Ontario Brewer » Blog Archive » Getting it on with the LCBO, yo.

Getting it on with the LCBO, yo. October 29th, 2007

So, in Ontario there are only a few ways a brewery is (legally) allowed to sell beer. Here they are:

1) The Beer Store. This is a private, for-profit company, owned by Molson (which is owned by the U.S.’s Miller-Coors) and Labatts (which is owned by Inbev, from Belgium). Okay so Sleemans (owned by Sapporo in Japan) owns something like 1%, but let’s not split hairs. Something ridiculous like 85% of all beer sold in Ontario moves through this juggernaut.

2) The LCBO. This is a government-owned company that focuses on wines and spirits, but does sell beer as well. The LCBO does not sell larger packages than the 6-pack, so customers looking to purchase a case of beer go to the Beer Store.

3) Brewery retail store. Breweries are allowed to sell beer out of their brewery. They are not allowed to open up stores off-site, which is too bad, ‘cause that would be cool.

4) Restaurants and bars. Technically only restaurants can get new liquor licenses in Ontario, which is why you see fewer taverns every year.

So as you can see, options are really limited for a little brewery that wants to sell in the Ottawa-area exclusively. The Beer Store is very expensive to get into. In fact, it would cost us about $20,000 to get listed in 20 stores selling the usual 6-pack, 12-pack and 24-pack. Furthermore, if we don’t meet sales targets, the Beer Store takes back the listing and bans us from selling in that store.

On top of that, the Beer Store is converting more and more stores to a format where you can pick up a case of Molson Canadian or Blue Light real quick and get out the door; OR try to find what you want on a tiny list of beer, then wait in line forever while someone in the back hunts for your beer. I suppose it makes sense — if I was the one who owned the Beer Store, I’d probably try to make it tough for them (Miller-Coors) to sell their beer.

The LCBO is a much better option, but still quite challenging to work with on a small scale. Because they sell all the wine and spirits for the whole province, they have very long lead times and most of their programs expect the supplier to be able to reach the whole province. As an example, the deadline to submit a seasonal beer is 12 months in advance.

On the flip side though, the LCBO is interested in higher-end beer and I’ve had very good experiences working with the beer team and the inside folks there. For my first listing, and because I asked really nicely, they were able to fast-track Beau’s through the process, shaving 4 months off the submission timeline. (The process involved in getting a listing is rather interesting and I’ll write a separate blog about that some time). So finally, the good news is that it is looking likely that Beau’s will be able to sell through the LCBO starting in January. Although we’ll miss you all coming down the brewery to get your fix, it’ll be nice to know people in Ottawa can say, “Let’s go buy some Beau’s,” and not have to gas up and pack a lunch for the ride to VKH.

Posted by Steve Beauchesne, Beau's in Brewmasters

33 Responses to “Getting it on with the LCBO, yo.”

Mike Laba Says:
October 29th, 2007 at 10:31 pm

Steve,

Congrats on the LCBO listing…I’ll try to steal a 6-pack come January.

You going to be at the Ottawa Wine and Food Show this weekend?

If so, let’s grab a pint.

Congrats again.

Mike

Jim Murphy Says:
October 30th, 2007 at 10:27 am

I’ve recently moved back from the states after a 12 year stint and am completely incensed by what the Ontario Craft Brewers have to put up with. The sales channel restriction - really a retail arm of the monopolistic, foreign owned companies - is unconscionable.

My family lived for 8 years in New England where beer is sold just like any other food/bev item - in regular grocery stores. No problems, lots of choice and convenience. Simple.

Age was checked by cashiers just like they do for cigarettes. Its such a no-brainer to me.

Can you hook up with Loblaws or other big retailer to get some muscle behind you?

Let me know how I can help and I’m there. This makes no sense to me whatsoever!

Jim

Steve Beauchesne, Beau's Says:
October 31st, 2007 at 9:31 am

Thanks Mike, see you tonight!

Hey Jim,

Selling beer in Ontario certainly has a few challenges…I’d be a little worried about working with national grocers for fear they would be even more difficult than the LCBO currently is (the scale of a Canada-wide chain is somewhat daunting).

I think that if Molson, Sleeman and Labatt are allowed to run a distribution store, then why shouldn’t I be allowed to pair up with Cameron’s and Churchkey and do the same? Or Mill Street and King? Or Old Credit and Great Lakes? You get my point - it only seems fair if you are going to let the 3 biggest companies to own a distribution model, any 3 brewers should be able to do the same.

