Beer Store Opens Ownership to All Brewers

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Ontario is approving the sale of beer in grocery stores
Ontario is approving the sale of beer in grocery stores

BeerTHUNDER BAY -BUSINESS – It is a major shift in policy at the Ontario Beer Stores.

The Beer Store has announced that, effective immediately, ownership is being opened up to all Ontario-based brewers large and small.

In a major announcement today, the Beer Store’s current owners said opening ownership makes sense for Ontariobrewers and consumers. It helps the retail network continue to offer a low-cost advantage and continues to enable brewers to independently set the lowest average beer prices in Canada, while also supporting award-winning environmental stewardship and a world-class responsible sale program.

“Today marks a new era for the Beer Store. We heard from Ontario brewers that they wanted to participate in the management of the Beer Store and contribute to its future success. That’s why we’re opening up the system and making it even more transparent,” said Stewart Glendinning, CEO of Molson Coors Canada.

“The Beer Store is truly becoming Ontario-owned. Ontario brewers will be represented on the Board and share in decision-making. All owners will have the same or better costs to sell in the Beer Store than the current owners,” said Labatt Breweries Canada President Jan Craps.

John Sleeman, Chairman and Founder of Sleeman Breweries said, “We welcome and support the direction of the changes being announced today.  These will help improve the transparency and openness of The Beer Store for all Ontario brewers, including Sleeman, and will allow our input into the evolution of the system.”

Also announced were new benefits to further improve access for small Ontario-based brewers.

Small Ontario brewers (who sell fewer than 1 million litres/year at the Beer Store) will pay no listing fee when stocking two of their products at the five Beer Store locations closest to their brewery, increasing the selection of locally-brewed beer for consumers in communities across the province.

Beyond those five stores, small brewers will be able to list the same two products at any additional Beer Store location at reduced listing fees, paying only the per-store fee. This will encourage additional small brewer listings at the Beer Store, enhancing the ability of those brewers to grow their businesses, while also offering wider selection to Ontarioconsumers.

Small brewers have also asked for the ability to introduce seasonal brands throughout the year. Today, the Beer Store announced that it will implement this change.  Brewers can swap out a new or existing brand listing and replace it with a seasonal brand twice a year at no additional cost.

“We listened and we acted. The Beer Store is a great beer retail system.  Today we’re taking new steps to make it even better”, said Beer Store president Ted Moroz. “As a result of these changes all Ontario brewers will be able to participate in the management of the company and the smallest Ontario brewers will get improved opportunities to grow their sales volumes at a significantly reduced cost.”

Moroz said that at the same time as considerable media debate about the Beer Store had been taking place in recent months, Beer Store officials had been quietly working behind the scenes on how to reshape the shareholder agreement and make the Beer Store even more open and transparent.

Under the new ownership structure larger Beer Store owners (annual Beer Store sales over 5 million litres/year) will pay the exact same fees as the current owners to sell their beer in the Beer Store.  Smaller brewers (Beer Store sales under 5 million litres/year) will pay discounted fees as they will not be required to fund certain costs relating to capital investment in new stores or pension and benefits plans.

As always, any brewer can sell in the Beer Store and brewers will continue to independently set their own prices in a highly competitive environment that keeps prices low for Ontario consumers. These facts will not change.

New owners are being welcomed into the Beer Store at a nominal cost: Ontario-based brewers with Beer Store sales under 5 million litres/year a year will pay $100 and receive a Preferred Share in the company; those with sales over 5 million litres/year will pay $1,000 and also receive a Preferred Share.