It was late last year when I decided that becoming an import agent (also known as a manufacturer’s representative) would be something worth pursuing.  Since the founding of Bar Towel a number of years ago, we have heard many tales about what it was like to do business with the LCBO from an importing standpoint.  There were some positive experiences, but many frustrations as well.  There were stories about rejected beers, strange policies and secretive decisions.  But most of the recollections were shrouded in mystery – bits and pieces of what went on, but never the full story.

It’s important to note that the LCBO manages the flow of beer into our province.  Never forget that the “C” in LCBO stands for control.  The LCBO makes decisions on behalf of consumers regarding what beers we can drink here.  The beers available at your local store, the beers that come out in seasonal releases, are all chosen by the LCBO.  As a consumer, I wanted to better understand the decisions the LCBO was making for me.

In December 2008 I submitted a formal request through the Freedom of Information and Privacy Office of the LCBO.  I asked for the LCBO to disclose the beers that were considered and rejected for both the seasonal and general listings for both 2007 and 2008.  The seasonal and general release beers are chosen by the LCBO based upon submissions by importers.  The beers that hit the shelves are the ones that the LCBO deems fit for release.  Other beers are rejected and we do not get access to them.  After paying the $5 fee and discussing my request with someone at the LCBO, it was rejected on the grounds of not wanting to disclose third party information.

This rejection was the catalyst for becoming an agent.  I founded Free Our Beer last summer as a way of bringing to light some of the shortcomings of the beer retail system, from a craft point of view.  I wrote a number of stories based upon personal experience and observations, but I knew there was more out there worth discussing.  Becoming an agent, I believed, would give me increased access to how the LCBO system works in Ontario, which I could in turn document on Free Our Beer.  Hopefully I can shed some light on how beer is treated in this province.  Maybe we can affect some positive change for a beverage that we are all so passionate about.

So now I am officially an agent (actually its my corporation, Cecktor Limited), as the Alcohol and Gaming Commission of Ontario issued my Manufacturer’s Representative license on March 6th.  It has taken a few months to get to this point, and I’ll tell you about that shortly.

Well, Free Our Beer is going to get a lot more exciting in the coming weeks and months. As announced here and here, Cecktor Limited, my corporation, has been granted a license to represent a manufacturer from the Alcohol and Gaming Commission of Ontario (AGCO). What this means is that I am now an importer.  And Garrison Brewing of Halifax, Nova Scotia, has agreed to have us as their exclusive agent in Ontario.

Why this is exciting is one of the reasons I am doing this is to attempt to get inside the system to shed some light on things for Free Our Beer. That, and to do what we can to help bring new and interesting beers to the Ontario marketplace. But you’re going to find out what goes into actually getting new and interesting beers into the marketplace. There will no doubt be lots of tales to come.

So stay tuned, I’ll have some posts shortly of what it was like just to get to this point.  In the meantime, why don’t you order a case of Garrison through the new private order, now open at BarTowelImports.com?

Recently I was in The Beer Store staring at the famous label wall.  For those who don’t know, the “label wall” is the menu of beers that are available at The Beer Store.  It’s a large grid with labels of every brand, with their packaging formats and pricing right below.  It’s a poor retail experience as it eliminates browsing or looking at the packaging of the beers available (except for the few in the Ice Cold Express).  You basically need to know what you want before going in, as the label wall doesn’t do anything to help you choose.

Generally this works to the advantage of big brewers, as consumers will probably order what they know and shy away from trying new products they aren’t familiar with and can’t see.  But there’s something else at The Beer Store now that even further keeps craft beers away from the consideration set of consumers – The Big Ten.

The Big Ten is a section of The Beer Store’s label wall dedicated to, presumably, their top ten selling brands.  This section has a larger prominence on the wall, bigger label display sizes and even written brand descriptions.  The Big Ten are: Coors Light (Molson), Canadian (Molson), Budweiser (Labatt), Blue (Labatt), Carling Lager (Molson), Lakeport Pilsner (owned by Labatt), Keith’s (owned by Labatt), Bud Light (Labatt), Lucky Lager (Labatt) and Corona (represented in Canada by Molson).  That’s 6 brands of Labatt, 4 by Molson.

Now I won’t argue that the top selling brands are actually all from the owners of The Beer Store (Molson and Labatt), but it is quite obviously self-serving to promote these brands above all else.  The fact that they are the top ten selling brands gives The Beer Store a convenient excuse to showcase their largest brands and no others.  The Big Ten are also the only brands featured on The Beer Store’s web site as well.  If you want to find another brand, you must search for it, not unlike the in-store experience.  You need to know what you’re looking for in order to find it.  How about a feature wall “top ten brands you haven’t tried before”?  Not very likely.

The Big Ten is prime example of The Beer Store ignoring the interests of the craft beer consumer.  It keeps the large brands of The Beer Store owners front-and-centre and does nothing to help a consumer try something new.  We need to keep pushing to allow for competition in the beer market and allow for specialty stores which will give craft beer the prominence it deserves.

