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CanadaEnd of Beer Store deal has 'huge economic upside' for Ontario craft brewers, alcohol adviser says

16:26  03 june  2019
16:26  03 june  2019 Source:   cbc.ca

Ontario to end Beer Store deal; would pave the way for beer in corner stores

Ontario to end Beer Store deal; would pave the way for beer in corner stores TORONTO — The Progressive Conservative government has tabled legislation that would terminate a contract with The Beer Store. The previous Liberal government signed a 10-year deal with the brewers that permitted an expansion of beer and wine sales to hundreds of grocery stores. Premier Doug Ford has indicated he plans to put beer and wine in corner stores, but he has to break that agreement to do so and the industry has warned that could trigger steep financial penalties. While tabling today's bill, Finance Minister Vic Fedeli said the current system is a monopoly that is a bad deal for consumers and businesses.

"Today the craft brewers in Ontario are disadvantaged by the way The Beer Store operates. Only two per cent of the beer sold through The Beer Store is from craft breweries ," he said in an interview with CBC Radio's Metro Morning. Hughes, a former Conservative MP who also served as an Alberta

End of Beer Store deal has ' huge economic upside ' for Ontario craft brewers , alcohol adviser says . One was the zoning barriers that craft breweries face when trying to open; the other was making sure beer events and beer tourism are part of Toronto's economic development plan.

End of Beer Store deal has 'huge economic upside' for Ontario craft brewers, alcohol adviser says© Justin Tang/The Canadian Press Ken Hughes, the province's special adviser on alcohol, says that reforming beer sales will 'free up' the market for a burgeoning craft beer industry.

The Progressive Conservative's proposed termination of The Beer Store deal has a "huge economic upside" for Ontario's craft brewers, says the province's top adviser on alcohol.

Ken Hughes vows that reforming beer sales will "free up" the market for smaller craft operations, which he says are a cornerstone of Ontario's identity.

"Today the craft brewers in Ontario are disadvantaged by the way The Beer Store operates. Only two per cent of the beer sold through The Beer Store is from craft breweries," he said in an interview with CBC Radio's Metro Morning.

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End of Beer Store deal has ' huge economic upside ' for Ontario craft brewers , alcohol adviser says . When asked Tuesday if he was worried about the move deterring investment, Fedeli noted that Fitch Ratings agency has upgraded its rating outlook for Ontario from negative to stable.

End of Beer Store deal has ' huge economic upside ' for Ontario craft brewers , alcohol adviser says . Ontario also introduced the "buck-a- beer challenge" in August 2018 and extended alcohol sales hours in May.

Hughes, a former Conservative MP who also served as an Alberta cabinet minister, delivered his report to Premier Doug Ford late last month on ways to boost consumer choice and convenience in alcohol sales.

Based on Hughes' recommendations, the Tories tabled legislation last week that would allow the province to turf a 10-year agreement with The Beer Store.

End of Beer Store deal has 'huge economic upside' for Ontario craft brewers, alcohol adviser says© Provided by Canadian Broadcasting Corporation

The deal, signed by the previous Liberal government, permitted the expansion of beer and wine sales to hundreds of grocery stores across Ontario. But the contract also barred them from using their own distribution system and negotiating their own price deals with brewers.

End of Beer Store deal has 'huge economic upside' for Ontario craft brewers, alcohol adviser says© Jeff Walters/CBC Before the Ford government can open the beer retail market to corner and big box stores, it needs to scrap a contract with The Beer Store that limits the number of retail outlets in Ontario until 2025.

The PC's sweeping move would lay the groundwork to allow every grocery and convenience store in Ontario unfettered access to sell beer, cider and wine.

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End of Beer Store deal has ' huge economic upside ' for Ontario craft brewers , alcohol adviser says . The government body regulating alcohol , gaming and horse-racing in the province has raised the minimum price of beer sold in grocery stores and dépanneurs.

Scott Simmons, president of Ontario Craft Brewers , said the craft brewing industry has grown to include 275 small independent breweries . End of Beer Store deal has ' huge economic upside ' for Ontario craft brewers , alcohol adviser says . Ontario Chamber of Commerce warns axing Beer

In order to expand those sales, however, the Ford government must pit itself directly against a coalition of the province's top brewers — Labatt, Molson and Sleeman — which retain predominate control of The Beer Store.

"There is no other place in the world where the government has handed over to the three largest players in the industry essentially a management control position in the marketplace," Hughes said on Monday, noting that the current monopoly is bad for consumers.

But the beer giants already have plans to fight back.

Labatt and Molson warned the province last week that breaking the beer agreement would trigger steep financial penalties and indicated they will file a legal challenge over the proposed termination.

When asked about this looming expense and what it could cost the taxpayer, Hughes stated "it's completely premature to suggest that it'll cost anything."

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She says Ontario brewers continue to push the limits on what that means, and may are still doing the "farm to table" approach by using locally sourced ingredients. Related Stories. End of Beer Store deal has ' huge economic upside ' for Ontario craft brewers , alcohol adviser says .

As local craft breweries have become the toast of the town in British Columbia, many hop farmers say the success has been tough to swallow. "Today the craft brewers in Ontario are disadvantaged by the way The Beer Store operates. Only two per cent of the beer sold through The Beer Store is from

"Let's see how it plays out," he said

Scott Simmons, president of the Ontario Craft Brewers Association, has long been encouraging the province the expand alcohol sales beyond The Beer Store.

The group represents some 95 of the province's 270 small-scale brewers.

Craft breweries can currently have a maximum of two retail locations, but an indefinite number of production facilities.

While craft beer accounts for eight per cent of all beer sales in Ontario, Simmons told CBC News last month that further privatizing the market could raise that number.

"When you start expanding retail access to more grocery stores, big box stores or specialty alcohol stores or convenience stores, you're just creating more distribution."

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