Opinion: The age of the Beer Store is over. The time for a better system has come

Stephen Beaumont is a veteran beer industry analyst, author and proprietor of the beer and spirits review site, BeaumontDrinks.com.

Premier Doug Ford’s recent decision to accelerate the opening up of beer sales in Ontario by paying off the Beer Store to the tune of $225-million seems more an overly expensive election bauble than it does a necessary course of action. But the commitment to calling an end to the retailing behemoth’s dwindling dominance is certainly welcome.

In more than 30 years of writing about beer in Canada and around the world, one of the most consistently challenging tasks I’ve faced has been explaining Ontario’s Beer Store to non-Canadians. Even for residents of regions where the government operates most or all alcohol retail, as with Sweden and its Systembolaget, or so-called “control states” such as Utah and Pennsylvania, the notion of a dominant beer retailer owned by the country’s largest brewers simply boggles the mind

Which underscores just how great an anachronism the Beer Store really is, not just a relic from another time, but an entity so at odds with modern retailing that it beggars belief by most of the world.

Established in 1927 as a brewery-owned distribution collective known as Brewers Warehousing, the name was changed to Brewers Retail in the 1940s, when the organization took over the previously independent stores charged with the sale of beer in the province. A further transformation took place in 1985, when it became the Beer Store, which is what the majority of Ontarians already called it.

While at one point the Beer Store accounted for about 90 per cent of the ale and lager sold in Ontario, it was never known for its joyful shopping experience. From the days when you would select your brand from an illustrated wall of labels, case sizes and prices, after which your beer was rolled out assembly line-style from the warehouse in back, to the modern walk-in refrigerators stacked with cases of six, 12 and 24, buying beer at the Beer Store has always been a process to be endured rather than enjoyed.

Yet through all of this, the market evolution that has seen 98 per cent of the chain’s ownership fall to the brewers Labatt and Molson, and the organization’s abject failure in developing even a marginally pleasant shopping experience, the Beer Store has somehow persisted. At least, until now.

With declining sales, worsening store environments and fewer outlets than there are grocery stores licensed to sell beer – and up to 8,500 poised to join that number over the next two years – the case for the continued existence of the Beer Store boils down only to bottle returns and distribution for restaurant and bar supply. And even then, the case is thin.

To address the distribution issue first, what the Beer Store was originally built to do, namely the warehousing and wholesale delivery of beer, is something it still does quite efficiently. If it fails, however, or if Labatt or Molson, or both brewers collectively, decide upon another path to market, then new distributorships will certainly arise to take its place, and indeed are likely in the planning already.

For the province’s 380 or so craft breweries, while this transition might initially present itself as a hardship, I expect it will be a boon in the long run, as they will be able to develop relationships with distributors who are able and willing to place them front of mind, rather than considering them an afterthought.

With bottle return, on the other hand, the situation is a bit more nuanced. While the proliferation of cans in beer packaging makes it less of an issue, Ontario’s brewers have long been justly proud of their deposit and return system for refillable bottles, which is facilitated in its entirety by the Beer Store.

A case can easily be made that the return of non-reusable packages such as wine and spirits bottles and beer, cider and seltzer cans may – and indeed perhaps would – be better off managed by a dedicated entity, although admittedly the same cannot necessarily be said about the reusable bottle supply. The creation of such an entity would have been well-served by a $225-million handout from the Ford government.

Still, if the only reason for propping up such a consumer-unfriendly and oligopolistic organization as the Beer Store is the continuation of the deposit and return of refillable beer bottles, the popularity of which is now rapidly waning, then I would suggest that organization is better off being laid to rest.

There are other organizations willing and able to do the job more capably, efficiently, and potentially with greater selection and more affable customer service. It’s time for them to get their chance.