The Beer Store

Brewers Retail Inc.

Type	Joint venture
Founded	1927
Headquarters	Mississauga, Ontario, Canada
Number of locations	450 retail stores (2007)
Area served	Ontario
Industry	Beer distribution Beer retail sales
Owner(s)	Labatt Brewing Company (AB InBev) - 49% Molson Coors Brewing Company - 49% Sleeman Breweries (Sapporo) - 2%
Employees	5,700 (2007)
Website	www.thebeerstore.ca

Brewers Retail Inc., doing business as The Beer Store (TBS), is a privately owned chain of retail outlets in Ontario, Canada, founded in 1927. Ontario government regulations regarding the sales of alcohol gives the chain a near-monopoly of domestic retail beer sales in Ontario. These regulations stipulate that Brewers Retail cannot sell "hard liquor" (spirits), or consumer goods (like groceries). Its only legal competition is found in the beer sections of the Liquor Control Board of Ontario (LCBO) stores, government-owned outlets which stock beers outside of the Brewers Retail system, and retail outlets at breweries.

Company

Forty-nine percent of the company is owned by the Labatt arm of Anheuser-Busch InBev of Belgium; forty-nine percent is owned by Molson Coors Brewing Company which has headquarters in both the United States and Canada; and the remaining two percent is owned by Sleeman Breweries, an arm of Sapporo of Japan. [3]

It is regulated by the Alcohol and Gaming Commission of Ontario (AGCO), a government agency. As of November 2006, the company operates 450 retail stores which sell beer to the general public. [4] TBS also has the exclusive right to sell domestic beer to Ontario bars and restaurants, of which more than 17,000 are licensed to sell alcohol. The LCBO sells imported beer to bars and restaurants. Some imported beers are available at The Beer Store, but they are imported by the LCBO and then sold to Brewers Retail.

Workers are currently represented by the United Food and Commercial Workers (UFCW).

History

The company began in 1927, with the end of prohibition in Ontario. Although prohibition had proven to be unsuccessful, the provincial government still needed to placate angry temperance advocates and agreed that beer would be sold through a single network of stores. However, the government did not want to operate this network itself (as was done in some other Canadian provinces), and so permitted brewers to organize the Brewers Warehousing Company Ltd., which later became Brewers Retail.

Brewers retail started out as a co-operative organization of the many regional brewers in Ontario. Each brewery had a share in the company. With mergers and takeovers in the intervening years ownership is consolidated in the hands on Molsons, Labatts, and Sleemans. All of these companies have since been bought by foreign brewing concerns.

The company established one of the first returnable bottle systems shortly after it was founded.^{[citation needed]}

The Beer Store today

Store information

The Beer Store location in Etobicoke

Many stores (currently 129 of the 450 locations) have extended shopping hours. Hours vary in different cities, but many are open past 9 p.m. on Friday and Saturday nights, with some stores open until 11 p.m.

As of 2005^[update], The Beer Store offers 300 brands from 70 brewers in 450 stores province wide.

The Beer Store claims to follow the practise of "extended producer responsibility", meaning that they will take back all the packaging material they sell (including the cardboard, the glass bottles and bottle caps) and either recycle or reuse it.[5]

Environmental leadership is a core value of The Beer Store as demonstrated by the company's environmental policies.^{[citation needed]} The Beer Store is reported to have diverted approximately 70 billion beer bottles from Ontario landfill sites over 80 years of operation.^{[citation needed]}

The Beer Store has been presented with the Eco Logo award, which was given for its efficient environmental package management systems.^{[citation needed]} The Beer Store operates an efficient packaging and recovery system with an aim of recovering 100 per cent of beer packaging sold in Ontario. The Beer Store accepts cartons, bags, plastic bottles, and every other kind of beer packaging, claiming the best packaging recovery system in the world.^{[citation needed]}

The company claims a system-wide recovery and re-use rate of 95 per cent for the industry standard bottles, which it claims are reused 15 to 20 times. It supports the Conservation Council of Ontario’s "We Conserve" program.

Criticism

This section has been nominated to be checked for its neutrality. Discussion of this nomination can be found on the talk page. (December 2008)

Most Canadian provinces have since allowed privately owned stores to compete for sales of beer and wine while retaining tighter controls over the sale of spirits, while Alberta has privatized all retail liquor stores. However, in Ontario, no changes have been made and Brewers Retail continues to sell over 90% of the beer sold in the province. Despite its near-monopoly, it is permitted to charge non-shareholding breweries substantial listing fees for each beer carried in stock ^[1]. This practice has been criticized as restricting competition in the huge Ontario beer market, especially from smaller brewers who often cannot afford the fees, especially for multiple brands.

Although the province-owned LCBO also sells beer to the general public, Brewers Retail is the main distributor to restaurants and bars (Ontario-based craft breweries may sell to licensed establishments directly). The company refuses to grant either quantity discounts or credit to any customer, meaning that even the most solvent establishments in Ontario must pay cash on delivery for their beer. This is a constant source of friction between Brewers Retail and the hospitality industry.

