While Ontarians may be excited about the changes to beer sales announced today, some craft brewers say they still face challenges in bringing their products to the marketplace.
On Thursday, the government announced that in an effort to maximize the financial potential of its holdings a report recommended revamping beer sales in the province. The changes will allow 450 grocery stores sell beer during the Beer Store’s hours and improve access for craft brewers. Currently, the Beer Store allots seven per cent of its shelf space to craft brewers and under the terms of the new rules that will increase to 20 per cent.
The Beer Store must also make craft beer a category and scale costs of listing beers to the size of the brewery. Small companies across the province will also be allowed to sell beer on-site at all locations.
The Ontario Craft Brewers, a group of 50 breweries, has publicly said it “enthusiastically welcomed” the changes, but two local companies are expressing more cautious feelings towards the new regulations.
Owner of Toboggan Brewing Company Mike Smith says beer sales may be expanding, but craft brewers still face distribution challenges.
“A small craft brewery, if we wanted to sell our beer in Kitchener or Ottawa or Toronto, we have to deliver it ourselves,” Smith says. “If someone wants a small quantity, you lose money distributing it.”
Smith says the Ontario Craft Brewers have been pushing for the ability to set up stores where multiple companies can sell their products together and create a distribution network, but so far it hasn’t materialized.
Co-Owner of Forked River Brewing Company Dave Reed also listed distribution as one of the main problems facing small brewers.
“The biggest issue is distribution and additional outlets are always a good thing. The biggest thing is we’re still a small company so we direct deliver to all our LCBOs and Beer Stores that we deliver to. We’ll find out the details how things are rolled out as far as grocery store chains,” he said.
Reed also has concerns about the access craft companies will have in grocery stores and wonders if they’ll be shut out.
“Are they going to be going for the big status quo of what is mostly sold which is sort of the macro lagers, or are they going to be looking for Ontario craft beer? We’ll see what kind of store presence they get.”
One of the other issues facing Forked River Brewing Company specifically is a lack of flexibility regarding retail space. The new rules say brewers can sell their products on-site, something Forked River is already doing, but would like to improve upon.
Reed says they planned to take over another spot in the plaza where their brewery is located.
“We needed additional space and we thought we would improve our retail presence by expanding in our building which is obviously on the same parcel of land, but that was interpreted differently I guess by the Alcohol and Gaming Commission,” he says. “They viewed it as an off-site retail store. So we’ve actually been turned down as far as opening that up.”
“It’s in the same building, 200 feet away from where our brewery is. We’re pretty upset and disappointed about that decision.”
As for whether he feels the province is intentionally trying to exclude craft brewers from the playing field, Reed says he hopes not.
“The big brewers, the foreign companies, they were allowed to…buy up the Canadian brewers here and they paid a lot of money for that distribution. But is it fair?” Reed questions. “I don’t think it is. I think the customers are speaking that they want access to craft beer, that it shouldn’t be hidden or not promoted.”
“This is where the job growth is in Ontario, it’s not with the big brewers.”