It’s turning out to be the year the Beer Store finally came under major scrutiny.
With light finally shone on the Beer Store’s lucrative deal that restricts beer sales at the LCBO and the close links between Ontario’s political parties and the major brewers, people are asking serious questions about whether the current system should continue. Just last week, Toronto lawyer Michael Hassell put the province on notice that he would be bringing a legal challenge to s. 3(e) of the Liquor Control Act that grants Brewers Retail Inc. monopoly status as the only private company able to sell beer to the public without brewing it. The draft notice calls it “an unreasonable restraint of trade, contrary to equitable principles of fairness and contrary to public policy.”
Hassell is also a co-owner of Barge Craft Beer Distribution and Retail Co. Ltd. Since it doesn’t brew beer, the act prohibits the company from distributing and retailing craft beer in Ontario as it seeks to do. The company argues the Beer Store monopoly is detrimental to Ontario’s economy.
The lawsuit comes, of course, amid not only increased scrutiny of the Beer Store’s lucrative arrangement but also the provincial government’s effort to wrestle as much as $100 million a year from it through a licensing fee. As a result, we could see the province win more money from the existing system or, if Hassell is successful, a significant takedown of the current arrangement. The province, of course, is likely to push for more money from what we have now, but it’s also worth considering whether a different arrangement could improve the beer retailing and distribution system while also delivering more cash to the government’s coffers.
Either way, it’s clear we’re at least going to have something better than we have now. The Beer Store has already offered up limited and still unsatisfactory change while the legal and political wrangling should result in a better deal for the province and, potentially, consumers. Let’s hope the brewers realize it’s better to negotiate a way out of a mess that’s likely to worsen rather than battle their growing list of adversaries.
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Glenn Kauth