Jim Murphy Says:
October 31st, 2007 at 9:46 am

I agree - of course - you *should* be able to do exactly that.

Frankly the “solution” is obvious and having found this link from 2005:

http://www.fin.gov.on.ca/english/consultations/basr/report.html

It would appear that others agree. Its the actual doing that seems a blocker.

Jim

James Kennedy Says:
November 1st, 2007 at 3:07 pm

Come on guys, lets do this! I don’t make beer, but I do love beer. I just got back from a day trip to the state and paid duty on my alcohol purchases (which in effect doubled my spending). I was in Premier Gourmet (part of Premier Liquor) and bought a few of their 100+ craft beers. It was heaven. Why in Ontario can’t I shop at, for instance, an Ontario Craft Brewers store? All craft brands in one convenient location? There’s enough of you to make a difference, I’m sure of it. If I can help, I will.

Peter Says:
November 2nd, 2007 at 5:27 am

Why are we allowing a private liquor monopoly in Ontario? It’s not even Canadian owned anymore! It’s like if Walmart was the only retailer wjho was allowed to sell large packages of toilet paper, and everyone else could only sell them by the rool, or nothing at all.

Steve Beauchesne, Beau's Says:
November 2nd, 2007 at 8:14 am

Hi James,

That’s encouraging! I love to take people up on their offers for help…if you are willing to help, why not start by forwarding this blog post to other beer afficionados and lets see how many others post up similar words of encouragement. It would certainly be encouraging if we got a hundred posts saying that folks would shop at an OCB or craft brewery retail shop. A thousand would be even more encoraging…but lets just see how many people would actually take the time to post a comment of support on this blog entry.

David Jones Says:
November 2nd, 2007 at 10:58 am

Steve, this obviously the equivalent of turning around a battleship. Theoretically it sounds ideal to have your own distribution channel, but it’s more likely that the government would sooner go private than have another separate beer-selling option.

While grocery and private stores may seem like a good idea, I’d have to believe that the scale of the big brewers i.e. $$ would allow them to control listings in corner stores and grocery the same way they control tap handles at national restaurant chains.

James Kennedy Says:
November 2nd, 2007 at 11:28 am

David, the worst failure is quitting before even trying. The OCB make beer, people drink beer. People drink OCB beer because its better. They drink it even thought it doesn’t come with a t-shirt, or a chance to party in a mansion, or play in a golf tournament. Could perhaps, people who drink beer because its good rather than because it come with a prize be the kind of folk that would take up a cause like this - if made aware of it? I think they are.

Ken Says:
November 2nd, 2007 at 11:30 am

I’m all for an alternative method of distribution. I currently live in St. Catharines where only two LCBOs carry any of the seasonal releases and none of them really carry the premium imports. I have to drive to Oakville for that and it only frustrates me. Its easier to drive to Buffalo and buy 4X6 packs at Premier Gourmet and Consumer’s Beverage than it is to get quality beer locally. I can’t even get Mill Street’s Belgian Wit in the Niagara, I have to drive to either Stony Creek/Hamilton. Add to this problem that the LCBO and The Beer Store make it financially prohibitive for small brewers to distribute their product and it equals a serious dis-service to the consumer. I would be all for a Craft Beer Store or a privatization of beer distribution. There has to be something that we can do and I would be more than willing to step up to the plate in order to help turn things around.

Steve Plum Says:
November 2nd, 2007 at 12:00 pm

Hey Steve,
well its awsome that you have treked this far in your relitively new brewing endevours. only if this Ontario Government could make the sales of beer and spirits a public affair buisness would pick up that much more for sure.

I was just thinking, seeing that your so close to the Quebec border is it really that hard to expand from Ontario into Quebec (Montreal or surounding area) where alcohol sales are made public?

Keep up the good Beer buddy and stay strong…

Cal Stephenson Says:
November 2nd, 2007 at 12:58 pm

In my opinion, this is exactly the purpose of something like the OCB. Aside from the contests and the maps, and pamphlets, while all still good. A form of solidarity between fantasic breweries, with a larger voice to team up with each other to try and change legislation. Heck, even start with a change that allows you guys to maybe sell each others beers from your breweries? Since that is already an avenue in place and allowed. It would benefit everyone in the long run wouldn’t it?

