Should the Beer Store's Monopoly be Challenged? - Diamond and Diamond Lawyers
  • Friday, 16 January 2015

Should the Beer Store's Monopoly be Challenged?

It appears that the Beer Store’s monopoly is slowly eroding, brought on by a local Toronto entrepreneur, and lawyer, who is looking to open up brew shops in Ontario. The brew shop, Barge Craft Beer, is a company looking to specialize in selling craft beers. These boutiques are commonplace across North America but banned in Ontario. This is not the first time the Beer Store’s monopoly status has been challenged. Pub owner David Hughes launched a class-action suit against the Beer Store on behalf of all beer drinkers in the province and Restaurants Canada, complained about the Beer Store to the Competition Bureau.

The entrepreneur, Michael Hassell, recently sent the Ontario government a 60-day notice that asks the court to strike down Subsection 3(e) of the Liquor Control Act, which protects the Beer Store’s monopoly status in selling beer directly to consumers without on premise brewing.  Mr. Hassell’s legal action seeks to strike down Subsection 3(e) of the Liquor Control Act, which gives the Beer Store its monopoly.

According to Mr. Hassell in an interview, “Craft brewers make the best stuff. It’s great. But getting it to market is the number one hurdle – they’ve got this legislative monopoly to deal with,” furthermore, “It really cuts everybody else out of the market.”

The Beer Store launched a counter attack and opened up ownership to all Ontario-based brewers (similar to a Co-op, how the Beer Store was originally designed to operate).  However, many craft brewers dismissed this jester as the Beer Store would still be owned by the big three multinational owners.

In recent months, there has been a lot of controversy surrounding the Beer Store.  Ed Clark, banker and adviser to Ontario Premier Kathleen Wynne, called for the Beer Store owners to pay a franchising fee to the province in exchange for their monopoly. Mr. Clark also requested that the LCBO begin to sell the 12 packs of beer, however, it was discovered that the LCBO and the Beer Store had a secret deal that prohibited the LCBO from selling these more lucrative packs.

“I am going to proceed with redesigning and reassessing the Beer Store,” provincial Finance Minister Charles Sousa said on his way into a cabinet meeting at Queen’s Park Wednesday. “We’re going to maximize the benefits to consumers and protect the industry at the same time.”

With politics at play, it’s difficult to determine what the Ontario liquor market will look like over the years to come, what we do know is that the public will continue to exert pressure on the liquor monopoly in Ontario. 

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