craft beer toronto

What supermarket sales might mean for local brewers

Earlier today, The Toronto Star published an article in which Martin Regg Cohn claimed an unnamed source informed him that large grocery stores will begin selling wine and beer in a plan that might be part of the upcoming spring budget.

Torontonians thirsty for changes to our province's long-outdated beer retailing system were quick to rejoice at what seemed like positive news. But is it really something worth getting excited about?

The idea to allow beer in some of the province's larger grocery stores means putting the control of Ontario's beer sales in the hands of yet another third party and, as a result, local brewers' reactions to the news were mixed.

Jason Fisher, owner of the Indie Alehouse, told me he has concerns about the plan. "My main question," he told me, "is why can't local Ontario brewers have their own chain of retail stores? Molson and Labatt are allowed to own stores that sell beer, and now Loblaws can sell beer? Why can't smaller breweries just open their own stores?"

"[Grocery stores] will likely just be another middle man for consumers and manufactures and it will mean less profit for the people making beer and ultimately higher prices for consumers."

John Hay, the president of The Ontario Craft Brewers, issued an official response today that reiterated his members' commitment to working with the province, but laid plain the need to have brewers at the heart of any changes. "We do not want to be trapped in the distribution system of any large players," he said in a statement emailed to media.

You can forgive local brewers for being less than enthusiastic about these potential changes in a retail environment that's seen many changes promised then taken away over the years.

"It's fun to sit back and read the Star's piece and hope that even more changes are happening in this exciting industry," says Troy Burtch, who handles Sales and Community Management for Great Lakes Brewery. "But I guess we'll have to wait and see what really takes place."

If such a change were to happen, there's likely good cause for skepticism about any real change to the current retail market. Given that grocery stores charge stocking fees, Torontonians would likely see the same local breweries that are currently enjoying success at The Beer Store on the shelves of the grocery store since they'd be the ones with the distribution and volume necessary to meet the demand of supplying large retailers.

Michael Gurr, who handles Operations at Kensington Brewing Company , says his company is also cautiously optimistic about the news. "Questions remain about access to this system for small breweries," he tells me via email. "Large grocery store chains are notoriously difficult on their suppliers, setting unfavorable payment terms and demanding high listing fees to squeeze every dime of value out of their partners. The reality is that, as a small brewery it would be difficult for us to compete in this environment."

Similarly, anyone familar with the province's current beer scene might easliy see how this change could be manipulated in favour of the big brewers who currently own the Beer Store. That is, big brewers who currently peddle their influence at Queen's Park, in bars, and elsewhere might easily use their deep pockets to influence privately-owned grocery stores into granting them the sort of near-exclusivity they currently enjoy at restaurants, bars, and sports venues in the province.

The true cynics among us might already foresee the forthcoming "Loblaws-Labatt's Partnership" or Metro-Molson Alliance" press releases.

Ultimately, the news seems positive for makers and drinkers of Ontario's beer--as Gurr puts it, "If I have one more opportunity to sell beer today than I did yesterday, that's a good thing." But it seems far from the sort of sweeping change makers of local beer have been clamouring for and, if history has taught us anything, it's probably in our best interests not to get too excited just yet.

Ben Johnson also writes about beer over on Ben's Beer Blog. Follow him on twitter at @Ben_T_Johnson.

Photo of Left Field Brewery by Matt Forsythe

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