Bruce Phillips Says:
November 2nd, 2007 at 5:21 pm

Hi Steve. You can add my name to your list of supporters. I find it frustrating that here in Ottawa, all I have to do is cross the river into Quebec and I can find great Quebec micros in a litle supermarket. Meanwhile, back in Ontario, well, … we all know the story here.

Congratulations on the new release.

Jim McFarlin Says:
November 2nd, 2007 at 6:30 pm

Hey Steve,
Like some of the others here, I’m able to travel frequently to New England and other states and always find it fascinating going to the private beer stores down there. A chain of OCB stores around Ontario would be nothing short of a dream come true for many of us who now travel many miles (oops, km’s) to acquire our precious purchases of Ontario craft beers. If you guys need names on lists, letters, or other support, count me in. VKH is a nice place to visit and the Beau’s is worth the trip. But it would be great to see the breweries such as yours selling each others’ selections. We all want to expand our beer horizons.
So many brews…so little time.

Clayton Eamer Says:
November 2nd, 2007 at 9:51 pm

Choice is good. More is better. I had no idea the beer monopoly was that bad. You guys should be able to sell your beers in an OCB store, separate from the brands allowed by the Beer store, much like wines are sold in stores other than the LCBO. Even though Vankleek Hill isn’t a big trip from Cornwall, I’d still prefer a 20 minute round drip to a 2 hour one.

Darren Says:
November 2nd, 2007 at 11:59 pm

I’d love to have a high-end craft beer(As if there’s low-end ) exclusive store. If there was an LCBO, Beer Store, and a Craft Brew Store I’d go to the Craft Brew Store for my beer and the LCBO for my liquor. I’d let the monopolistic Beer Store rot. I meet more and more people who are willing to try craft beer. The only ones I know who regularly drink major labels are cheap or people who drink just to get drunk. Bring on a third leg of beer sales.

Tim Beauchesne Says:
November 3rd, 2007 at 8:14 am

It’s great to see support for this idea of Craft Beer Stores. I also love the idea of selling other craft beers from our retail store at the brewery…this would be awesome!!……I believe Ontario beer drinkers are changing rapidly and Ontario is starting to recgonize that there’s a real choice out there of some very fine beers…p.s….Hey Jim , your right about those wonderful little stores in the U.S of A. ..

Benoit Bergevin Says:
November 3rd, 2007 at 9:18 am

It’s absolutely counterintuitive for the Ontario government to make it so difficult to distribute Ontario-made product in Ontario at the expense of Ontario small businesses and for the benefit of foreign-owned behemoths.

I’m all for OCB outlets.

What about Wine Rack stores? Are they independent and do they represent the small vineyards? Could the possibility of a partnership with WR help the OCB in achieving a better product distribution network? What kind of deal/license does WR have that OCB may also be able to obtain?

Evan Davis Says:
November 4th, 2007 at 4:15 pm

Without a DOUBT I would shop at an OCB or craft brewery retail shop - I’d move next door. It makes so much sense - you would be getting fantastic beer and supporting business within your own province - it’s a win win.

Chris Says:
November 5th, 2007 at 2:35 pm

I am a homebrewer myself. I have bought quite a few six packs of OCB. There is still quite a few I haven’t tried. Unavailable here in my local LCBO. I can get a bottle of Polish Lager easier than a lot of OCB’s. That is just wrong. It would be fantastic to shop in a OCB store. The Beer Store is an awful place to buy beer. The last time I was in the Beer Store, ( well over a year ) a guy had a case of mega-swill and he was kicking it along the floor while in line to pay. What a way to buy beer!!! Just shameful.

Chris

Joseph Says:
November 5th, 2007 at 5:30 pm

I fully agree with this article, and would be willing to put money and effort into changing our current laws that support the broken system we have.
-Joseph-

Cal Stephenson Says:
November 12th, 2007 at 7:14 am

I do have to say, the seeming lack of input and discussion by OCB members and other breweries on this topic leads me to think most are pretty happy with status quo. Thats unfortunate. Continue to shop in Buffalo I suppose.

Steve Beauchesne Says:
November 12th, 2007 at 11:17 am

I can tell you that as a group we do a lot of talking on this subject, but we have not come to agreement as a group on whether this is the best use of our effort.

