The Beer Store is raising the minimum amount an Ontario restaurant or bar must order without getting penalized, driving smaller eateries to change how they do business and leaving some wondering when the privately owned company’s monopoly will end.
Effective April 1, establishments must place Beer Store orders of no less than $1,500 or be subject to a $175 fee (plus tax).
That’s not so much an issue for bars that sell a lot of beer from mainstream companies Molson, Labatt or other big players. But it’s a big deal for smaller eateries that will need to rejig how and what they order, said Jim Davies, one of the owners of J Dee’s Market Grill in London, who is used to being able to order two kegs but will now have to order more than that to avoid the penalty.
“At this time of year, since we’re across from Bud Gardens, we don’t have trouble making minimum orders, but during our slower season we’ll have trouble meeting that threshold,” Davies said. “The $175, if we don’t meet the minimum order threshold, is an outrageous amount.
“I can see us running out of beer more often because we’ll be waiting for a big enough order,” he said. Otherwise, the beer will be gross, he added. “You don’t want inventory sitting around.”
Bars and restaurants must order from The Beer Store for mainstream brands. They can also order from craft breweries, which recently have been supplying beer that’s comparable in price, with no minimum order threshold or delivery fee.
“I would say in the last few years I have completely changed my lineup,” said Mark Dencev, owner of the downtown London mainstay The Richmond Tavern. “Five years ago, we would have been 90 per cent Labatt bar. Now it’s 35 per cent Labatt, 25 per cent Molson and the rest is all independent now.”
Customers, he said, are not as loyal to certain brands as they used to be and are looking for the cheapest pint they can get.
“From The Beer Store and LCBO, we’re seeing continual increases that are outpacing inflation and we’re losing our base cliental, that blue collar, on-the-way-home-from-work pint crowd.”
In a letter to restaurant and bar owners, The Beer Store said the minimum delivery fee increase is part of an “ongoing journey of customer service delivery.”
CBC News sent several email requests this week to The Beer Store for comment. The director of marketing Natasha McVie replied Wednesday morning saying there was no comment and that schedules “didn’t allow for a timely response.”
Premier Doug Ford has said he wants to end The Beer Store’s monopoly on sales when an agreement that allows some grocers to sell beer and wine comes to an end in 2025.
The increase in Beer Store pricing and ordering thresholds has allowed independent brewers to come in and offer beer at similar or cheaper prices, with better customer service, Dencev said.
London-based Anderson Craft Ales has two beers on tap at The Richmond, and will likely see more new bar and restaurant customers once the sticker shock of the minimum order thresholds sinks in, said founder Gavin Anderson.
“Us and other craft producers don’t have minimum orders. We don’t have a delivery fee. We can drop you off a keg or cases of beer, you call us and we’ll drive it over that week,” he said. “Every year since we’ve opened [in 2016], we’ve seen an increase in local restaurants stocking us. I think it’s our service and competitive pricing.”
The independent brewery has a wide range of products, including a Gold Lager that retails for cheaper than Molson Canadian or Labatt Blue. “We just try to make the best beer we can at a fair value.”
