Brewers Retail Inc., doing business as The Beer Store, is a privately owned chain of retail outlets selling beer and other malt beverages in the province of Ontario, Canada.
Founded in 1927 as Brewers Retail, it was owned at its inception by a consortium of Ontario-based brewers. It currently operates as a unique open retail and wholesale system primarily owned by three brewing companies: Molson, Labatt, and Sleeman, which are owned by multinational corporations. It is also partially owned (under 0.02%) by 30 Ontario-based brewers.http://www.thebeerstore.ca/about-us "The Beer Store" Under the ownership model, all qualified brewers are free to list their products without discrimination and to set their own selling prices,"Master Framework Agreement" Ontario Ministry of Finance subject to Liquor Control Board of Ontario (LCBO) price approval that must comply with legislated minimum and uniform pricing requirements.Flanagan, Greg (February 10, 2014) [www.thebeerstore.ca/.../default/files/pdfs/TBS_AlcoholDeregulation.pdf "TBS Alcohol Deregulation"]. Retrieved May 2, 2017
Under Ontario's Liquor Control Act, The Beer Store was formerly the only retailer permitted to sell beer for off-site consumption, other than stores on the site of a brewery, locations of the provincial government-owned LCBO, and LCBO-authorized agency stores in certain smaller communities. The act and the company's articles of incorporation further stipulate that Brewers Retail cannot sell "hard liquor" (spirits) or consumer goods (like groceries). Brewers Retail adopted the current name in 1985.
Amendments made to the Liquor Control Act have since allowed for the sale of single and 6 packs of beer at select supermarkets in Ontario. That was done to enhance customer access and convenience. The Beer Store, however, continues to maintain pricing exclusivity in providing consumers discounts on larger packs of beer, along with retail partners, agency stores, combination stores and manufacturer outlets. What distinguishes the Beer Store is its characterization as a sort of "beer commons."Flanagan, Greg. (2014) Alcohol Retailing Deregulation: Implications for Ontario. A 2013 Angus Reid survey commissioned by the Ontario Convenience Stores Association found that only 13% of Ontario residents were aware that "The Beer Store monopoly is not a government-owned enterprise." The Beer Store operated approximately 450 outlets in Ontario and made a gross profit of about $396-million in 2016.https://spiritandoak.com/2019/05/03/a-deeper-dive-the-beer-store/, A DEEPER DIVE: THE BEER STOREhttps://www.theglobeandmail.com/news/politics/the-beer-store-everything-you-need-to-know-about-ontarios-lucrative-monopoly/article23248112/, The Beer Store: Everything you need to know about Ontario's lucrative monopoly
In early June 2019, the provincial government passed legislation to terminate its 10-year contract with the company, six years prior to expiry; continued negotiations with TBS were underway prior to actual enactment of the legislation. This step was a prelude to making beer widely available in variety stores in Ontario.
In May 2024, the Ontario government announced an agreement with Brewers Retail allowing beer, wine, cider, and ready-to-mix alcoholic beverages to be sold, before the scheduled end of the master contract, in 8,000 corner stores, grocery stores, gas stations and eventually big box chains in exchange for $225 million in compensation being paid to The Beer Store. Sales in grocery and corner stores began in September 2024. As a result, The Beer Store' s market share is expected to fall from 41% in 2024 to 15% by 2026-27. Under the agreement, The Beer Store will continue to operate at least 300 stores until the end of 2025, after which there will be no restrictions on the number of outlets that may be shut down. Company
The Beer Store follows an open ownership model whereby any qualifying brewer is allowed the opportunity to become a Beer Store shareholder, but three multi-nationals own the vast majority of shares: Molson-Coors, Labatt (owned by Anheuser-Busch InBev) and Sleeman (owned by Japan's Sapporo). Some smaller brewers also own shares, making the company a consortium of 30 Ontario based brewers. In order to qualify, the brewer must operate at least one facility in Ontario, conduct the full brewing process and sell beer through the corporation. Valid Ontario and Canadian manufacturing licenses are required and the brewer must not produce beer in any other jurisdiction, or else meet minimum annual capacity and production goals.Master Framework Agreement (September 22, 2015)
The Beer Store is governed by the Liquor Control Act (LCA) and is therefore regulated by the LCBO.Liquor Control Act, RSO 1990, c.L.18
As of December 2016, the company operated over 450 retail stores which sell beer to the general public. The Beer Store (TBS) is the largest distributor of domestic beer in Ontario, selling to over 20,723 licensed customers. Although many imported beers are available at the Beer Store, the LCBO serves as the primary importer. Once imported, the product is then sold to the Beer Store for further distribution. As the primary retailer of Ontario, The Beer Store sells more than 720 brands of beer and over 1,000 home consumer beer selling units from 180 different brewers around the world.The Beer Store (August 16, 2017) Larger Beer Store outlets typically stock around 600 beer selling units with the smallest Beer Stores stocking around 200 units.