The Beer Store claims to be “The Ultimate Source for Beer in Ontario” and we discussed one of the reasons why this is unfounded.  Another one is The Beer Store’s claim that the beer selection they have is one of the best in the world.

Let’s put aside the fact that The Beer Store don’t even stock certain styles of beer – for example, you can’t get a Trappist beer at The Beer Store, or a lambic for that matter.  That’s another story.

But from a numbers perspective, The Beer Store claims to have 350 brands available.  On their web site they audaciously claim that “It would be difficult to find a larger selection of beer anywhere in the world than at The Beer Store“.  This statement is untrue for any beer connoisseur.  It is, in fact, not difficult to find a larger selection of beer. 

Keep in mind that many of the brands that comprise The Beer Store’s tally include sub-brands of Beer Store owners Molson, Labatt and Sapporo.  Taking a glance through their web site reveals that at least 107 brands are of the Beer Store owners, representing about 30% of brands available.

On to finding a larger selection around the world.  At Premier Gourmet in Buffalo, they list 1,010 brands available – about 188% more than The Beer Store.  At Sam’s Wine in Chicago, they list 483 domestic craft beers, 720 imported craft beers, 112 macrobrews and 62 “other” beers. That totals 1,377 beers – about 293% more!  And even the Beverage Warehouse in Los Angeles lists 276 domestic beers and 309 imported beers – 585 total or 67% more.  These are all stores that I’ve been to myself – certainly there are others from around the world that would easily beat The Beer Store’s total.

It is infuriating that The Beer Store makes a claim like this to imply their selection is world-class.  Under a open beer retail system, we might see stores like Premier Gourmet, Sam’s Wine and Beverage Warehouse in Ontario.  Until then, we are stuck with The Beer Store’s 350 brands.

News broke last week by Dean Beeby of The Canadian Press that the recent minimum price that beer can be sold in Ontario by the case, up to $25.60 from $24.00, was implemented by the LCBO on the recommendation of the Ministry of Finance.  This has sparked some discussion on Bar Towel and quite a few news articles in Toronto.

I’ll let you read the articles about what happened.  But there’s a few things troubling about this.

Firstly, the news of the increase wasn’t news at all – at least from the organizations responsible.  The LCBO’s spokesperson said that they don’t issue press releases for price increases.  This is evident through a search of Canada NewsWire, where they issue releases.  But the increase is supposedly part of their “social responsibility” commitment.  However, on the LCBO’s What’s New page in their web site’s Social Responsibility section, there’s nothing to be found either.  There’s nothing on the Ministry of Finance site or the AGCO’s site as well.  The only notice was on the LCBO’s Trade web site, a site meant for industry and not consumers.

It’s unfortunate that it took the investigation of a reporter to get the LCBO to talk about this.  If that wasn’t the case they probably wouldn’t have said anything publicly.  As the organization that has sole control over alcohol in Ontario this lack of openness is unfortunate.

Secondly, and a big one, is that the price recommendation came from Ontario’s Ministry of Finance.  Now it’s very troubling that this wasn’t publicized – it took a request under Ontario’s Freedom of Information act to get this information.  But as the reporter of the article pointed out, this raises doubts about the LCBO’s relationship with the government.  The LCBO spokesperson says that they make their own pricing decisions.  But the Ministry made this recommendation and the LCBO implemented it right away.  What could the Ministry ask for next that the LCBO will just put into place?  The LCBO, I believe, is supposed to represent the best interests of Ontario consumers.  To say that the price increase is for “social responsibility” yet it is rooted in a request from the finance ministry is fishy.  The Ministry of Finance’s mandate is to “promote a dynamic, innovative and growing economy and to manage the fiscal, financial and related regulatory affairs of the Province of Ontario”.  Therefore this decision is about money, not social responsibility.

Thirdly, and this is where the conspiracy comes in, is the possible involvement of the big brewers in this decision.  Discount brands in Ontario have been thriving in recent years – there are frequent “buck a beer” advertising platforms that have been quite successful.  Laker, a discount brand in Ontario, even had a web site called abuckabeer.ca – this is now lowestlegalprice.ca.  It’s been said that the big brewers have been losing ground and money fighting against discount brands.  Having the minimum price raised eliminates a obviously successful marketing tactic but also helps level the playing field between the big brewers’ premium brands and discount brands.

Unfortunately what all this does is continue to highlight is the fact that Ontario doesn’t have an openly competitive market for beer and the force of the government is strongly evident.  Remember, the “C” in LCBO is “control”.  Don’t forget this – it is a telling reminder of how alcohol is treated in this province.

We discussed in November about the LCBO’s e-commerce web site, LCBOgifts.com.  Now Vintages, the LCBO’s premium wine and spirits division has launched an e-commerce web site of its own.

