Changes to the Beer Store could lead to higher prices, the CEO of Molson Coors Canada warned on Tuesday.

Stewart Glendinning’s comments to The Canadian Press come amid a push from Queen’s Park for the Beer Store’s foreign owners — Labatt, Molson Coors and Sleeman — to start paying a “franchise fee.”

“My overall worry is that we create a problem for beer volumes in Ontario,” Glendinning said.

An expert panel headed by former TD Bank CEO Ed Clark recommended the fee, a cost the companies would not be allowed to pass on to consumers as a price hike. Clark said the province could strip the brewing giants of their monopoly should they refuse.

Clark also recommended the government-owned LCBO be allowed to sell 12-packs of beer instead of just six-packs. As the Star revealed in December, a secret deal between the LCBO and the Beer Store means lucrative 12-packs and 24-packs cannot be sold at liquor stores.

Glendinning’s comments echo those of Jeff Newton, president of Canada’s National Brewers — which runs the Beer Store — who has said that adding new taxes to the retailer and selling larger packs at the LCBO is a “recipe for higher beer prices.”

But the province is still exploring the panel’s recommendations.

“We know that changes need to be made at the Beer Store,” said Kelsey Ingram, spokesperson for Finance Minister Charles Sousa.

In November’s Fall Economic Statement, Ingram noted, Sousa expressed support for the recommendations, including improving transparency at the Beer Store, providing Ontarians with a fair share of profits, ensuring all producers, including craft breweries, are treated equitably, and extending the sale of 12-packs of beer into LCBO stores. ‎

On Tuesday, Glendinning described the Beer Store as a break-even co-operative. Sousa has previously disagreed.

“They will argue that they are a not-for-profit organization and we argue that there is some profit in there so we want to make sure that’s distributed accordingly,” Sousa told reporters last month.

Glendinning’s comments regarding the Beer Store came after Molson Coors reported a nearly 32 per cent drop in fourth-quarter profits to $94.1 million (U.S.), down from $137.2 million the year before.

The company cited a higher tax rate and unfavourable currency fluctuations as factors in the drop, along with lower volumes of beer sold in both Canada and the United States.

Statistics Canada numbers show a steady decline in per person beer consumption in Canada stretching back to the 1970s.

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Big players like Molson Coors are taking the biggest hit from this drop in beer drinking, and craft brewers are chipping away at the market share of larger multinationals, according to consumer research analyst Brian Yarbrough.

Still, craft brewers in Ontario say the Beer Store makes it difficult for them to sell their products in its stores.

In January, the retailer offered craft brewers a minority voice on its board. The proposal would lead to more transparency, according to Glendinning, but critics say having only a handful of board seats for craft brewers would give them little say.

With files from Star wire services