I used to hate the LCBO. Growing up in Ontario, the government monopoly on liquor sales struck me as all kinds of wrong. In comparison, Montreal seemed like a mecca of liberal ideals – a lower drinking age, cheaper alcohol, beer and wine for sale in every corner store, and parks full of picnickers bottle in hand.
After living in Montreal for years I came to learn that the grass isn’t all that much greener. Like the LCBO in Ontario, the SAQ is a government monopoly and the sole importer for the province, and they’re doing an even worse job of serving the beer lover than the LCBO is.
So how did Montreal become the beer capital of Canada, second only to Denver and Portland in breweries per-capita in North America? Why have Quebecois breweries had so much more success locally and internationally?
One handy reminder that prohibition wasn’t so long ago is the extremely strict regulation on the movement of alcohol across provincial borders. In fact, it’s technically illegal for you or me to drive across a provincial border with a bottle of something in the trunk.
Because of this, the craft beer culture of each province developed more-or-less in isolation. It is only in the last couple of years that craft beer has gone global and larger breweries have been able to afford expanding beyond their home province.
Ontario sports the oldest independently-owned brewery in Canada, Wellington Brewery of Guelph founded in 1985, a perfect example of how Ontario is strongly influence by the English brewing tradition. In Quebec, the brewing culture is more influence by mainland Europe, mainly Belgium. Unibroue and Dieu du Ciel, sought after around the world, specialize in Belgian beer styles.
McAuslan, the first craft brewery in Montreal, didn’t open until 1989 but had one major advantage over those in Ontario: brewers in Quebec are free to sell their products to any grocer or corner store that will buy them.
The Beer Cartel
Imagine what the Ontario craft beer industry would be if they could sell beer in stores. As it stands all we have is the Beer Store, Ontario’s only private beer retailer. Ontario’s craft breweries could sell in the Beer Store and some do, but it costs them a listing fee of $23,870 per brand per package size.
This fee is designed to stunt the growth of the craft beer market, and it has succeeded. The Beer Store is owned by three of the world’s largest brewers: AB-InBev (Budweiser), based in Belgium, and American-owned Molson-Coors each hold a 49% share, with the remaining 2% owned by Sapporo of Japan.
This means that the owners of the Beer Store are in direct competition against local, independently-owned breweries. They don’t want them in their store. Some have argued that the Beer Store, which is responsible for 80% of beer sales in Ontario, constitutes a foreign-owned monopoly on Ontario’s beer market, and studies have shown that their market domination brings the price of beer up by as much as $10 per case compared to Quebec.
The Ontario Craft Brewers Association, which represents 30-odd breweries and counting, has appealed for the right to open their own retail store and has been denied. Why three foreign-owned multi-national breweries are allowed the exclusive right to privately sell beer in Ontario will never make sense to me.
In the Shadow of America
Quebec has the highest per-capita beer sales of any Canadian province. While Ontario’s population is 50% larger, Quebec has more than twice as many breweries. I don’t think I’ve ever been in any bar in Montreal that didn’t have at least one local beer on tap.
But to say that Ontario is lagging behind Quebec is to ignore that both of us are still standing in the shadow of the American beer scene, described by Michael Jackson (no not that Michael Jackson, the legendary beer writer Michael Jackson. He was on Conan once, look him up) as “the most exciting beer scene in the world.”
The flood of new breweries and the explosion of IPAs, high-gravity beers and “extreme” beers are trends born out of the American craft beer boom. But in Ontario and Quebec craft beer is still far from mainstream, and one of the reasons is that the LCBO and the SAQ are preventing brewers and drinkers from being a part of the global craft beer industry.
This all comes back to overregulation. I can drink Michigan-brewed Founders in Melbourne, Australia but not in Windsor. 80% of beer sales can be owned by three foreign “macro”-breweries, but craft beer brewed on the other side of the river can’t come across. When will regulators in Ontario stop seeing craft beer as a threat?
By: Derek Harrison