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Posted June 9, 2014

Ontario Craft Brewers comments on key Ontario election viewpoints

Toronto, ON – The Ontario Craft Brewers have released comments  on various Ontario election platforms including removing barriers to growth and increased job creation, touching on retail system access, new points of access, distribution systems, and other retail channel potential.

  • The craft brewing industry is growing by leaps and bounds, creating great jobs and bringing exciting new products to markets right across Ontario. (We have over 10 per cent annual volume growth and twenty to thirty per cent in the LCBO).
  • The parties are all correctly identifying retail access as the most effective way to accelerate our growth.

General Points:

  • Small brewers are creating jobs in cities and towns across the province with over 1,000 FTE direct brewery jobs, representing approximately 30 per cent of the direct brewery jobs in over 40 communities across Ontario.
  • Comparisons to other jurisdictions show we are in great shape on the number of breweries and on consumer acceptance but our market share is half of what it should be. We attribute that to retail access.
  • We are determined to find a way to give Ontario consumers true craft beer stores, like they have everywhere else in North America.

IMPROVING ACCESS IN CURRENT RETAIL SYSTEM:

  • We want to continue to improve our presence in the LCBO; it is an excellent shopping environment.
  • We want increased presence and visibility in the province’s leading beer retailer, the Beer Store system, as it sells about eighty per cent of the retail volume and is the only place, besides our breweries, where consumers can purchase larger format offerings.
  • The Beer Store system has many benefits; however, it would be even better if our beer could come out from behind the wall in their “traditional format” stores by creating/converting to self-serve stores. (There are currently 100 self-serves, up from 75 about five years ago. Total number of stores is approximately 440.)
  • Of course there are other broad structural and governance issues, as a result of the ownership, that also need to be sorted out.

NEW POINTS OF ACCESS:

For some time now we have asked for the ability to cross sell each other’s products in on-site stores at our breweries; we are also asking for the right to open one off-site store per brewery. These changes, while quite helpful for smaller brewers, would have very small impact on the overall market and in no way are substitutes for the broader changes mentioned above.

This would accomplish three key results:

  • Open a market for smaller craft brewers who are not yet ready or able to sell in the larger systems.
  • Give consumers better access to our over 350 brands, including seasonals, one-offs, collaborations, etc.
  • Allow our brewers to build true ‘craft beer stores’ featuring a great selection of craft beer, like ones that currently exist everywhere else in North America, except Ontario.

Of course, we would like to sell in farmers’ markets as well.

DISTRIBUTION SYSTEMS:

  • Small brewers already have a number of rights to self -deliver and co-ship and co-warehouse. However, a few more specific permissions need to be given so that this can be extended to the LCBO and to bars and licensees.
  • The PC’s Bill 191 was referring to this, as were the Green Party’s comments.

OTHER RETAIL SYSTEMS POTENTIAL:

  • Over the last number of years, we have focused on improving access and structural changes at the Beer Store because government has ruled out broader changes.
  • We are leaving it up to voters and government to decide on any other fundamental changes to the retail systems, such as private liquor stores, more agency stores, grocery and corner store sales, etc.
  • We are happy to continue working with them on how best to implement any changes they decide to make.

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