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AGCO cracks down on contract brewers at beer festivals

Posted by Ben Johnson / May 3, 2014

Beer Festivals Banned Contract OntarioThe list of breweries participating in Toronto beer festivals this season might be considerably shorter than you'd expect. That's because today, as reported by Toronto's own Left Field Brewery, the AGCO has ruled that the products of contract brewers--those small companies that opt to "rent" space from larger brewers to make their beer--won't be allowed at events that are licensed with a Special Occasion Permit (SOP).

Detailing the events in a release on their blog, Left Field Brewery owners Mark and Mandie Murphy explain, "We've learned that the AGCO deems the activity of us selling directly to SOP permit holders, including beer festival organizers, as illegal."

Indeed, a quick look at the details for obtaining an SOP confirm that:

"Once an SOP is issued, all alcohol for the event must be purchased under the permit from an authorized government retail store (such as an LCBO, an LCBO Agency Store, The Beer Store or any Winery, Brewery or Distillery Store)."

What this means is that most contract brewers like Left Field will be unable to offer their products to any of the events and festivals who choose to temporarily license a space with an SOP.

So far, only Left Field Brewery has heard from the AGCO about this issue and no one I've spoken to yet seems sure why the AGCO seemingly decided to start enforcing a rule that's always been in place, but speculation seems to be that someone with a grudge might have complained--or, as the Murphys delicately put it in their release, "some attention has been drawn to the issue just recently and we seem to be the initial target."

Regardless of the intent, the potential consequences are rather broad and pretty devastating for fledgling contract breweries. The decision, if upheld across the board, means that contract brewers who don't sell their products in the LCBO or The Beer Store--i.e. the folks who largely rely on the word of mouth, brand recognition, and even the income they are able to drum up at beer events and festivals--will no longer be allowed to participate at any events licensed with SOPs.

This is an event list that includes Toronto's Festival of Beer and the Beaches BBQ and Brews Festival, among others, and even private and catered events that opt for that licensing option.

The Murphys' post includes a call to action asking craft beer fans to write their MPPs and the Ontario Minister of Economic Development, Trade and Employment, and it caused an outpouring of public support when Left Field Brewery tweeted about the events. Beer bloggers (ahem) also subsequently took up the cause and, in my opinion, it now seems fairly likely that sanity will prevail in this case and contract brewers will be welcomed back--if only because enforcing the rule at every single SOP-licensed event seems impossible.

And also because thousands of festival going Ontarians who suddenly find their beer selections limited this summer might make for one angry and vocal demographic entering an election...

Ben Johnson also writes about beer over on Ben's Beer Blog. If you like outrage mixed with humour and soaked in beer, follow him on twitter @Ben_T_Johnson.

Discussion

30 Comments

Steven / May 3, 2014 at 08:43 am
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Best to make your own brew.
Mar / May 3, 2014 at 08:56 am
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Holy fuck AGCO is the worst. How do we get them to leave?
Bob / May 3, 2014 at 09:24 am
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Beer Store and LCBO have to go. They are relics from the past and need to only exist in the annals of history. BC and QC have done it successfully, now it's our turn.
Don / May 3, 2014 at 10:37 am
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It would be nice to know what AGCO stood for. Writing fail not explaining the acronym once.
AGCO replying to a comment from Don / May 3, 2014 at 10:48 am
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Alcohol and Gaming Commission of Ontario. While it is a super common acronym, yeah it probably should have been clarified I guess.
BettieLuv / May 3, 2014 at 10:52 am
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Who and what is an "AGCO"? and how is it able to act in limitation of trade and freedom?
Jebby replying to a comment from Mar / May 3, 2014 at 11:52 am
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@Mar: when you leave ontario. We the people want AGCO here to enforce the rules that we the people deem legitimate. If you want to live in a country/province/state where people can just brew their own beers, sell them without benefiting in terms of profit (LCBO profits goes back to the community), go somewhere else because that place isn't here.
JD / May 3, 2014 at 12:04 pm
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Wrote my MPP...Suggest you all do the same...BTW Water into Beer, you're not helping the cause by using words like "dyke." You're just making yourself look stupid.
Ryan / May 3, 2014 at 12:04 pm
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Look closely at the picture, there is a giant stealing a keg.
Richard S replying to a comment from Jebby / May 3, 2014 at 12:27 pm
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we the people do not want this.
we the people have a brain and understand that Left Field's beer is brewed inside a licensed brewery. It's the equivalent of Loblaws having a facility that makes No Frill and President's Choice food. Different label, different beer, different recipe.
Everything is licensed an kosher for consumption and it is NOT some dude making beer in his bathtub and trying to sell it.
R J / May 3, 2014 at 12:43 pm
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The AGCO changed its name from the LLBO to the AGCO and continues to oversee the LLA which oversees legislation regarding the production and sale of alcohol products .
W. K. Lis / May 3, 2014 at 04:48 pm
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The LCBO/AGCO serving the needs and wants of the drinking and voting public... not.

