry and agriculture. Breweries employ people. Hops and barley grow.

Big Beer.

So, Prohibition 2.0? Could be. As I said in response to a friend on Facebook who shared my share of one of Johnson’s articles,

These events are forming shit-storm clouds. The good part is that it’s increasing awareness. Beer has become a political issue (again). It’s fascinating.

Resources

To stay updated here are some more blogs and Twitter accounts I found while working on this post:

  • Ben’s Beer blog
  • The Ontario Convenience Stores Association (OCSA) Twitter account, @OntarioCStores
  • Mac’s Milk. That convenience store’s Twitter account is @MacsAgencyStore  and their bio is now “Responsible Retailer of Alcohol Worldwide–Supporter of Craft Beer— Proponent to end the Ontario Beer Monopoly.”
  • Ontario Beer Facts, @ONBeerFacts is “Providing Ontarians with important facts on the consequences of selling beer, wine and hard liquor at corner stores and gas stations.” This is propaganda FOR the beer monopoly, but it’s interesting to get both sides.

Also read

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