If I can flip this around on you, I can tell you that if enough beer enthusiasts joined the facebook group and/or posted something supportive here, THAT might be what convinces the OCB to pursue a craft beer store in Ontario.

If it seems that beer enthusiasts are happy enough with the current system, the OCB may well decide to keep trying to work in the system, too.

James Kennedy Says:
November 12th, 2007 at 11:29 am

Here’s the link to the facebook group…JOIN!

http://www.facebook.com/group.php?gid=5557069508

Thanks,
JAMES

Cal Stephenson Says:
November 12th, 2007 at 1:05 pm

Thanks for the reply Steve, I can tell you that my comment was directed the furthest away from you of all people, afterall, this is your post on the subject. Will have to look into what a Facebook group is I suppose, and in the meantime continue purchasing my OCB brands directly from the breweries as much as I possibly can, unfortunately for me your beer is a hundred dollars or so in gas away.

Pootz Says:
November 13th, 2007 at 5:38 pm

Off site stores for brewers or supernarket retail of beer (which is done in 3 provinces) is long over due in Onterrible.
It is a sin that this province protects the interests of foreign mega brewers and handicaps local independent brewing industry.

Captive markets and distribution monopolies for the foreign mutinationals but no paralell private distribution/retail system for our domestic producers.

I agree with a previous poster that OCB should approach a large grocer chain and together petition for retail rights on beer.

Andrew Hughes Says:
November 19th, 2007 at 7:59 am

I have read everyones comments and whole-heartedly agree. It still amazes me that there can be a business called “The Beer Store” but yet the people who work there know nothing about beer. Other than to return empties, I wouldn’t have set foot in one for years. The LCBO is equally frustrating. First glance makes it look like they have a great selection, but a closer look shows that 80% of it is identically bland European lagers. What OCB they do carry often has improper signage (I’ve found OCB beers in the “import” section at more than one LCBO store) and is often not refridgerated, which means you have to know where to find brewed date. I prefer to purchase right from the brewery and have visited over 20 micro breweries in Ontario, but that often entails spending most of a Saturday driving hundreds of km’s just to find that despite the big “Open” sign on the road, the doors are locked and no one appears to be around (gone for lunch?), or they are out of the specific beer I just drove 200km to get. Lucky for me, a new brewery has just opened in my town which makes wonderfuly favourful beers, so it’s much easier to get good beer than it was a few months ago, but an OCB outlet, staffed by knowledgeable, friendly people (as opposed to the ignorant surly people at the beer store) would be a place I would frequent regularly.

Michael Beaudoin Says:
December 5th, 2007 at 10:12 am

Great idea!!! A few of us down here in Windsor were discussing this at the begining of summer. Beer enthusiasts need to make it an issue. We have the “Wine Rack” at various grocery stores, why can there not be OCB stores?

Pete Says:
January 14th, 2008 at 12:33 pm

I was wondering when your beer will be able to purchase at the LCBO i was there this past weekend and it wasn’t there yet. Do you have an idea?

Steve Beauchesne Says:
January 15th, 2008 at 7:59 am

Hey Pete,

We received something called a committment letter from the LCBO on Thursday. It is for limited distribution on a trial basis, so not every store will have them, but I hope that they will start showing up in a couple weeks.

Cheers,

Steve

Brent Lackie Says:
February 7th, 2008 at 4:00 pm

I see you are looking for a hundred or so posts here, so I’ll add mine. I want total private alcohol sales in MY Ontario. Any step in that direction I will support.

Richie Bones Says:
March 9th, 2008 at 11:08 am

So wow I just moved here and hate both the Beer Store and the LCBO what a crock of shit overcharging for everything…….and where are the craft brewed beers? nobody wants to buy a 6 pack of coors for $11.45 first offf horrible beer second that price is so far off its nuts….anyways very angry right now……i think we all need a good store that sells actual craft brews from local to world wide hard to find stuff….just simply a beer store and nothing else….i got all excited when i saw THE BEER STORE and i walk in and wow what a let down….anyways heres to the craft brewers cheers…..let me know if i can help out at all…..would love to be apart of this movement….

Lisa Says:
March 12th, 2008 at 12:21 pm

Wow… Richie… how do you really feel??! I love it! You should visit one our breweries … you’d love every living minute of it I’m sure!!! Check out our website to print a copy of the ‘Craft Beer Route’ (map of where to find all the Ontario Craft Brewers). Nothing like fresh, premium, locally made beer!!!