Monopoly: Canadian Edition


The Beer Store and the LCBO have been staple components of my environment for as long as I can remember. The first recollection I have of the former is when I was at least smart enough and old enough to take note of how blatantly uninspired the establishment’s name was. I never gave much thought to the LCBO until a long car ride with an employer during which (like your grandpa on a road trip) they quizzed me and the other employees on anything and everything, including what the business’ title stood for (it took longer for us to figure it out than I care to admit). I grew up in Caledonia, a small town in which you couldn’t really miss either store front, given that they were two of only a few dozen businesses along the main street that is literally bookended by Tim Hortons.

Within the past few months, however, anyone who hasn’t bothered to notice the inherent oddity in the province-wide monopolies is getting wise. As NOW Magazine’s Jonathan Goldsbie has noted, The Beer Store is not unlike the Catholic school system, which for so long had been an accepted part of Canadian culture unworthy of scrutiny except by those with a bias — independent craft breweries for the former, atheists and non-Catholics for the latter.

For the record, consumers in Ontario are sold their beer by foreign entities, with Labatt Brewing Company, Molson Coors Brewing Company and Sleeman Breweries owning the sum total of the company.

Together, through their quintessentially Canadian front, they sell 80 per cent of the province’s beer alone, and collect 100 per cent of the wine and liquor bottle returns. The case of the church’s once ubiquitous role in education sends a hopeful message to the plight of local beermen, as progress is clearly being made.

During his time as Speaker of the Legislative Assembly of Ontario, Steve Peters hosted four annual craft beer tastings at Queen’s Park, seemingly an enjoyable event for politicians, including the Premier, who further endorses local companies and product. However, in 2011, a Labatt executive (again, a foreign, not in the least bit an Ontario-based company) confronted Peters in Dalton McGuinty’s office to complain about the presence of craft beer on provincial government property. How dare he promote Ontario brewers in a province whose beer is supplied from beyond their borders?

In addition to bizarre stories like this and other news on The Beer Store showing up these last few months, as well as editorials on the subject just like this, even the organization itself has had recognize the odd convenience of the situation, a clear sign that they are not invulnerable to public pressure. Recently, in response to the mounting attention their outdated model had garnered, the company made an offering to Ontario brewers to buy a tiny percentage, in the form of class E and F shares and three boardroom seats (two for large brewers with E class share, one for small brewers with F class share). Molson and Labatt each hold five seats, and Sleeman has two, making it unlikely that any of the incoming Ontario brewers could ever gain any real amount of power on the board simply by representation.

Gary McMullen, President and founder of Muskoka Brewery, told Business News Network that he’s not interested in buying an F class share that his company qualified for, saying, “It’s kind of pointless. It’s a bit like showing up at the annual meeting and not even being able to get a muffin from the muffin table”.

Despite its once camouflaged presence fitting in perfectly with the Canadian business backdrop, The Beer Store’s time is surely limited, especially in an area such as Niagara, wherein craft beer is popular and the selection is varied. It’s only a matter of time until public opinion shifts so significantly that it cannot be ignored.

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