E-Malt.com News article: Canada: Ontario has higher beer prices compared to Quebec

According to a study of University of Waterloo, Ontario residents pay substantially more for beer than people in Quebec because of the “cartel” of multinationals that controls Ontario beer retailing, The Globe And Mail reported on August, 14.

The study by economics professor Anindya Sen found that the average price difference in a 24-bottle case of beer between the two provinces is about C$9.50, or 27 per cent lower in Quebec.

Most beer in Ontario is sold through the Beer Store, which is owned by three of the biggest multinational beer companies, he said. In Quebec, beer is sold at grocery and convenience stores.

The Beer Store owners are getting C$700-million a year in incremental revenue because of this situation. Professor Sen said the Ontario government gets very little revenue from the sale of beer through the Beer Store, compared with what it earns from mark-ups at the provincially owned LCBO.

The profits are “going directly from consumer pockets to a consortium with majority ownership by foreign based firms,” the study concludes.

The Beer Store is owned by Labatt Brewing Co. Ltd., Molson Coors Canada, and Sleeman Breweries Ltd. (which is owned by Sapporo of Japan).

The monopoly prices charged by the Beer Store also generate economic inefficiencies in the marketplace. And there are concerns about whether local brewers have sufficient access to shelf space and the opportunity to promote their brands.

The study involved checking the prices of five beer brands over a 22-week period between December, 2012, and May, 2013. In Ontario, Prof. Sen looked at prices posted on the Beer Store’s website and at weekly price data from the websites of IGA and Metro stores in Quebec.

The average price was C$25.95 in Quebec, and C$35.56 in Ontario.

Beer Store spokesman Jeff Newton said the study also didn’t look at pricing in corner stores in Quebec, where beer tends to be more expensive than at big grocery stores. Over all, that makes the results “highly misleading,” and calls into question the C$700-million incremental revenue figure, Mr. Newton said.

An earlier survey by Ipsos Reid, conducted for the three big brewing companies and released in June, suggested that beer prices are lower in Ontario than in British Columbia and Alberta, and competitive with private stores in Quebec. That study looked at 14 brands in a variety of package sizes, and 90 retail locations.

The big brewers argue that allowing corner stores in Ontario to sell beer would boost the price in the province.

In many provinces, all retail beer sales are handled by government-regulated stores. In much of Western Canada, some licensed hotels also sell packaged beer.



16 August, 2013