Myths and Facts about modernizing beer sales in Ontario
What The Beer Store doesn’t want you to know!
February 10, 2014 – Toronto – More and more Ontarians are asking for increased competition and convenience in alcohol retailing, as evidenced by a recent Angus Reid survey that indicated almost seven-in-ten Ontarians (69%) want to see more private sector retailers selling beer to compete with The Beer Store.
It is interesting to note that Ontario is the only jurisdiction in North America, where private brewers are allowed to operate what is essentially a retail monopoly. While there are retail monopolies in some provinces and states, they are owned by the government.
As The Beer Store continues to argue against modernization, the Ontario Convenience Stores Association (OCSA) (www.freeourbeer.ca) and its chain convenience store members think it’s not only time that Ontario’s 1927-era alcohol retailing system was modernized, but Ontario voters should have the facts on what that could mean.
Myth 1: Convenience stores are not ready to sell alcohol
Fact: Already in Ontario, about 200 convenience stores sell alcohol through the LCBO’s Agency Store and The Beer Store’s authorized retail programs. It has been this way for years and convenience stores do it well. Ontario’s chain convenience stores have decades of experience selling alcohol elsewhere in Canada and elsewhere.
Myth 2: Ontarians think the main benefit of convenience store beer sales would be lower prices
Fact: Competition to The Beer Store is not about prices – markets will determine those – and the Province sets minimum prices. It’s about what consumers want – more convenience and choice. When asked by Angus Reid, 50% of Ontarians said convenience was the biggest benefit from convenience stores selling alcohol. Only 15% said price was a factor.
Myth 3: Allowing competitors to The Beer Store will put 7,000 jobs at risk
Fact: The Beer Store is owned by three of the world’s largest brewers Molson Coors ($443 million profit in FY 2012), Anheuser Busch Inbev ($7.243 billion profit in FYI 2012), and Sapporo of Japan. Is The Beer Store really going to go out of business if they have to compete in Ontario?
Mac’s Convenience Stores has already said it plans to spend $54 million to build 27 new stores and create more than 1,770 new jobs if the go-ahead was given to sell beer and wine. That’s one chain alone.
Myth 4: Adding competition to The Beer Store and LCBO will cost the province money
Fact: The Ontario government earns $1.7 billion in non-tax revenue from the LCBO, but nothing from The Beer Store. Were the LCBO to act as wholesaler and open up retailing to more stores, the province could grow the revenue it receives from the LCBO without having to spend any taxpayer money on building stores.
Myth 5: Convenience stores will allow alcohol sales to minors
Fact: Convenience stores do a better job than both the government-run LCBO and the foreign-owned Beer Store at keeping age-restricted products from minors. When independently tested with underage secret shoppers (age 15-18), chain convenience stores scored the highest with an 87.3% pass rate, The Beer Store next with 80.7% and LCBO last with 74.6%.
Myth 6: Alcohol sales in more private stores will lead to increased crime
Fact: In Washington State, where voters privatized liquor sales in 2011, state police report the opposite – crime continues to fall since retailing was expanded[i]. Rates of impaired driving and minors with alcohol have fallen significantly.
Myth 7: The Beer Store is government-run, like the LCBO
Fact: The Beer Store is a privately owned cartel owned and controlled by three of the world’s biggest foreign brewers: Anheuser-Busch Inbev (Belgium), Molson Coors (United States), and Sapporo (Japan). The LCBO is a crown corporation and contributes $1.7 billion as a social transfer to the provincial government. Profits earned through The Beer Store monopoly do not go to the government and are retained its foreign owners.
Myth 8: Convenience stores will sell alcohol to intoxicated people
Fact: Convenience store employees do this job responsibly in the over 200 stores in Ontario that already sell alcohol (i.e., LCBO Agency Stores). Convenience store staff are already thoroughly trained through the Responsible Retail Training program and the OCSA proposes that every store employee selling alcohol would receive certification from the Smart Serve Ontario server training program.
Myth 9: Sale of beer and wine in convenience stores will increase impaired driving and alcohol consumption
Fact: Studies in the medical journals Addiction and the British Journal of Addiction have shown that increasing retail locations has no correlation with traffic accidents[ii] or lasting increases in consumption of alcohol[iii]. Despite fewer restrictions on alcohol sales in recent years (longer drinking hours, relaxed rules, etc.), impaired driving rates in Ontario have continued to fall. Statistics Canada data show the rate has fallen 30%[iv] since 2001.
Myth 10: There’s no one to handle beer distribution to stores and restaurants if The Beer Store doesn’t do it
Fact: Ontario has a number of large logistics, distribution and warehousing companies already delivering to the network of convenience stores in Ontario. Adding on one more product category to the existing system will be easy and could happen almost immediately.
[ii] Trolldal, B. (2005), An investigation of the effect of privatization of retail sales of alcohol on consumption and traffic accidents in Alberta, Canada. Addiction, 100: 662–671. doi: 10.1111/j.1360-0443.2005.01049.x
[iii] FITZGERALD, J. L. and MULFORD, H. A. (1992), Consequences of increasing alcohol availability: the Iowa experience revisited. British Journal of Addiction, 87: 267–274. doi: 10.1111/j.1360-0443.1992.tb02701.x