

Codi Wilson and Chris Fox, CP24.com





The Beer Store is introducing new policies to make it easier – and cheaper – for small Ontario breweries to sell their products at stores but those in the industry say the changes don’t go far enough.

The Beer Store, which is owned by multi-national brewers Molson-Coors, Anheuser-Busch InBev and Sapporo, announced on Wednesday that Ontario brewers will have an opportunity to be part owners of the company and will pay smaller fees for listing their products at retail locations, provided they sell fewer than one million litres per year.

The changes mean smaller breweries will not have to pay a listing fee to sell two of their products at the five retail locations closest to their brewery and will also be allowed to offer products at additional locations at a “reduced listing fee” on a “per store” basis, the Beer Store said.

The changes come following public criticism over a so-called sweetheart agreement between the Beer Store and the LCBO that gives the company a monopoly on beer sold in packages of more than six units.

“At first blush it sounds like lipstick on a pig to me. There is no way to candy coat it,” Junction Craft Brewing brewmaster Doug Pengelly told CP24 on Wednesday afternoon.

“Recently, the Beer Store has made it more and more difficult for craft brewers to get to market and get their beer on the shelf. All the programs they had to allow people to promote and learn about beer in their stores they have been cutting down on and now there is a lot of stuff in the media and it is ‘Ooh, we are going to be nice and friendly to the craft brewers.’”

Jeff Newton, president of Canada’s National Brewers, told CP24 on Wednesday morning that he is “hopeful” that many small brewers in Ontario will “see the merit” in the changes and take advantage of them.

Pengelly, however, told CP24 that his brewery will not be placing its product in the Beer Store because “the conditions aren’t fair.”

That sentiment was then echoed by the Great Lakes Brewery president and chief brewmaster Peter Bulut in a subsequent interview with CP24.

“It (the store) is designed to sell the owners beers and although we do have a chance to bring our beer into the store it is really hard to get your beer out of the store,” Bulut said. “The big thing is the access. Just take the wall down and let consumers walk around and pick from the shelves

"Open ownership policy"

The Beer Store said Wednesday that they will now have an "open ownership" policy that they say allows all Ontario-based brewers to have a stake in the company.

A qualifying brewer with annual Beer Store sales of five million litres a year or more may be able purchase one “Class E Share” for $1,000 and a brewer that sells less than five million litres can purchase an “F Class Share” for $100.

Three spots on the Beer Store's board of directors will be opened up to Ontario-based brewers.

In a written statement, Beer Store president Ted Moroz claims that in recent months, Beer Store officials have been “quietly working behind the scenes on how to reshape the shareholder agreement and make the Beer Store even more open and transparent.”

An advisory panel chaired by former TD Bank CEO Ed Clark recently recommended that the province charge the Beer Store for its monopoly on beer sales.

During a year-end interview with The Canadian Press, Ontario Premier Kathleen Wynne said that the relationship between the LCBO and the Beer Store looked unfair and would "absolutely" be changed.

The office of Ontario's Finance Minister Charles Sousa says the advisory council continues to look into the issue and will consider the Beer Store's announcement "in the context of its work."

‎"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," Susie Heath, a spokesperson for Sousa, said.

"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.”

Cam Heaps, chairman of Ontario Craft Brewers, said the announcement came as a "complete surprise" to 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," Heaps said in a written statement released Wednesday afternoon.

Heaps says the organization wants to see "fundamental change" to Ontario's beer distribution channels in a way that would allow craft brewers to grow and gain a "full share of the market potential."

"We were not consulted on any of this and as such, we just do not have enough information to comment right now," he said.