More like the corporate shareholders.
iluvbeer / May 3, 2014 at 05:30 pm
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i'm confused?!?! what "beer festival" use to be at fort york? it seems every festival that sells beer is called the "beer festival" these days.
Drew / May 3, 2014 at 10:13 pm
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Whatever. How much of the population actually go to beer festival, less then 1%. Left Field brewery should be fighting other battles instead of being a part of a 1-2 day annual event. If your business can't survive because you cant be part of an event than you have no business. keep brewing the beers, making hats and T-shirts...
Shane / May 3, 2014 at 10:22 pm
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Whine, Whine,Whine. I have to obey the rules of an organization even though Ive only been in business less than 5 years?!?!?! Must get rid of the organization, then my company will be a success... Stop the whining and the excuses.....
Fred / May 3, 2014 at 10:41 pm
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Should these small labels be forced to put on their packaging, that's there beer is actually brewed at a Molson, Labatt, Coors,Sleeman brewery so that the consumer can know exactly where and how the product they're purchasing is created. LOBLAWS puts, imported BT, or created for loblaws by....on their packaging so its clear to the consumer that they are buyingba Loblaws product BUT its actually imported from China by a particular named company.

I'd personally like to know that when I think I'm buying a small local craft brew that its actually being created on the same premesis tjhat is pumping out Molson Canadian.
Suresh / May 3, 2014 at 10:48 pm
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To offer some insight to this, it was our upcoming event (tomorrow) that caused the 'crackdown'.

The AGCO called us earlier this week to do their due diligence on the event. Asking the basic questions about ticketing, security, smart servers etc.

We've had this conversation many times with the AGCO. It's usually very straightforward.

But this time, the AGCO person was insisting on questions specific to Left Field Brewery and Dillon's. Two booze vendors we're hosting at the event. In fact, the event (yumcha) is being hosted in Left Field Brewery's space and the space next door.

The person had no idea that Dillon's existed, but as soon as I mentioned LFB, she jumped in about the manufacturer's license. Like clockwork, she brought up that she's sure that we would not be able to serve any LFB beer, regardless of whether the event took place in their brewery space, because of a lack of license. I responded by saying that LFB hosted an event recently in that space and they saw close to 1600 people.

She got off the phone, called me a few minutes later and clearly indicated that we would not be able to use any LFB. She was quite on point about it, repeating it a few times.
She also had a hard time tracking down Dillon's in their 'system' and we had to clear this up by tracking down Dillon's agco license #.

All in all a bummer as we sold tickets to this event giving people the impression that LF beer would be served.

Incredibly fucking annoying, tomorrow should be a fun day.

Ad replying to a comment from Steven / May 4, 2014 at 12:30 am
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@Steve,
I commend all who want to brew their own, however, it does nothing to resolve the meddling of the AGCO with the fair promotion or livelihoods of brewers regardless of their phase of startup.
The AGCO overstepped bounds on this one. Shame on them.
alanna l replying to a comment from Fred / May 4, 2014 at 03:32 am
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hey Fred,

the beer is not made by the big breweries and they are not a subsidiary - it's just brewed using their equipment because the small brewers, when starting, can't afford to own such a large operation.
the small brewers are just renters like most anybody starting out.

also, I'm finding a lot of the comments here a bit suspect... call me paranoid but I think there's some Beer Store/LCBO employees chiming in (on their own accord or not I don't know).
It reminds me of when the writer here was on CBC radios afternoon call in show and the callers that got through were plants by th Beer Store/LCBO.

I guess it's a good thing that the Beer Store/LCBO are so worried about craft brewers - it means they are losing the fight to keep their ridiculous monopolies in Ontario.

I'll add: I am in no way employed by or have any financial interest in any craft breweries - I just really like their beer (and the concept of a free marketplace)!
Beersponge / May 4, 2014 at 03:36 am
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So Draconian! Left Field is a legitimate independent brewery. It shouldn't matter they don't brew on-premises (yet). We should be able to sample & support any local brewer at events like Toronto Festival of Beer. It's a great chance to connect with small, local brewers, regardless of whether they have bricks & mortar operations. Fuck you, AGCO!
Randy / May 4, 2014 at 12:28 pm
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Yes this is an open forum for all to discuss the issue whether for or against it. Just because someone doesn't have the same view on an issue as you you do you need to feel suspect and paranoid?

