Six-packs coming to grocery stores
Some supermarkets to have beer on shelves by Christmas in huge shakeup of brewery business
Premier Kathleen Wynne is playing Santa Claus for Ontario beer drinkers with the sale of six-packs in Ontario supermarkets beginning this Christmas.
Beer will eventually be sold in 450 of the province’s 1,500 grocery stores — everywhere from Loblaws to smaller independent markets — with Ontarians continuing to enjoy Canada’s lowest average prices.
“It’s a good day for our economy and for job creation. It is also a good day for the people who like their beer cold because it will be easier to buy it,” the premier said Thursday.
The most sweeping reform of beer sales in Ontario history follows an investigation by the Star’s Martin Regg Cohn and comes 30 years after former premier David Peterson first promised such liberalization.
In December, the Star exposed a secret sweetheart deal between the publicly owned Liquor Control Board of Ontario and the private Beer Store chain, and revealed lobbying and political donations by foreign-owned Labatt, Molson and Sleeman.
Under the changes, the 448-outlet Beer Store chain will have to devote at least 20 per cent of all shelf space, and merchandising and marking programs, to craft beers.
However, a new levy will add $1over the next four years to the cost of a 24-pack that currently retails for about $34.
(That compares to $40 for the same beer in Alberta and British Columbia.)
Consumers will pay about a penny more per bottle per year as it’s phased in, eventually meaning $100 million more annually to the treasury.
The Liberals will also sell up to 60 per cent of the publicly owned Hydro One with no shareholder allowed to own more than10 per cent of a utility that controls 97 per cent of the province’s transmission lines.
That will bring in an additional $4 billion toward the $31.5 billion now earmarked for public transit and transportation infrastructure across Ontario over the next decade — half for the Greater Toronto and Hamilton Area.
That’’s an increase from the previous $29 billion promised. Wynne’s move came as she immediately embraced the findings of a panel led by former TD Bank CEO Ed Clark on monetizing provincial assets to bankroll new public transit, roads and bridges.
Clark admitted there were “tough negotiations” with the Beer Store to achieve the government’s goals.
“We actually got the whole beer industry to buy in,” said the Bay Street titan, a volunteer Wynne adviser.
Under the new measures, beer prices will be set so they are the same at supermarkets, the 651-outlet LCBO, and the Beer Store.
Beer Store president Ted Moroz said “we will continue to work with the government now to implement our next generation of changes.” An independent new “beer ombudsman” will be appointed to handle consumer and craft brewer complaints about the Beer Store and the chain’s much-hailed bottle and can recycling program will continue.
All companies brewing beer in On- tario will be allowed to buy an ownership stake in the Beer Store, returning the retailer to its 1927 cooperative roots.
As well, the company will spend $100 million to update its many aging warehouse stores.
The first supermarkets will have beer on their shelves before Christmas with brews available in as many as 150 large grocery stores by May 1, 2017 and another 300 in the weeks and months after that.
Clark also recommended changes to the LCBO.
Online sales through a new LCBO e-commerce retail site will allow for home delivery or pickup at stores of a vastly expanded range of products.
There will be new publicly owned boutiques for niche items like craft beers, and specialty spirits such as single malt Scotch.
Sales of 12- and 24-packs of beer — currently restricted by law to the Beer Store under the secret pact revealed by the Star last December — will be eventually phased in to many LCBO outlets.
Supermarket hours of sale will be restricted and grocers will have to train staff to ensure under-age consumers are prohibited from buying beer, which will be sold in six-packs or smaller formats in a separate section of stores.
But Clark said that his advisory council needs more time to determine how to bring wine into grocery stores and will report later this year.
He said the wine issue is “complicated” due to international trade hurdles and requires further negotiations with the privately owned Wine Rack and Wine Shop as well as the Grape Growers of Ontario.
Still, he hopes to see vintages being sold in supermarkets by 2017.
While he noted the “most news- worthy change” is the expanded sale of beer, he emphasized that 9,000 small licensees across the province will soon be allowed to buy beer at lower prices for their bars and restaurants.
As the Star had earlier disclosed, bar owners and restaurateurs were forced to purchase from the Beer Store at higher prices than ordinary consumers.
That is a huge break for half of Ontario’s licensed establishments, designed to help small businesses buying fewer than 250 cases a year.
Other big winners are the province’s 150 independent brewers, who employ 1,000 people (compared to 2,600 for Labatt, Molson, and Sleeman.)
“This is a game changer — we expect (this) will mean a doubling craft market share and the addition of 1,000 to 2,000 new brewery jobs in communities of all sizes and from all parts of the province,” said Cam Heaps, co-founder of Toronto’s Steam Whistle Brewing and chair of Ontario Craft Brewers. But NDP Leader Andrea Horwath said the moves show the Liberals “are desperately trying to grasp at anything to pull more money in.”
Progressive Conservative MPP Vic Fedeli (Nipissing) said the decision is a “shiny bauble” to deflect attention from a $10.9-billion deficit.