The company claims that the Brewers Retail monopoly generates significant economies of scale and that most of the savings generated compared to the systems used elsewhere are passed on to the consumer.^[2] The company claims that allowing corner stores to sell beer (as is done in neighbouring Quebec where about 20,000 stores sell beer compared to 1,250 in Ontario - about 25 times the number of stores per capita) would cause increased distribution costs of about $4/case that in other provinces have been either passed on to consumers or absorbed by the government in the form of a tax cut. However, these claims are dubious at best and have been vehemently refuted by officials in both Quebec and Alberta. As of June 2007, the retail price for a case of 24 of some brands of beer sold in Gatineau, Quebec has been proven to be more than $10 cheaper than the price for 24 of the same brand in nearby Ottawa, despite the fact that the differences in taxes are less than half that amount for that volume of any particular brand. The opposite is true in Alberta, consumers pay approximately ten dollars more for a 24 pack of beer. ^[3]

The price difference of approximately 40 cents per serving between stores in Eastern Ontario and Southwestern Quebec is sufficient enough to make illegal smuggling (or "bootlegging") of beer across Ontario's un-patrolled eastern border for re-sale on the black market, a highly profitable enterprise.^{[citation needed]} BRI has lobbied the Government of Ontario to name interprovincial bootlegging of beer as an irritant in intergovernmental relations with Quebec. However, BRI and the unions representing employees of both the Beer Store and the LCBO have been criticized for falsely and/or misleadingly claiming that it is against the law for consumers to bring alcoholic beverages from Quebec or (less commonly) from Manitoba under any and all circumstances.[6] In fact, it is perfectly legal for consumers to import alcoholic beverages from other provinces into Ontario provided it is not intended for re-sale.

Brewers Retail has become politically controversial, especially following the Molson-Coors-SAB Miller merger, which placed the majority of its ownership in the hands of foreigners. In 2005, Ontario's alcohol laws were reviewed and proposals to allow the sale of beer in grocery and convenience stores were put forth. However, although some Liberal backed the idea of changes of some sort, the Liberal government rejected the proposals and refused to change the laws. The government has received considerable criticism for perpetuating a virtual monopoly on Ontario beer distribution by a foreign-owned cartel.^[4] An online petition was started by a private citizen, Derek Forward, to ask the provincial government to end the monopoly enjoyed by the Beer Store.^[5] The petition has received coverage in the Toronto Star, and has generated enough support to allow it to be formally presented to the provincial legislature in the fall of 2008 for consideration (petition No. P–146: "Practice and arrangement of retailing beer").^[6]

Brewers Retail has waged an ongoing battle with the Brick Brewing Company of Waterloo since at least 2002, when it used monopolistic tactics to force what is now Ontario's largest independent brewer to stop offering beer in "Stubbies" by withholding supplies of industry standard "long-necked" bottles. This dispute was finally settled in favour of Brick in September 2008.^[7] At the start of the 2007 provincial election campaign, Brick again made headlines when it cited a number of discriminatory BRI practices and policies, such as restrictions on price advertising, for causing a decline in company sales. BRI representatives denied that their policies are hurting small brewers and implicitly questioned the timing of the Brick Brewing Company's statement, suggesting that in their view it is unethical for a brewery to openly criticize BRI policies in the middle of an election campaign.^[8]

Following Sapporo Breweries' purchase of Sleeman Breweries Ltd., no portion of Brewers Retail is now held by any majority Canadian-owned entity, which has increased pressure on the government to force an end to the Brewers Retail near-monopoly, or at least to return it to Canadian ownership.^[9]

Ontario Craft Brewers is the main lobby group for Ontario's smaller brewers, and has been increasingly critical of the current system. The 29 OCB members currently employ several thousand Ontarians. OCB wants to either acquire shares in BRI or be permitted to set up their own competing chain. Premier McGuinty responded by saying that his government would not even consider any application to form a competing chain, and that his government would not consider compelling BRI's shareholders to sell any shares, although some Liberal and Conservative backbenchers have said they would expect BRI to at least negotiate in good faith with craft brewers who made a serious offer. BRI responded by saying that it was not considering and would not consider selling shares at any price, and that they do more than enough to accommodate non-shareholding brewers already. Canada's National Brewers (the lobby group that represents the BRI shareholders) further said that in the event OCB did get to set up a competing chain, they would refuse to stock their products there. ^[10]

As map publisher

In the 1980s, Brewers Retail published a directory of its retail locations in a booklet with a small map to each location. It had a picture of an animal, (a penguin, for example) on the covers. The booklet when closed was approximately 4 inches by 3 inches. The 1972 version issued by Brewers Retail had cartography by Rand McNally. [7]

In popular culture

The Beer Store has been featured in a few aspects of pop culture. In the film Strange Brew the McKenzie Brothers visit a Brewers Retail store demanding a refund after they attempt to return a bottle of beer that contained a mouse (the mouse was however placed in the bottle by the brothers). The Beer Store was also showcased in episodes of Late Night With Conan O'Brien during O'Brien's week-long tenure in Toronto during the week of February 10, 2004.

Related companies

Brewers' Distributor Ltd. operates in Western Canada and is owned by Anheuser-Busch InBev and Molson-Coors (Sleeman has its own distribution operation in the West). Unlike BRI, BDL only warehouses and distributes beer and is not in the retail business.

References

See also

• Alcohol monopoly

External links

• The Beer Store Corporate Website
• Flavelle, Dana (2008-07-05). "The real reason your beer costs more than it should". The Saturday Star (The Toronto Star). http://www.thestar.com/News/GTA/article/454836.