Are you that closed minded that you think the entire world must have the same view on the issue as you, and if they don't it must be some kind of conspiracy. I welcome the comments in an open discussion whether it comes from LCBO and Beer store workers, to small local craft beer brewers to those that purchase and consume beer. Are we trying to have a discussion from all sides? or just a one sided tell me what I want to hear discussion?
Thom replying to a comment from Beersponge / May 4, 2014 at 12:39 pm
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Yes and I would like the small craft breweries to openly display on packaging where its manufactured, same required on every other product. If I buy small local organic chicken I want to know if the farmer is using the Maple Lodge Farms processing plant or not. As conscious consumers today many of us decide whether we support a global brand or not based on their practices here or in any other country. If I choose to boycott Budweiser, I choose to boycott the entire brand and all its affiliates and partners. The last thing I want to find out is that while I'm supporting a small local brewery I'm also supporting a Mega Brand that is making money of an agreement with a smaller brewery.


8 BEERS THAT YOU SHOULD STOP DRINKING IMMEDIATELY!!!
http://therealsingapore.com/content/8-beers-you-should-stop-drinking-immediately
MmmmmmBeer / May 4, 2014 at 07:06 pm
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If you're so good at what you do, perhaps you should be vying for shelf space at the LCBO. Another 2-3 years and it could be a reality. Hang in there.
Trina replying to a comment from MmmmmmBeer / May 4, 2014 at 10:13 pm
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AGReeD! Why stress so hard over a 1-2 day festival? Push to get in the LCBO. Its your right as a brewer because that's the only place alcoholic beverages can be sold. If it was sold in grocery and corner stores you might get some other deals BUT as is LCBO is the only option....
Ben / May 5, 2014 at 07:03 am
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There are some really unfortunate comments here along the lines of "If your business can't survive because you can't be part of a festival, you have no business."

The fact is that it is very difficult to start a craft brewery because there are so many restrictions in the province's liquor laws. I won't get into the gong show that is the Beer Store (again) but even the LCBO, for example, has minimum volume demands--meaning if you can't make enough beer to meet their demands, you can't sell your beer there. They also have a lengthy testing and approvals phase, meaning that if you can't afford to make a lot of beer then wait for the LCBO to list it so you can make some money, the process won't really work for you.

It's expensive and difficult to start a craft brewery (far more difficult than it needs to be). Contract brewing is far from a perfect way to start a brewery (you're hardly going to make a lot of money to save up for your own brewery) but it is a way to get your name and your brand out--the reason is because of festivals and events.

This is a big deal because it literally hurts small business in the province. The "why stress" comments are a tad ignorant: Stress because laws and decisions like this limit your choices as a consumer.

As for the comments about Molson or Labatt's "hiding" behind the craft moniker and secretly selling their products at beer festivals, that really isn't the case--at least not in Toronto. There are dubious "crafty" products out there like Shocktop (AB InBev) but if you see them setting up booths at festivals, you'll know they're not craft (because they have money! A tip off will be the expensive-looking booths and gear and large-breasted women pouring beer instead of bearded dudes).

You may be interested to know however that there is call for more transparency from contract brewers so that, for example, they can't make it seem like they are an actual brewery in their marketing materials.

Lastly, that 8 Beers You Should Stop Drinking article has been widely debunked (GMO Sugars?), so please stop yelling.
Thomas replying to a comment from Ben / May 5, 2014 at 09:30 am
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That is exactly why people are wondering why the whining. Small Craft brewers know very well that they are getting into a very difficult very expensive business and that's their choice. The province is in the safe hands of Kathleen Wynne, no worrries....
pauly / May 5, 2014 at 03:32 pm
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agco ruins my life
Ben / May 5, 2014 at 03:44 pm
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I can't tell if you're trolling me or not...

"Small Craft brewers know very well that they are getting into a very difficult very expensive business and that's their choice."

If we're happy to keep things difficult for them and we essentially say "tough shit", then fewer people will choose to get into the business as a result and we as consumers suffer from less choice. The whole point is that it needn't be "very difficult and very expensive."
Out of the wild replying to a comment from pauly / May 5, 2014 at 03:47 pm
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Why if I buy two 6 packs of beer at the LCBO can't they charge me the 12 pack price?

If you ask for 12 beers at the beer store and you get two 6 packs they charge you the 12 pack price which is slightly cheaper then the price of two individual 6 packs.

Why am I getting scammed?

buddyrich / May 14, 2014 at 02:00 pm
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The lcbo is onerous and slow to get into but i have no problem with them controlling spirits and licquor sales. The privately owned beer store monopoly I do have issue with. I like the Quebec model of open wine and beer sales but controlled liquor sales at the SAQ

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