In a surprise move, The Beer Store, a private retailer run by three major foreign-based breweries, is opening up its ownership to Ontario craft brewers.

The decision comes after a Star investigation and against the backdrop of Premier Kathleen Wynne’s threats to dismantle the beer monopoly unless more money pours into the treasury and small brewers are given greater access.

Beer Store president Ted Moroz, conceding the company was mindful of the media debate swirling around the retailer, said “we listened and we acted.”

It will not cost much for craft brewers to buy in — those with sales of less than 5 million litres a year will pay $100 for a preferred share in the company while those producing more than 5 million litres would pay $1,000.

The new owners would be charged the same fees as Molson, Labatt, and Sleeman to list their brews at The Beer Store.

However, the major breweries will still control the company’s board of directors with Molson and Labatt, which each own 46 per cent, having five seats apiece, Sleeman, an 8 per cent owner, with two seats, the larger craft brewers getting two seats, and the small brewers one.

There would also be three-person executive committee with one representative from Molson, another from Labatt, and a third selected by all the other Beer Store owners.

“We heard from Ontario brewers that they wanted to participate in the management of The Beer Store and contribute to its future success. That’s why we’re opening up the system and making it even more transparent,” Stewart Glendinning, CEO of Molson Coors Canada, said in a statement Wednesday.

“The Beer Store is truly becoming Ontario-owned,” added Labatt Breweries Canada President Jan Craps.

“Ontario brewers will be represented on the board and share in decision-making. All owners will have the same or better costs to sell in The Beer Store than the current owners,” said Craps.

Sleeman, the third owner of the 448-outlet chain, said the changes would “improve the transparency and openness of The Beer Store for all Ontario brewers . . . and will allow our input into the evolution of the system.”

While microbreweries can buy into the company, small Ontario brewers selling fewer than 1 million litres a year at The Beer Store will pay no listing fee to stock two of their brews at the five locations closest to their brewery.

Cam Heaps, chairman of Ontario Craft Brewers, which represents most small breweries, said the change “came as a complete surprise to our members.”

“It certainly does not address our major issue of improving access for consumers. Before we can comment, we need more information; we have a lot of questions,” said Heaps.

“Our goal continues to be fundamental change to Ontario’s beer distribution channels that will result in a doubling or tripling of the jobs currently created by the craft brewers as well as the ability to reach our full share of market potential,” he said. “

But Bruce Davis, president of Gananoque Brewing Company, said “the devil is in the details.”

Davis noted that his small brewery, which sells in 30 LCBO outlets and will soon be in 20 Beer Store locations, wouldn’t qualify to be an owner because he has to produce his bottled beers in an off-site location.

“Many of the other guys are in the same boat,” he said, noting bottling facilities are prohibitively expensive for smaller firms.

Still, he hailed the change as “crack in the armour” of Big Beer.

“They’ve obviously felt the ground shift.”

The move comes after the Star’s Martin Regg Cohn revealed a secret sweetheart deal between the big breweries and the publicly owned Liquor Control Board of Ontario.

Under that agreement — now subject of a complaint from Restaurants Canada to the federal Competition Bureau — the LCBO is restricted from selling beer in any size larger than a six-pack.

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That leaves more lucrative sales of 12- and 24-packs exclusively to The Beer Store with restaurants and bars forced pay higher prices to buy their beer directly from the big companies.

At the same time, Wynne has been warning Ontarians can “expect some change” this year on the government’s deal with the foreign-owned Beer Store.

She told the Star last month that she is “absolutely” serious about reforming the system.

“I’m impatient to get at that. There’s a distribution system that works very well, but the fact it works very well has a value to it, right?” Wynne said of The Beer Store.

“So how do we realize that value for the people of the province?”

A blue-ribbon panel on monetizing provincial assets led by former TD Bank chair Ed Clark has urged charging The Beer Store a “franchise fee.”

If they balk, Clark said the government could strip the monopoly enjoyed by AB InBev, MolsonCoors, and Sapporo, the offshore parents of Labatt, Molson, and Sleeman.

Reaction from the government was so tepid that the move may not have the impact hoped for by the big brewers.

Clark’s “advisory council will consider this announcement in the context of its work,” said Susie Heath, press secretary to Finance Minister Charles Sousa. ‎

“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,” said Heath.

“At this time, the advisory council is still completing their review and we will await their final report which will help inform the 2015 budget.”

Last month, Wynne said changes are about more than just revenue for the treasury.

“For me, this is not about doing it because of what Ed Clark’s doing. We have said to him, this is part of what needs to be looked at, because I want it to be fair,” she said.

“My entrée into this was actually through discussions with the craft brewers — that was when the issue really landed on my table, and so I’m just very much looking forward to being able to take some steps to make it fair,” she said.

“I think the ‘not-Canadian-owned’ sticks in people’s craw. People can handle the private part — and once people understand that it was intended to be like a co-operative of all of the brewers — I think people can deal with that,” she said.

“I think the foreign-owned part — and then add to that the notion that some of the Ontario brewers don’t have access — that’s important to people.”

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