Toronto – The Beer Store is opening its doors, effective immediately, to all Ontario-based large and small brewers.
The Beer Store owners, who are three major brewing companies, made the announcement today. In a release they say the move makes sense for Ontario brewers and consumers.
The Beer Store, says TheStar.com, is 49-per-cent owned by Labatt Brewing Company Ltd., a subsidiary of Anheuser-Busch InBev of Belgium. Another 49 per cent stake is held by Molson Coors Canada, controlled by Molson Coors Brewing Co., incorporated in Delaware and headquartered in Colorado (it also keeps corporate offices in Montreal). Japanese-owned Sleeman holds the remainder.
According to the owners, the move will help the retail network continue to offer a low-cost advantage and continue to enable brewers to independently set the lowest average beer prices in Canada.
An advisory panel chaired by Ed Clark, a former TD Bank CEO, had recommended the province charge the Beer Store for its virtual monopoly on beer sales, saying there was a clear value that could be auctioned off if the brewers won’t pay up, says CBC.ca.
Even Kathleen Wynne, Ontario’s premier, said in a year-end interview with The Canadian Press that the relationship between the Beer Store consortium and the LCBO looked unfair and would absolutely be changed, says the CBC.ca.
Benefits for small brewers
The Beer Store also announced some other benefits for small Ontario-based brewers.
Small Ontario brewers (who sell fewer than one million litres per year at the Beer Store) will pay no listing fee when stocking two of their products at the five Beer Store locations closest to their brewery, increasing the selection of locally-brewed beer for consumers in communities across the province.
Beyond those five stores, small brewers will be able to list the same two products at any additional Beer Store location at reduced listing fees, paying only the per-store fee. This will encourage additional small brewer listings at the Beer Store, enhancing the ability of those brewers to grow their businesses, while also offering wider selection to Ontario consumers.
Small brewers also asked for the ability to introduce seasonal brands throughout the year. The Beer Store is also implementing this change. Brewers can swap out a new or existing brand listing and replace it with a seasonal brand twice a year at no additional cost.
New shareholder agreement
The Beer Store also made reference to the Toronto Star’s recent investigation into the chain’s ownership and ties to political parties, saying that it was working behind the scenes to reshape the shareholders agreement and make the Beer Store more open and transparent.
Under the new ownership structure larger Beer Store owners (annual Beer Store sales over five million litres per year) will pay the exact same fees as the current owners to sell their beer in the Beer Store.
Smaller brewers (Beer Store sales under five million litres/year) will pay discounted fees as they will not be required to fund certain costs relating to capital investment in new stores or pension and benefits plans.
New owners are being welcomed into the Beer Store at a nominal cost: Ontario-based brewers with Beer Store sales under five million litres per year will pay $100 and receive a Preferred Share in the company; those with sales over five million litres per year will pay $1,000 and also receive a Preferred Share.
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