Called Vintages Online Exclusives, the site “offers an additional portfolio of premium fine wines and spirits”, presumably products that aren’t regularly available in stores. The site promises new products available every two weeks, and currently has 418 products available.  There’s a handy product counter in the top right corner of the home page.

What makes this site not quite the same as traditional e-commerce is that it does not deliver purchases to the home, instead to any LCBO store. 

Looking at this site I am impressed by its concept.  It offers a new set of products that consumers can get anywhere in the province – so if a wine connoisseur lives in city where the LCBO stores don’t have a strong selection, this site allows them to get some new things to try.  And if you don’t want to go to the trouble of tracking down a particular product if its not at your local store, this can get it there.  The inventory of Vintages Online is even integrated with the LCBO’s main web site, so a product searched on LCBO will come up as available to buy online through Vintages.

What’s unfortunate about this, however, is since Vintages does not offer beer (they discontinued beer support a few years ago), there’s no premium beer available through this service.  

It’s a real shame since beer would particularly benefit from this kind of service.  Often it is difficult finding the LCBO’s beer seasonal releases in smaller stores, leaving consumers driving from store to store in an attempt to track them down.  But more importantly, this kind of system would be perfect to test small batch sales of new or different beers – the LCBO would not have to go to the trouble of full distribution roll-out and shelving.  This would have the potential of putting different beers on the market, see how they perform and then make a decision to release it.  As it stands the LCBO generally favours products that have sold well in the past rather than taking a chance on niche beers.  This would be a perfect test channel for niche beers.  But we’re used having beer being left out, and here’s another example.

In today’s Toronto Star, Josh Rubin has written an article about the latest Ontario Craft Brewers’ Discovery Pack.  This pack, the second one to be released, is a special six-pack with different beers from a number of Ontario craft breweries.  Sold exclusively at the LCBO, the first one was a success and it’s hoped that the second one will be too.

What’s interesting is the comments made in the article by Lisa Dunbar, marketing director at the Ontario Craft Brewers.  According to the article, she says that The Beer Store “just doesn’t do as good a job selling craft beer” and that “it can be prohibitively expensive for small breweries to list their products there”.  She goes on to say that the LCBO “is just a stronger partner for us”.

It is great to see someone like Ms. Dunbar come out and discuss some of the challenges that small breweries have with The Beer Store.  It is a shame that in Ontario a mix-pack of locally-produced beers would not be successful in our largest beer retailer.  It is important that Ontarians understand that The Beer Store is set up to meet the interests of large, mass-produced beers, not small, local craft brews.

As we originally discussed in July, Beau’s was having serious challenges with The Beer Store and Beau’s unique swing-top bottles.  Since Beau’s does not sell their beer in The Beer Store, they were refusing to give them back to Beau’s when customers return them.  

Good news for Beau’s however.  As Beau’s reported, as did CTV, Beau’s has created a unique program with Operation Go Home, a social enterprise for homeless and at-risk youth in Ottawa.  Under the program called BottleWorks, customers are encouraged to bring back their swing-top bottles to Operation Go Home, with $0.40 of the deposit going to Operation Go Home, and the bottles returning to Beau’s for reuse.

Although this is a great program for both Beau’s and Operation Go Home, it is unfortunate that it has come to this at all.  The Beer Store, being a private enterprise and virtual monopoly, is able to dictate the rules around beer bottle returns with no regulation or explanation.  In the CTV article, Ottawa MPP Madeleine Meilleur was quoted saying that “BottleWorks is a project that works,” and that it is “innovative, it is collaborative, it is smart.”  Let’s hope that Ms. Meilleur can continue to be a supporter of craft beer initiatives in government and recognizes the faults of The Beer Store in this instance.

In Ontario it is the passion of the brewers, bar owners and beer lovers that drives interest and innovation of beer in the province.  The “system” only puts up roadblocks such as The Beer Store’s return policy.  It’s the creativity of brewers such as Steve Beauchesne to make things work despite the challenges of doing business here.  Well done Steve.

The CBC (Canadian Broadcasting Corporation) has an extensive online archive of TV and radio clips from their broadcasting history.  One of the topic areas that’s available is entitled “Selling Suds: The Beer Industry in Canada” that covers clips from 1961-2005.  It’s very interesting to see some of changes to the industry over the years.  Something that has never changed, however, is the control that the government has over the industry through the LCBO and The Beer Store.  We can only hope that there will be a news story about this change in our lifetimes.

Thanks to Jon Walker over at Bar Towel for the find.

Today marked the completion of the acquisition (PDF) of Anheuser-Busch by InBev, creating the world’s largest brewing company, now named Anheuser-Busch InBev.

This also makes the world’s largest brewer the 48.5% owner of The Beer Store. Along with co-owners Molson Coors and Sapporo, The Beer Store continues to distance itself anything remotely Canadian.

Remember folks, when you walk into a Beer Store you are entering a mega-corporate entity that has a virtual monopoly in the marketplace, not a government organization or the local retailer that sometimes people think it is.