TBS has a policy of accepting any brewer in the world to sell its product, as long as the brewer meets the requirements set by the LCBO. Furthermore, unlike many other retailers, a brewer is given flexibility with regards to how many and which stores it would like to sell its product in. Because The Beer Store operates on a cost-recovery basis, listing fees for smaller breweries can be kept at a minimum. In 2016 TBS implemented a new lower tier rate for qualifying small brewers that is significantly less than the basic service rate paid by the larger brewing companies.Shareholders Agreement: Brewers Retail Inc. (January 1st, 2016) Smaller breweries who produce under 1,000,000 hectolitres a year of beer qualify for this lower tier rate on their first 50,000 hectolitres of beer produced that year. Additionally, qualifying small brewers who produce under 10,000 hectolitres a year are now provided with 2 free guaranteed product listings at 7 of their most proximate Beer Stores.
TBS employees have long been unionized and represented by United Food and Commercial Workers (UFCW) Local 12R24.
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, which was then using The Beer Store brand as early as 1985 by the Bill Davis government.
The Beer Store today
Operating model and pricing The Beer Store claims it operates on a self-sustaining basis as an efficient distributor and retailer of beer in the Province of Ontario.TBS Financial Statements Operations take place on a fee for service basis, requiring brewers to pay a fee to sell their products through the Beer Store. The Beer Store publishes an annual rate sheet outlining their necessary financial requirements and consistency with annual budget and business plans.
The open nature of the Beer Store combined with pricing freedom for individual brewers is claimed to have created a highly competitive beer pricing market. The Beer Store processes hundreds of price changes every month and the average retail selling price in the system has only increased 2.8% from 2003 to 2014 while the general rate of Ontario inflation over the same period was approximately 20%. Ontario's uniform pricing regulation precludes price competition between beer retailers such as the LCBO and the Beer Store. Price competition between individual brewers and brands within the Beer Store system is claimed to be significant, but there is little real competition as there is little variance in price both over time and between brands of similar quality. The system does benefit remote areas in that lower-priced products are not restricted to larger outlets in urban centres, but are available at all Beer Store locations throughout the province. Hence rural consumers benefit as much (or as little) as urban consumers.
Estimated profits The Beer Store states it operates as a not-for-profit entity. While this may be true, critics have argued that the TBS system is structured to support relatively high prices and profits of the breweries to the detriment of consumers. A series of studies, authored or co-authored by professor Anindya Sen of the University of Waterloo, estimated that the near-monopoly the Beer Store has in Ontario allows its owners to capture between $450 and $630 million in “additional profits” each year.Sen, Anindya "An Economic Analysis of Increasing Competition in Retail Liquor Sales in Ontario: Part I of a Two-Part Study for the Ontario Convenience Store Association", June 2013Sen, Anindya "An Empirical Analysis of Beer Price Differentials Between Ontario and Quebec: Part II of a Two-Part Study Conducted for the Ontario Convenience Store Association", August 2013Sen, Anindya and Masson, Paul R., "Uncorking a Strange Brew: The Need for More Competition in Ontario's Alcoholic Beverage Retail System", C.D. Howe Institute Commentary No 414, August 2014
The first of the Sen studies was commissioned by the Ontario Convenience Store Association and surveyed six 24-pack domestic brands from IGA and Metro Quebec flyers compared to the same brands at The Beer Store in Ontario over a 22-week period in 2013. Sen corrected tax analysis associated with the original study and added three import brands from a Costco in Quebec in subsequent analysis. Correcting for tax differentials between the two provinces, positive price differences of $1.3 - $3.3 were found to exist between their average price of 24-bottle packs of brands including Molson Canadian, Molson Dry, Coors Light, Budweiser and Bud Light. Using Molson Canadian as an example, the adjusted 24 pack price from Quebec IGA and Metro flyers was found to be $26.81 versus $28.12 for Ontario TBS locations.Earnscliffe Strategy Group "Comparing Beer Prices Between Ontario and Quebec: Comments on the Ontario Convenience Store Association Study", November 2013
In response to Sen's analysis, The Beer Store commissioned a survey of Quebec – Ontario beer pricing by Debra Aron, an economist with Navigant Economics, which reviewed average TBS home consumer beer prices for all of 2013 in comparison to all beer sales at Quebec's seven largest grocery chains, utilizing Neilsen data, for the same period. Aron's study concluded that the average TBS beer prices, excluding all taxes, were 18% less than those at Quebec grocery stores in 2013 or on a per case basis approximately $4.40 less per case of 24 cans.Aron, Debra J., "The Price of Beer in Ontario and Quebec", May, 2014, Navigant Economics
Reports from 2015 indicated that 80% of beer sales in Ontario were made at the 450 outlets of The Beer Store. An estimate published in 2017, provided this summary as to profitability, "Add the cost savings together with the extra market share and you get $396-million. That is how valuable The Beer Store is to its owners."
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