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Posted January 12, 2015

Ontario Craft Brewers fully clarify stance on Beer Store

Toronto, ON – The Ontario Craft Brewers today announced they planned to stay the course by participating fully and exclusively in the process established by government. Below is the full media release in its entirety:

“We are looking for fairness in access and treatment for Ontario Craft Breweries and we want to bring Ontario craft beer out from behind the wall at The Beer Store,” says Cam Heaps, co-founder of Steam Whistle Brewing and Chair of Ontario Craft Brewers.

“The government of Ontario heard us when we asked for fundamental structural changes in retail access which will allow us to double or triple jobs and reach full market potential across Ontario.”

“We too have listened to the government and we heard them loud and clear when they said they plan to address retail access issues in this province. We look forward to continuing to work with them on a beneficial outcome to this process,” Heaps said.

According to media reports last week, Premier Kathleen Wynne “played down the Beer Store’s announcement” stating, “We have at this time a mission with Ed Clark who is reviewing this and other questions; we are going to wait on his report. This information we have today is just a small part of this discussion.”

Ontario Finance Minister Charles Sousa’s office issued a statement following the Beer Store’s announcement on Wednesday, Jan. 7, saying Clark’s panel would consider the Beer Store’s offer “in the context of its work.”

That is why we are reluctant to engage in any extensive public or private conversations other than those hosted by the government process.

Having said this, a recent press release and advertising campaign issued by TBS this past Friday, and again referred to over the weekend, contained a statement that needs to be corrected.
Specifically, TBS claimed that craft brewers had asked for ownership in the beer store and released a copy of a letter to the public which they claimed contained the request for ownership.

First, the letter was written to the Ministry of Finance and TBS was copied as a courtesy. Let us explain briefly the circumstances and context of this letter:

In late 2009, TBS issued a new user agreement which our members had a number of issues with, to the extent that a number of our members did not sign it. We believe this is the same user agreement that the brewers are being asked to sign today.

In the summer of 2010, we asked government if it had approved this new user agreement and they said they knew about it but had not approved it and further that they did not have the power to approve or disapprove it. They suggested we set up a user group to attempt to negotiate a new user agreement with TBS but declined to intervene directly.

We set the user group up in the fall of 2010 and hired a legal firm to help us write a proposed revised user agreement for these discussions. This was done over the fall winter of 2010/2011 and TBS knew that we were not looking for ownership in the system, but rather we were focused on a revised user agreement with government oversight and changed store formats.

We had ruled out asking for ownership for all the reasons mentioned in the most recent media articles. Essentially, we were asking that the Beer Store be turned into a regulated monopoly whereby the owners could charge a management fee only.

TBS has had this proposed revised user agreement since early 2011 and our ask of them, and government, has not changed since then in any follow up discussions or processes.

The letter of Jan 17, 2011 referenced in their press release was in fact no more than a summary of the research that the law firm prepared to assist with background for discussions related to a revised user agreement.

We were very careful in the conclusions of that letter not to ask for ownership as we had already ruled it out. Please re-read carefully the conclusion contained in that letter.

Further, the research showed that the consolidation of ownership and control in TBS seemed to be clearly in contravention of the direction of the legislature and nowhere in the legislation was consolidation allowed.

Unfortunately the legislation was and still is “silent” on excluding new brewers and on the treatment of non-owner users. This is the root of most the issues that we still face in gaining meaningful and full access to the TBS system today.

“We are on the cusp of an incredible expansion to this industry,” says Heaps. “We are putting our faith in the government to level the playing field, unlock our full potential to create jobs and reach market potential. Further we are confident the process that the government has put in place is the best forum for these decisions. ”

SOURCE: Ontario Craft Brewers

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